It’s the “transition technology” that isn’t going away.<\/p>\n
For years, sales of plug-in hybrid electric vehicles (PHEVs), which can burn fuel or run off a battery, have been tipped to fall as full-battery electric vehicles (BEVs) take their place.<\/p>\n
But in Australia, another story is unfolding.<\/p>\n
PHEV sales are booming.\u00a0<\/p>\n
One year ago, not a single PHEV ute had been sold anywhere in Australia.<\/p>\n
Today, there are more than 12,000 on our roads, and a PHEV is the fourth best-selling ute in the country.<\/p>\n
To some, PHEVs are a necessary “stepping stone” in the process of vehicle electrification, helping Australians get used to battery-powered cars.<\/p>\n
But others argue PHEVs simply prolong our costly love affair with unnecessarily large cars.<\/p>\n
These hybrids, they say, are effectively gas guzzlers dressed up as EVs, or “wolves in sheep’s clothing”.<\/p>\n
So why are Australians reluctant to drop the fuel tank entirely, and what does it mean for reducing emissions?\u00a0<\/p>\n
Hybrid EVs versus full-battery EVs\u00a0<\/p>\n
The phrase electric vehicle (EV) may conjure images of 100 per cent battery-powered cars, but many EVs regularly burn fossil fuels.<\/p>\n
And these cars make up an increasing proportion of the EV market.<\/p>\n
<\/p>\n
In the space of just two years, PHEVs have become a common sight on our roads, with more than 60,000 sold. (Getty: petovarga)<\/p>\n
Plug-in hybrids or PHEVs combine an internal combustion engine (like petrol or diesel) with an electric motor and a battery pack that can be charged from an external power source.<\/p>\n
They generally emit less CO2 than equivalent-model full-combustion vehicles, but significantly more than BEVs, when used over an extended period of time.<\/p>\n
This is because PHEV batteries are relatively small and, when they’re empty, drivers tend to run the car on fossil fuels before recharging.<\/p>\n
Plug-in hybrids now about a quarter of EVs sold<\/p>\n
In two years, PHEVs have gone from about a tenth of total EV sales to about a quarter.<\/p>\n
The rise of PHEVs is making the story of the electrification of transport in Australia more complicated.<\/p>\n
You may have heard that EVs are accounting for a larger proportion of new car sales.<\/p>\n
While this is true, a lot of the recent increase is due to PHEVs.<\/p>\n
BEV sales, as a proportion of new car sales, have actually plateaued at less than 9 per cent over the past two years.<\/p>\n
But PHEVs recently shot from 1 per cent to 5 per cent of sales in less than a year.<\/p>\n
What’s causing this deceleration is contested.<\/p>\n
Globally, the pace of growth of EV sales outside of China has slowed, with EV market share in the US and Europe stagnating.<\/p>\n
One theory is the BEV industry faces a challenge reaching customers beyond the “early adopters”, partly due to concerns about charging infrastructure.<\/p>\n
Another theory is the arrival of PHEVs has effectively siphoned sales from BEVs.<\/p>\n
In Europe and the US, like in Australia, PHEV sales are booming.<\/p>\n
Are plug-in hybrids helping or hindering fully electric car sales?<\/p>\n
The popularity of PHEVs has defied predictions.<\/p>\n
“Amongst the EV community we’re a little surprised,” Ben Elliston, chair of the ACT branch of the Australian Electric Vehicle Association (AEVA), says.<\/p>\n
“PHEVs came out of nowhere in the last few years.\u00a0<\/p>\n
“It seemed clear to us that BEVs are the better technology but the mainstream buyer seems to have different ideas.”<\/p>\n
Chris Jones, president of the AEVA, says PHEVs are undermining Australia’s emission reduction goals.<\/p>\n
“PHEVs were a transition technology … but now I think they’re a handbrake on BEV sales.”<\/p>\n
But others in the automotive industry have a very different take.<\/p>\n
They say PHEVs are cracking a consumer segment that isn’t yet ready to go all-electric.<\/p>\n
“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,” Rohan Martin, CEO of the National Automotive Leasing and Salary Packaging Association (NALSPA), says.<\/p>\n
<\/p>\n
Larger cars like utes and SUVs make up most of PHEV sales. (Getty: petovarga)<\/p>\n
Aman Gaur, head of legal policy and advocacy at the Electric Vehicle Council, said many Australians wanted to buy big, powerful cars like SUV and utes.<\/p>\n
PHEVs are meeting demand currently unserved by BEVs, he says, noting that some vehicle electrification is better than none.<\/p>\n
“We don\u2019t live in the kind of country where we tell people what car to buy,” he says.<\/p>\n
“Some people may wish we drive smaller cars, like in Denmark, but we can’t change that demand for larger cars.”<\/p>\n
Mike Costello, an analyst for automotive research firm Manheim Australia, says “PHEVs are competing for the middle ground”, not just “the so-called early adopters”.<\/p>\n
