Electric Vehicles Drive Economic Growth Amid High Fuel Prices
Australians are increasingly turning to electric and hybrid vehicles as fuel prices remain high. According to Michele Bullock, Reserve Bank governor, petrol prices are one of the most visible and memorable prices for Australians, with most passing a petrol station on their daily commutes.
Fuel prices have fallen from $2.50 per litre earlier this year but still hover at around $2 per litre after the government's fuel excise discount ended in August. This is 20 cents more expensive than the average petrol price across major cities in 2025.
Electric and hybrid vehicle sales have been rising, with nearly one in two vehicles sold between April and June being either electric or hybrid. Fully electric vehicles now make up a fifth of new car sales compared to one-eighth six months ago.
The uptake of electric vehicles is expected to be deflationary in the long term as demand for petrol drops and electricity demands are met using lower-cost solar power. However, this trend may put upward pressure on interest rates if household spending continues to grow stronger than expected.