A convergence of rising global fuel prices, geopolitical instability, and increasing vehicle availability is driving a significant acceleration in electric vehicle (EV) sales worldwide, with Australia reporting record adoption rates. The International Energy Agency (IEA) projects that electric vehicles will account for 30% of all new car sales globally in 2026.
Global Market Trends
According to the IEA, EVs represented a quarter of global new car sales in 2025, setting records in nearly 100 countries. The agency projects the global EV fleet will grow more than sixfold by 2035, reaching up to 510 million vehicles, based on current trends and without new policy announcements.
Global sales of conventional internal combustion engine vehicles peaked in 2017.
Regional performance data for the first quarter of 2026 shows:
- Europe: EV sales increased nearly 30% year-on-year.
- Asia Pacific (excluding China): EV sales rose by 80%.
- Latin America: EV sales increased by 75%.
- United States: EV sales declined year-on-year.
Australia: Market Acceleration and Records
Australia's EV uptake reached 15% of new car sales in 2025, surpassing the United States and Canada. Data from the Federal Chamber of Automotive Industries showed EVs accounted for 11.8% of total Australian sales in February 2026.
The Electric Vehicle Council of Australia reported record EV sales of nearly 25,000 vehicles in March 2025, representing a 69.6% increase compared to March 2024. In March 2026, EVs accounted for 22.9% of all vehicle sales, a 69.6% increase year-on-year. Battery electric vehicles saw a 23% increase in sales from February to March 2026, despite an overall 3.3% drop in new car sales.
Drivers of Growth
Fuel Prices
Global crude oil prices have risen above $US100 per barrel following the outbreak of the US-Iran conflict in February 2026 and the blockade of the Strait of Hormuz. Some analysts project prices could exceed $US150 per barrel. In Australia, petrol prices have exceeded $2.10 per litre, with economists projecting Unleaded 91 could rise by approximately 40 cents per litre. A 30 percent increase in crude oil prices would add approximately $30 to the cost of refuelling a standard 50-litre petrol tank in Sydney.
Economic Factors
Modelling comparing a medium-size petrol SUV and its EV equivalent in Australia indicates that EV owners could begin saving money on fuel after approximately five years of driving 15,000 km annually. A 20 percent increase in crude oil prices would reduce this period by one year; a further increase to $2.90/L would reduce it by another year. Each 40-cent rise in petrol cost adds approximately $4,000 to the running costs of a typical petrol car over a decade.
Vehicle Availability
Chinese-made EVs accounted for 75% of global EV production in 2025. China recently surpassed Japan as Australia's largest source of new cars in a single month. More than 10 new Chinese car brands have entered the Australian market since 2020.
In the 12 months to February 2026, four Chinese brands (BYD, GWM, Chery, MG) ranked among Australia's top 10 sellers.
BYD and Great Wall Motor Australia reported significant increases in electric and hybrid vehicle sales since the fuel crisis began.
Battery Technology
China's battery manufacturing scale, supported by government investment, has created a 30% cost advantage over the US as of 2025. Chinese battery cell production represents 80% of the global total. Battery patents account for nearly half of all energy-related patents, with China dominating filings.
Consumer Behavior and Market Dynamics
Google searches for "EV" in Australia nearly tripled from January to March 2026. Online marketplace Carsales.com reported a similar increase in searches. EV test drive numbers at Polestar Australia tripled, and first-quarter 2026 sales nearly doubled year-over-year.
The used EV market is also expanding. Pickles Auctions reported a 111% jump in EV searches on their website in March 2026 compared to February, with auction clearance rates reaching 100%. Nearly half of used EV purchasers are now under 40, compared to a previous majority in the 41-60 age bracket. Auction data indicates EV batteries average a score of 96%, with cars over 120,000 kilometers maintaining 88% or better.
Research from Nordic countries (Denmark, Finland, Norway, Sweden) found that a 1% increase in petrol prices was associated with a 0.85% increase in EV sales from early 2019 to late 2022. Analysis of Chinese vehicle sales data (2017-2022) revealed that an average 1 Chinese Yuan per litre ($0.21/L) increase in petrol price correlated with a 4.67% rise in EV sales. Studies indicate that rising fuel prices led cost-sensitive buyers to favor smaller EVs in Nordic countries and fully battery-electric vehicles in China.
Charging Infrastructure
Approximately 80% of EV charging in Australia occurs at home. The federal government's National Electric Vehicle Strategy aims to establish a national highway network with fast chargers spaced an average of 150 km apart by the end of 2026.
However, long queues at EV charging stations in southern New South Wales during the Easter 2026 school holidays highlighted infrastructure gaps. An incident near Coolac on the Hume Highway showed over 20 vehicles waiting for 12 chargers. Government mapping indicates most charging stations are concentrated in eastern NSW, with availability sparse west of Dubbo and Tamworth.
The NRMA EV charging network reported a 19% increase in charger usage in the last week of March 2026. The Electric Vehicle Council advocates for a unified national charging plan to accommodate rising demand. The Department of Climate Change, Energy, the Environment and Water confirmed co-funding of over 2,000 operational chargers. The NSW government's 2021 EV Public Charging Master Plan targets EVs comprising 50% of new car sales by 2030, supported by a $209 million investment.
Major EV brands offer models with claimed range over 700 km. Industry observers note that newer models have longer real-world ranges exceeding 500 km and that ultra-rapid DC chargers are becoming more common.
Grid and Regulatory Considerations
University of Melbourne economists note that evening EV charging peaks can stress the electricity grid, potentially increasing total electricity use by 30% and relying on coal and gas energy sources. The Australian Energy Market Operator has introduced a free daytime power tariff for eligible customers in Queensland, NSW, and South Australia, allowing free charging for three hours during midday when solar power is abundant.
Observers note that apartment dwellers and renters may face barriers to home charging. Some analysts suggest that increased driving facilitated by lower EV running costs could worsen road congestion, necessitating discussion on road maintenance taxation.
Heavy Vehicle Sector
Modelling for a semi-trailer driving 90,000 km per year indicates that an EV semi-trailer becomes more cost-effective than a diesel equivalent if diesel prices reach $2.11/L. If diesel were to reach $2.41/L, the electric truck would be $13,000 cheaper to run annually.
Statements from Officials and Industry
Antonio Guterres (UN Secretary-General): Stated that dependence on fossil fuels leads to "volatility" and that homegrown renewable energy offers an "exit ramp."
Chris Bowen (Australian Climate Minister): Stated that solar and wind energy sources are not subject to interruptions from geopolitical events.
Anthony Albanese (Australian Prime Minister): Issued a warning to new market entrants regarding meeting service standards and avoiding unfair practices.
Alessandro Blasi (IEA): Described the development in global car markets as "truly staggering."
Julie Delvecchio (Electric Vehicle Council, Australia): Noted that the Easter demand surge served as an indicator of future infrastructure needs.
Aman Gaur (EV Council, Australia): Stated that surging petrol prices and geopolitical uncertainty are driving consumers toward EVs.
Scott Maynard (Polestar Australia): Stated that test drive numbers have tripled and first-quarter 2026 sales nearly doubled year-over-year.
Paul Maric (CarExpert): Suggested that current fuel price increases might not be sufficient to persuade most drivers to switch but could be a deciding factor for those already considering an EV. He noted many vulnerable Australians driving older cars are unable to afford new EVs.
Simon Christie (4WD TV): Advocated for increased domestic natural resource extraction. He expressed openness to hybrid vehicles.
Rachael and Alex Guinman (EV purchasers): Cited the fuel crisis as a factor in their decision to purchase an EV.