New car purchases speed forward with EVs standing out, but supply lags

new cars and electric vehicles aerial shot on mega highway from above

Recent figures from the Federal Chamber of Automotive Industries (FCAI) show new car purchases at the highest levels for August since 2017. 

Last month saw Aussies snapping up roughly 95,256 vehicles, a 17.3% increase on the August result for 2021. This brings the total for cars purchased year-to-date to roughly 717,575 for 2022. 

This is an encouraging sign when it comes to economic recovery in the light of COVID-19, as it indicates that people are back spending money on big ticket items.

Electric vehicle makes like Tesla race for dominance

Chief executive of the FCAI, Tony Weber notes the growing role of EVs in the recovering automotive sector.

“EV sales were 4.4 per cent of the total market. This is the highest market share for pure battery electric vehicles ever recorded in a single month in Australia. … Combine electrified vehicles now just over 10% of total sales in 2022,” says Weber. 

Of that, Tesla numbers are especially striking, selling 3,397 vehicles. The Tesla Model 3 was one of Australia’s top 5 vehicles for the month in sales, along with perennial favourites the Ford Ranger, the Toyota Hi-Lux, Landcruiser and RAV4.

The growing demand to get fossil fuel-powered vehicles off the road is trickling through to consumers, with greater support being slowly felt by the public. 

Bank Australia’s plan to phase out car loans for new petrol and diesel vehicles is just one of many ways banks are signalling their support for green car financing. Lenders like Pepper Money are also offering incentives like 12 months of free charging with their car loans to incentivise EVs over other cars. Federal announcements for tax breaks and cuts to import tariffs could also provide much-needed help.

There is one small thing standing in the way of the growth in sales, no matter what car you’re trying to get your hands on - supply.

New car supply still slowed to a crawl

Though the numbers continue to rise for cars being purchased, Australia is still dealing with major delays in new car supply.

Second-hand cars remain in serious demand, as companies like Toyota can operate between a 12 and 18 month delay for new cars. Product backlogs and waitlists make purchasing a new car a serious undertaking. 

Editor-in-chief of Carsales, Mike Sinclair, notes that the global industry is also shifting towards an EV-based production line, which could be slowing the ability of car manufacturers to invest in existing models. 

There is still no solution in sight to global chip shortages and ongoing fuel price costs, and no clear answer to when car supply might start to look normal again. Still, it looks like many Aussies are willing to wait.

If you’re also looking to jump into the car market, take a look at Mozo’s best car loans.

Compare car loans - last updated 26 February 2024

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* WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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