Moment of truth for electric cars: Why 2025 may prove make or break for EVs if Tesla Model Y and Model 3 continue to dominate and new models such as the Hyundai Inster, Kia EV5, Volkswagen ID.Buzz and MG ES5 fall flat | Opinion

According to the Chinese Zodiac 2025 is the ‘Year of the Wood Snake’ but it could prove to be the ‘Year of the Electric Car’ when we look back on it. That’s because electric vehicles (EVs) have a lot to prove in 2025 after surging (pun intended) and now seemingly in need of a recharge (pun also intended).

The truth is all those reports of ‘record EV sales’ in recent years comes largely down to the fact that Tesla only began reporting its sales partway through 2022. That was after it was well-established and therefore recent growth figures have been inflated, as Tesla suddenly added big numbers to the mix.

That’s the core of the problem for the EV market in Australia — it’s too focused on Tesla. The American brand makes up nearly half of all EVs sold in this market. The good news is, based on the latest data the brand makes up ‘only’ 42 per cent of total EV market, down from more than 50 per cent in 2023 (although we don’t have the final end-of-year figures for 2024 at the time of writing).

That’s still too much market share for EVs broadly speaking to be considered a success when nearly 20 other brands are selling electric models. At the moment, Tesla dominates the market and people’s perception of electric cars.

To be clear, that’s no slight on Tesla, the company has done very well promoting itself, but if EVs are ever going to become mainstream one brand cannot command nearly half of the total market — not even Toyota manages that! 

Certain brands have bet big on a significant EV uptake by the end of this decade and at the current rate of growth it’s simply not looking good. EVs are still a niche proposition, accounting for just 7.4 per cent of the total new car market.

Meanwhile hybrids and plug-in hybrids are growing at a much faster rate (79% and 100% respectively in the first 11 months of 2024). Plug-in hybrids are coming from a low base, hybrids are not and will comfortably out-sell EVs again in 2024.

There is a pattern emerging from across the industry that is seeing brands that made bold public declarations of going ‘all-electric’ in the near-future suddenly changing course and looking to hybrids and plug-ins as both the short and mid-term future. Porsche, a brand that was prepared to radically shift its entire line-up (save the 911) to electric power by 2030 has admitted it is changing and will likely continue with petrol-electric hybrids for the foreseeable future.

The initial surge appears to have been driven by government pressures around the world, but particularly in Europe and the United Kingdom, but with cost-of-living pressures continuing in the wake of the global pandemic, governments are suddenly less concerned with emissions a decade from now and more focused on cutting prices of consumer products as soon as possible. Naturally that means ditching plans for more expensive electric cars and giving car makers more freedom to choose powertrain solutions that work for today’s buyers.

Not that this is the end of the road for EVs, but 2025 will be a make or break year for them in Australia, because if sales continue to stagnate they will likely be further dropped down the priority order from manufacturers.

Still, there are some exciting recently launched and upcoming models that could spur interest, such as the Kia EV5, Hyundai Inster, Volkswagen ID.Buzz, Cadillac Lyriq, Audi Q6 e-tron, MG ES5 and more. 

Will they eat into Tesla’s sales or lure buyers from petrol and hybrid alternatives? Only time will tell but it will be crucial to see where the sales stand at the end of 2025 to determine how the future of electric vehicles in Australia look going forward.