Plug-in hybrids speed up, EVs slow down in record month

But not all vehicle types benefited from the spending spree, with figures released by the Federal Chamber of Automotive Industries on Tuesday showing SUVs continued to dominate the market while passenger car sales slowed. 

Plug-in hybrid electric vehicles also picked up the pace in Australia, while consumers pumped the brakes on electric cars, particularly those from US brand Tesla. 

Australians bought 110,316 new vehicles in July, according to the chamber and Electric Vehicle Council, beating the previous record by more than 8000 cars.

The sales record is a significant U-turn from sluggish sales earlier in 2025, and chamber chief executive Tony Weber credited better financial conditions for the renewed spending. 

"We are now seeing confidence return to the market, supported by a recent interest-rate reduction and anticipation of further easing," he said.

"Consumers are responding with interest across most segments, particularly utes and SUVs."

Sports utility vehicles continued to grow in popularity during the month, with sales rising by six per cent to represent 61 per cent of new vehicle sales recorded by the chamber.

In contrast, passenger vehicles continued to fall out of favour, down by 19 per cent and making up 13 per cent of new vehicle sales.

Motorists also embraced hybrid vehicles, sending sales of plug-in hybrid models soaring by 81 per cent compared to 2024.

Plug-in hybrid vehicle sales have almost tripled during the year in a trend Mr Weber said was led by motorists outside major cities.

"With more than 50 models available in 2025, plug-in hybrids have emerged as an important transition technology for many Australians, particularly those in regional areas or those with limited access to charging," he said. 

"They offer the ability to drive short distances on electric power while retaining the flexibility and range of a conventional engine."

After a brief recovery during June, electric vehicles dipped in popularity during July, with battery-powered cars representing 6.5 per cent of all new vehicle sales. 

Another significant drop in Tesla sales fuelled the trend, with the US car maker selling fewer than 1000 vehicles during the month, down 64 per cent on July 2024. 

Sales of the company's Model 3 recorded the starkest fall, dropping 70 per cent compared to last July, and dragging the brand to a sales decrease of 41 per cent this year.

Chinese electric car brand BYD continued to record the greatest number of electric car sales after overtaking Tesla in July, with sales of more than 4600 vehicles. 

Toyota's HiLux ute claimed the title of top-selling vehicle for July, followed by its RAV4 SUV and Ford's Ranger ute.

Australian Associated Press