It is a new dawn for Australia’s rapidly evolving automotive market. As a result, plug-in hybrid electric vehicles (PHEVs) are experiencing dramatic growth in popularity among consumers. PHEVs are powered by an internal combustion engine in addition to an electric motor and a large rechargeable battery pack. These features combined have made them an attractive proposition to many Australian consumers. In the past two years, PHEVs have surged from comprising about 10% to nearly 25% of total electric vehicle sales, raising concerns among environmental advocates regarding the country’s emission reduction targets.
Today, nearly 8.9% of sales in the popular ute market are PHEVs. This trend further exposes the reality that Australian buyers are overall gravitating more toward bigger vehicles such as SUVs and utes (pickups). More than 12,000 plug-in hybrid electric vehicles (PHEVs) are now cruising Australian roads. As a result, they’re now the country’s fourth best-selling type of vehicle. This trend has sparked a debate about whether PHEVs can play a constructive role in Australia’s transition towards electrification or if they simply undermine the nation’s environmental goals.
Market Trends and Consumer Preferences
Of course, the popularity of PHEVs is a symptom of a much larger trend in the automotive market. Aman Gaur, head of legal policy and advocacy at the Electric Vehicle Council, notes that many Australians are gravitating towards larger, more powerful vehicles. He states, “What we need is incentives to help people get into PHEV vehicles. We don’t have any at the moment.” This included a clear indication of a growing concern. Without the right incentives, prospective purchasers will still be reluctant to make the leap to cleaner, greener alternatives.
In December of last year, Michael Formosa did something really radical. He replaced four diesel Ford Ranger utes with four PHEV utes. He remarked on this transition, saying, “Without the [plug-in hybrid], I’d still be driving a petrol or diesel ute.” Formosa’s experience should give everyone confidence in PHEVs’ promise to lead us to a future with cleaner driving choices. This is particularly critical to consumers who would otherwise remain loyal to legacy combustion engines.
Rohan Martin as CEO of National Automotive Leasing and Salary Packaging Association (NALSPA) He further underscores that PHEVs are just a strongly effective transitional tool in the automotive industry. He asserts that “they’re a real stepping stone for people to ultimately move into a battery electric vehicle, but are not yet prepared to take that step.” This consumer sentiment highlights the unique opportunity PHEVs have to serve as the bridge between traditional vehicles and EVs.
Environmental Concerns and Criticism
PHEVs—despite their popularity—are under fire as a vehicle type for being a poor solution for reducing emissions. Chris Jones, president of the Australian Electric Vehicle Association (AEVA), expresses concern that these vehicles may hinder Australia’s emission reduction goals. He states, “They’re not going to decarbonise transport like we need them to,” highlighting a shared apprehension among environmental advocates about the impact of PHEVs on the country’s long-term sustainability objectives.
A new study from Europe shows that most PHEV drivers do not recharge their vehicles regularly. This massive inconsistency begs the question of how effective they are in actually getting us off of our fossil fuel addiction. Jones further criticizes the trend, saying, “We’ve become hooked on these large and somewhat unnecessary vehicles.” His comments highlight the dangers of jumping into PHEV adoption without directly tackling consumer behavior and preferences.
Here, Mike Costello, an analyst for automotive research firm Manheim Australia gives further perspective on the market forces at play around PHEVs. He points out that they’re “playing for the center,” not just trying to reach early adopters. He mentions that “some people may wish we drive smaller cars, like in Denmark, but we can’t change that demand for larger cars,” reflecting the complex relationship between consumer choices and environmental policy in Australia.
The Road Ahead for PHEVs
Industry experts recognise the immense opportunity which exists for PHEVs to play a constructive role in Australia’s automotive future. Their vision sees these vehicles playing a critical role in the coming years. Stephen Collins weighs in on this topic, suggesting that “there’s a place for plug-in hybrids in Australia over the next three to five years.” He cautions that “if we’re looking at 10-years plus, maybe it’s a different story,” indicating that the long-term viability of PHEVs may depend on advancements in battery technology and charging infrastructure.
Unfortunately, the federal government narrowly repealed an essential tax exemption for PHEVs, thereby drastically increasing their cost even through novated leases. This change could impact sales and consumer interest in PHEVs as buyers evaluate their options in a shifting economic landscape.
Sales of PHEVs are climbing rapidly around the world, following suit after Europe, and now the United States. Policymakers and industry leaders should be looking for ways to accommodate this expanding travel segment while moving toward important environmental objectives. Eight PHEV utes have already been sold in Australia this year, indicating a strong market appetite.