“The BYD Shark ute for, example isn’t just preaching to the converted, it\u2019s pulling people out of [full combustion] four-wheel drives.<\/p>\n
“There’s little doubt some people would have traded in [Toyota] Hiluxes and [Ford] Rangers [for Sharks].”\u00a0<\/p>\n
More stories about EVs:Who’s buying PHEVs?<\/p>\n
Michael Formosa, whose company services and repairs garage doors and gates in Sydney, traded in four Ford Ranger diesel utes for four PHEV utes in December last year.<\/p>\n
Other than a few issues with battery range when towing, he’s happy with the decision, which has meant less spending on fuel.<\/p>\n
“I worked out we’re doing about an eighth [of our travelling] in petrol and the rest in [battery power],” he says.<\/p>\n
“Without the [plug-in hybrid], I’d still be driving a petrol or diesel ute.”<\/p>\n
Utes account for about 20 per cent of all vehicles sold in Australia, making them a big chunk of the market.<\/p>\n
The only BEV or fully-electric ute available in Australia, the LDV eT60, has had well-documented performance problems, and is a third more expensive than popular PHEV models. Eight have been sold in Australia so far this year.<\/p>\n
“There isn’t yet a fit-for-purpose BEV for light commercial vehicles,” Mace Hartley, executive director of Australasian Fleet Management Association, says.<\/p>\n
PHEVs, meanwhile, now account for more than 7 per cent of sales in the ute market.<\/p>\n
This suggests tradies like Michael are buying PHEVs instead of petrol or diesel utes, and not instead of BEVs.<\/p>\n
But utes aren’t the only kind of PHEV selling well.<\/p>\n
About half of PHEVs sold in 2025 were small or medium-size SUVs, a vehicle class that, unlike utes, includes lots of popular BEVs.<\/p>\n
Here, it’s harder to argue PHEVs are serving a demand unmet by BEVs.<\/p>\n
A 2024 NALSPA survey found that, compared to BEV owners, a relatively high proportion of PHEV drivers lived in outer suburbs or were based in regional areas.\u00a0<\/p>\n
Many weren’t yet ready for a BEV due to range anxiety, but would consider one as their next car.<\/p>\n
“If you’re charging a PHEV at home each night, you can run it as a pure electric vehicle and not have range concerns,” NALSPA’s Rohan Martin says.<\/p>\n
But the AEVA’s Chris Jones says Australians are simply buying what dealerships are stocking and promoting.<\/p>\n
“We’ve become hooked on these large and somewhat unnecessary vehicles,” he says.<\/p>\n
“Dealers will claim that’s what people want, but when you walk into a dealership you see a wall of PHEVs … and the BEVs are harder to find.”<\/p>\n
Are PHEVs good or bad news for emissions?<\/p>\n
When burning fuel rather than running on battery power, PHEVs (which carry heavy batteries) actually emit more than their full-combustion equivalents.<\/p>\n
They’re only low-emission options if drivers plug them in to recharge.<\/p>\n
This means if they’re not being recharged, more PHEVs could amount to more higher-polluting cars on our roads.<\/p>\n
A recent study<\/a> from Europe, using onboard fuel-consumption data, found many PHEV drivers often don’t recharge.<\/p>\n As a result, PHEVs may not be as clean as their rated emissions suggest (these ratings are based on the assumption drivers charge more often).<\/p>\n Many plug-in-hybrids have a battery-range of more than 50km, which is a greater distance than the average Australian drives each day. (Supplied: Ford)<\/p>\n Based on the study’s results, PHEVs may only be about half as polluting as their full-combustion equivalents.<\/p>\n That’s good, but only as good as a standard hybrid (a vehicle with an onboard battery that can’t be plugged in to charge).<\/p>\n “They’re not going to decarbonise transport like we need them to,” Mr Jones says.<\/p>\n Modelling of the EV uptake required to meet Australia’s Paris Agreement emissions reduction commitment assumes PHEVs will account for 4\u20135 per cent of new car sales by 2030<\/a>.<\/p>\n That’s roughly where PHEV sales are now, but the long-term trend appears to be upwards.<\/p>\n Are plug-in hybrids the future or a temporary convenience?<\/p>\n Earlier this year, the federal government lifted a key tax exemption for PHEVs, effectively making them more expensive to own through a novated lease.<\/p>\n “The prevailing sense within the industry was the lifting of the [tax] exemption would stall PHEV sales, but this hasn\u2019t happened,” Manheim Australia’s Mike Costello says.<\/p>\n “They\u2019ve slowed but not stalled.\u201d<\/p>\n Rather than shifting away from plug-ins, automotive brands are launching more PHEV models in the Australian market.<\/p>\n The Toyota RAV4, a top-selling medium SUV, will come with a PHEV option from 2026.<\/p>\n BYD, meanwhile, will launch a mix of four to five new PHEV and BEV models in Australia over the next six months, the company’s chief operating officer Stephen Collins says.<\/p>\n<\/p>\n