By Jennifer Dudley-Nicholson

A growing number of motorists are putting the brakes on petrol and diesel vehicles, instead choosing hybrid and electric models for their next car. 

The trend is accelerating in 2026, according to figures from the Federal Chamber of Automotive Industries on Wednesday, as new petrol vehicle sales dipped almost 15 per cent in January.

By comparison, sales of new electric, hybrid, and plug-in hybrid cars all surged during the month.

The news comes one day after the Clean Energy Finance Corporation announced a $60 million program to cut the cost of electric vehicles loans in a bid to help the nation reduce transport emissions by 2035.

The latest sales figures from the chamber showed hybrid cars, such as the Toyota RAV4, made up 17 per cent of sales after growing by two per cent in January.

Plug-in hybrid vehicles continued to experience the greatest sales growth, up more than 170 per cent compared to January 2025 to make up 5.9 per cent of new cars sold.

Petrol-powered cars still represented the greatest number of new vehicle sales but fell 14.7 per cent during the month, while diesel vehicle sales fell more than three per cent.

The move to more fuel-efficient, low-emission vehicles had become a clear trend to fit consumers’ lifestyles, Federal Chamber of Automotive Industries chief executive Tony Weber said.

“We are seeing fewer petrol vehicles sold and rapid growth in plug-in hybrids, while uptake of hybrid and battery electric vehicles is more stable,” he said.

Electric vehicle sales more than doubled in January compared to the same month in 2025 and made up 8.4 per cent of all new vehicles sold.

Chinese brand BYD again claimed the title of Australia’s top electric car maker, with more than 2779 electric car sales during the month, while sales for US firm Tesla dropped 32 per cent to 501 cars.

Other Chinese brands also rose in popularity during January to make the nation the second biggest source of new vehicles, racing past Thailand, but still bested by Japan.

SUVs remained the most popular vehicle design in Australia by a significant margin, representing almost two in every three cars sold during January, although passenger vehicle sales turned around their decline to rise 4.6 per cent.

Utes claimed the top two spots in Australia’s most popular vehicles, with the Ford Ranger surpassing Toyota’s HiLux, but Toyota was the most popular brand, followed by Mazda and Kia.