The global share of drivers buying petrol and diesel cars will never return to its 2017 peak, the International Energy Agency has declared, as electric and hybrid vehicle purchases continue to surge on the back of high fuel prices and rapidly declining costs.
Almost one in every three cars sold globally in 2026 will be either an electric vehicle or a plug-in hybrid, while the EV share of total car sales is likely to rise to more than 50 per cent within the next ten years, the IEA said in a major new report.
The prediction follows a major shift in Australian EV sales over the last five years, with the share of purchases rising from about 1 per cent in 2020 to a record 16.4 per cent share in April this year.
Sales of some of Australia’s most popular diesel utes and four-wheel drives have also fallen sharply over the past four months, with top models such as the Toyota Hilux and the Ford Everest down about 30 per cent in April.
The changes have been driven by the promise of fuel cost savings, falling EV prices and generous government policy incentives, which in Australia is centred on a significant tax break for electric vehicles purchased under novated leasing schemes.
The IEA said cost competitiveness and energy efficiency of electric vehicles meant sales of internal combustion engine vehicles had peaked forever.
“The increasing cost-competitiveness of EVs, along with tighter CO2 and fuel economy standards, are poised to drive market growth, pushing up the share of EVs in global car sales to around 50 per cent in 2035 in the IEA’s exploratory scenarios,” the report said.
“By contrast, the share of [internal combustion engine] cars continues to shrink in all scenarios, and sales never return to their 2017 peak.”
The IEA, a Paris-based intergovernmental agency set up in the 1970s to respond to oil shocks, said the global fleet of EVs would increase sixfold over the next decade – even without any new policy announcements.
In global terms, Australia remains an electric vehicle laggard, the IEA report shows, with the recent record 16 per cent EV sales share dwarfed by many Asian and European countries.
In Norway, the global leader in EV uptake, about 97 per cent of all new car sales were electric in 2025. In January, only seven petrol cars were sold in the country.
Alongside Norway, countries where EVs made up more than 50 per cent of new cars include Nepal, China, Iceland and Singapore.
Countries with lower EV penetration than Australia include Canada, South Korea, New Zealand and the United States.
IEA executive director Fatih Birol said electric car sales had set new records in more than 100 countries in 2025.
“The growing popularity of EVs has marked a major shift for car markets and the energy system as a whole – and it is providing some relief now amid the largest oil supply shock in history,” he said.
China accounted for 60 per cent of the EVs sold globally in 2025, while European and North American manufacturers made up around 15 per cent each.
China also dominates EV supply chains, accounting for more than 80 per cent of battery production in 2025 and even higher shares of key materials in EV batteries, the report said.
Electric Vehicle Council head of policy Aman Gaur said buying an EV could save up to $3000 in running costs compared to a petrol or diesel car.
“With surging petrol prices and geopolitical uncertainty, people around the world are making the sensible decision to step into EVs which are cheaper to run and aren’t dependent on expensive, foreign fuels.”
Extracted in full from: https://www.afr.com/policy/energy-and-climate/the-world-has-left-petrol-cars-behind-and-they-aren-t-coming-back-20260521-p5zzdx
