Last year saw a record for new vehicle sales in Australia, but the market faces stronger headwinds in 2025, according to vehicle services and market intelligence firm Cox Automotive Australia (CAA). Here’s a snapshot of what they’re forecasting:
1.18 million
The number of new vehicles expected to be sold in 2025, a reduction of about 5% on 2024’s record tally of 1,237,288 vehicles.
393,000
Approximate number of electrified vehicles – including EVs, plug-in hybrids (PHEVs) and hybrids – expected to be sold in 2025. CAA is forecasting close to one-third of the market will be electrified, up from 24% in 2024. Toyota will remain the hybrid vehicle leader but will face additional competition from the growing number of competitors.
236,000
The number of new vehicles Australians are expected to buy from Chinese manufacturers, including MG, GWM, BYD, LDV and Chery in 2025, representing 20% of sales. That’s up from 12%, or 142,000, vehicles in 2024.
115,000
The number of pure EVs expected to be sold in 2025 across passenger, SUV and light commercial market segments, representing about 10% of the overall market, up from 7.7% or 91,292 sales in 2024. BYD and Tesla will be significant drivers of this growth, with Tesla recently launching a major update for the best-selling Model Y and BYD continuing to expand its range.
70
The number of new EVs, PHEVs and hybrids expected to launch in 2025, including the BYD Shark and Ford Ranger PHEV utes, BYD Sealion 7, an updated Tesla Model Y, Kia EV4, and new Subaru Forester hybrid.
38
The number of different brands selling at least one battery electric EV (BEV) in 2024, up from 29 brands in 2023 and representing nearly 100 models. This number is expected to grow further in 2025.
15
The number of Chinese brands expected to be competing in the Australian market by the end of 2025, covering all segments and fuel types. Chinese model launches will include the BYD Shark and Sealion 7 EV; Chery Tiggo 9 SUV; Jaecoo J7 SUVs; LDV eTerron 9 electric ute; MG ES5 EV and HS hybrids; GWM Haval H7; Geely EX5; Leapmotor C10; plus, growth from newcomers such as Zeekr, Deepal and JAC.
10
The ‘Big Picture Factors’ highlighted by CAA as potentially shaping the 2025 new car market:
- Oversupply of vehicles leading to excess inventory and more discounting.
- Matching sluggish BEV demand to steepening manufacturer targets and ongoing market fragmentation.
- The impending product avalanche from China-based car makers that see Australia as a lucrative market.
- Comparatively tepid private demand across the second half of 2024 continuing into 2025 due to cost-of-living increases and a reduction in household savings.
- The Reserve Bank’s decisions on cash rate cutsm which will eventually liberate more household discretionary spending.
- The health of the Australian Dollar will impact what happens to the exchange rate with other currencies including the USD, Japanese yen, and Thai baht.
- The introduction of the New Vehicle Efficiency Standard, although its impact is not expected to be felt fully until 2026 and beyond when targets ramp up.
- The Federal Election and the impact on government and corporate sales, as well as business and consumer sentiment.
- Fringe Benefit Tax exemptions for PHEVs ending in April, impacting novated lease uptake, offset by the rollout of more PHEV light commercial utes and vans.
- Steeper-than-average population growth post-COVID increasing the buyer pool. There are now more than 27 million people calling Australia home – an increase of 1 million people in less than two years.
*Information for this story was sourced from Cox Automotive Australia’s (CAA) 2025 Industry Outlook Report. CAA is a full subsidiary of Atlanta-based Cox Automotive Inc, the world’s largest end-to-end vehicle services company. In Australia the company owns Manheim auctions, which sells cars, heavy commercials and salvage on behalf of fleets, governments, business, OEMs, insurers, financiers and more.
