Annual Mobility Study 2026: Australian Insights Into the Future of Mobility

Australia’s Mobility Inflection Point: EV Momentum, Regional Barriers and the Next Wave of Competition

Australia’s mobility market shows clear signs of moving from early adoption towards broader electrification. Electric vehicles (EVs) and hybrids are gaining share, consumers are more open to switching and total cost of ownership has reached parity with internal combustion engine (ICE) vehicles. Adoption remains uneven. Urban consumers are moving fastest, while rural drivers face constraints related to range, charging access and longer travel times.

L.E.K. Consulting’s Annual Mobility Study, now in its 10th edition, surveyed more than 5,000 respondents from seven countries: Australia, Canada, France, Germany, Spain, the UK and the US. The Australian sample included 500 respondents across age groups, regions, income brackets and states.

In Australia, the EV and hybrid share of registered vehicles increased from 1.5% in 2021 to 5.9% in 2025. EVs rose from about 0.1% to 1.6%, and hybrids increased from about 1.4% to 4.4%. Hybrids still have 2.5 times the market share of EVs, but EVs are growing faster, with a 36.1% compound annual growth rate from 2021 to 2025 compared with 9.9% for hybrids. Petrol and diesel vehicles still dominate the registered fleet at 93.5%, but the direction of travel is clear: alternative powertrains are becoming a larger part of the Australian vehicle parc.

Economics are reframing the EV decision

Australia continues to lag Europe, the UK and Canada in EV penetration, but it has overtaken the US. EVs represented around 9% of Australian new vehicle sales in 2025, while EVs and hybrids together reached 30%. These trends indicate improving conditions for EV uptake, supported by higher fuel prices, broader model availability and more favourable ownership economics.

Cost parity is central to this shift. Our analysis indicates EV and ICE total annual cost of ownership reached parity between 2024 and 2025. Survey data suggests about 51% of non-EV owners who would consider buying an EV are now willing to purchase one at current price levels. As upfront price becomes less of a barrier, undecided consumers are more likely to enter the market, particularly if fuel prices remain elevated and lower-cost EV models expand.

Environmental concern plays a secondary role. Only 55% of Australian respondents rated personal responsibility to reduce environmental impact at five or above on a seven-point scale, compared with 61% in the UK and Germany and 63% in Spain. EV messaging in Australia must therefore lead with economics, convenience, reliability and product quality.

Urban-rural divide remains a constraint

Regionality is the clearest constraint on mass adoption. Urban non-EV owners show 72% EV purchase intent within three years, compared with 41% for suburban consumers and 37% for rural consumers. Rural drivers are nearly twice as likely as suburban drivers to travel more than 500 kilometres per week — at 32% versus 18%. Longer trips, lower charging density and greater dependence on range make EV adoption harder outside urban markets.

These concerns are grounded in usage needs. EVs typically offer 200 to 600 kilometres of range, with select models exceeding 700 kilometres. Hybrids generally offer 800 to 1,200 kilometres, making them more practical for many rural drivers. The number of public charging points increased 121% from January 2022 to March 2025, while EV registrations grew 675%. In regional areas, only around one-third of towns have a charger within 20 kilometres. Until charging access improves, rural range anxiety will remain a barrier.

Competition is shifting as choices expand

As the economics improve, competition is shifting towards product quality, reliability and choice. Both EV and non-EV owners rank vehicle quality as the leading purchase criterion. EV and hybrid owners emphasise battery lifetime, range, warranty and charging infrastructure. Non-EV owners focus more on upfront price, including home charging, followed by battery quality and range. Younger consumers aged 25 to 44 place high value on model availability, making breadth of choice an important lever.

Chinese EV brands are well positioned against this backdrop. Australia has the highest familiarity with Chinese car brands among surveyed countries, supported by reliance on imports. Purchase intent among Australian non-EV owners familiar with the BYD brand rose from 16% in 2024 to 39% in 2026. BYD EV sales increased from about 7,000 units to 11,000 units, and its EV sales share rose from 7% to 11%. Tesla purchase intent remained stable at 8% to 9%, suggesting Chinese brands are expanding the addressable market rather than simply converting Tesla loyalists.

The broader sales mix reinforces this shift. From 2024 to 2025, ICE vehicle share fell from 75.7% to 70.2%, EV share rose from 7.7% to 8.7%, hybrids increased from 14.6% to 16.6% and plug-in hybrids grew from 2.0% to 4.5%. The transition is a gradual broadening of hybrid, plug-in hybrid and fully electric options.

Autonomous vehicles (AVs) remain a longer-term opportunity

AVs are likely to follow, rather than lead, Australia’s mobility transition. Australians are more resistant to AV taxis than are European consumers: 48% say they would never use one, compared with 42% in Europe. Only 14% would use one without hesitation. Safety is the dominant issue, cited by 70% of concerned respondents, followed by distrust of technology at 48%, connectivity or GPS issues at 43%, sensitive data collection at 31% and job loss for taxi drivers at 30%.

Based on relative EV adoption and consumer readiness, Australia appears to be three to five years behind Europe on the pathway to AV deployment. Commercial AV use is more likely in the late 2020s, led by urban ride-sharing. For now, the central mobility story is electrification. Cost parity has opened the door, Chinese brands are intensifying competition, and infrastructure investment will determine whether Australia can reach mass-market adoption.

To learn more about Australia's mobility transition and what it means for your business, download the full report.