Sales of some of Australia’s most popular diesel utes and four-wheel drives have fallen sharply as the continued spike in fuel prices prompted by the conflict in Iran pushed electric vehicle purchases to another new monthly record in April.
About one in six cars sold last month were fully electric models, with popular Chinese brand BYD second only to long-term incumbent Toyota in terms of total cars sold – the highest an EV manufacturer has ever ranked.
The sales surge is being driven by sustained high fuel prices, which peaked in late March at $3.10 a litre for diesel and $2.59 a litre for unleaded petrol and are expected to remain high as the blocked Strait of Hormuz continues to choke oil supply.
The fuel price increase is also stifling consumer interest in large diesel utes and four-wheel drives, with popular models such as Ford’s Ranger and Everest and Toyota’s HiLux and Prado all experiencing substantial falls in year-on-year sales.
The biggest loser was the HiLux, which had a 31 per cent drop-off in sales relative to April 2025, followed by the Everest, which lost more than 29 per cent, according to data from the Federal Chamber of Automotive Industries (FCAI) and the Electric Vehicle Council.
The HiLux and Ranger remained the second and third best-selling vehicles across the month, although overall sales of petrol and diesel vehicles have fallen every month this year.
Overall sales of petrol cars in April were down 30 per cent, while diesel vehicle sales were down 21 per cent.
BYD’s Sealion 7 electric vehicle was the biggest winner in percentage terms, with sales up more than 139 per cent year-on-year. Chinese-manufactured cars made up about 30 per cent of new cars sold in April. China has overtaken Japan as our biggest source of imported vehicles year-to-date.
FCAI chief executive Tony Weber said the changes were driven in part by generous federal government tax breaks for electric vehicle purchases, which will continue in full until March next year before being gradually scaled back.
“The [tax break] has provided important stimulus to the market, and its continuation will support the growth of EVs,” Weber said.
“Stronger EV uptake is driving increased demand for public charging, and that demand must be matched by a step change in both public and private investment to ensure infrastructure keeps pace.”
The policy, which exempts drivers from fringe benefits tax if they buy an EV worth less than $91,387 via a novated lease, can save a vehicle owner tens of thousands of dollars over several years but has been criticised by tax experts for disproportionately favouring wealthier drivers.
Under changes announced on Tuesday, the government will modestly decrease the tax breaks for vehicles priced above $75,000 from March next year, before scaling it back more significantly in 2029.
Lachlan Vass, a research manager at think tank e61, said the changes were limited and did not address the problem of greater tax breaks flowing to wealthier drivers.
“The inequitable treatment – with people on higher incomes and those buying more expensive cars gaining a larger subsidy – will continue long-term under this reworked policy, as the reduced FBT discount will still be based off an individual’s income and the cost of their car,” he said.
“Our analysis shows that individuals earning $200,000 a year receive more than double the subsidy as someone on $50,000 when buying the same car.”
Data released last week by the Australian Taxation Office in response to a freedom of information request by The Australian Financial Review showed that 30.6 per cent of novated leases entered into under the fringe benefits tax (FBT) exemption to October 2025 were taken out by motorists earning more than the top tax threshold.
Opposition Leader Angus Taylor on Tuesday said the tax break should be removed entirely rather than wound down over time.
“It should be wound back faster, immediately,” he said. “It’s not means tested. Some of the wealthiest Australians are getting a handout from this government – that’s just a sign of how they’ve got their priorities so wrong.
“This is not the right time to be spending that money.”
Extracted in full from: https://www.afr.com/policy/energy-and-climate/diesel-ute-sales-fall-off-a-cliff-as-fuel-prices-bite-20260505-p5ztwb
