A surge in petrol prices linked to geopolitical tensions has accelerated the shift to electric vehicles in Australia, as American consumers increasingly opt for used EVs amid affordability concerns and policy reversals.
Fuel shock drives record EV uptake in Australia
Electric vehicle sales in Australia reached a record high in March 2026, accounting for 14.6% of the total car market, as motorists responded to a sharp rise in fuel prices and ongoing global instability.
Demand has more than doubled compared with the same period last year, driven by an acute fuel shortage and soaring prices at the pump amid continued tensions involving Iran. One in seven buyers chose an electric model last month, seeking protection from energy volatility and reliance on imported oil. Growth was recorded across all states, despite the country’s longstanding preference for large, high-powered SUVs.
If geopolitical tensions persist, analysts suggest the share of electric vehicles in Australia could exceed 20% by the end of 2026. Such a shift would place pressure on authorities to rapidly expand charging infrastructure, particularly in regional areas.
US market shifts towards used electric vehicles
Meanwhile, in the US, sales of used electric vehicles are rising sharply as cars purchased during the post-pandemic boom return to the market, offering a more affordable alternative at a time of rising petrol prices.
According to Cox Automotive, used EV sales rose by 12% in the first quarter compared with a year earlier and by 17% from the previous quarter. By contrast, new EV sales are estimated to have fallen by 28% year-on-year, following the Trump administration’s decision in 2025 to scrap the $7,500 federal tax credit.
Analysts attribute the surge in the second-hand market to an influx of hundreds of thousands of relatively inexpensive vehicles, many of which were leased in the early 2020s and are now being resold as those agreements expire. Credit bureau Experian estimates that electric vehicles will account for 15% of all non-leased cars by the end of this year, up from 7.7% in the first quarter.
The oversupply has pushed prices down. Cox data shows that the average price of a used EV fell by 8.5% between February 2025 and February 2026. Over the same period, the price gap between used electric and petrol-powered cars narrowed significantly, from $4,923 to $1,334.
Policy shifts and leasing deals reshape demand
Dan Levy, an analyst at Barclays, notes that a $7,500 incentive introduced under the Biden administration in 2022 enabled consumers to lease new electric vehicles at lower monthly costs than cheaper petrol models. Last June, the average monthly payment for a leased Chevrolet Blazer EV, with a starting price of $44,600, was $515 — compared with $586 for its petrol equivalent, which had a base price of $35,600.
Data from Edmunds suggests leasing deals helped drive a sharp increase in EV adoption, with their market share in the US doubling between 2021 and 2022 to 5.2%, rising further to 7.7% in 2024 before slipping back to around 6.5% this year.
Price wars and affordability concerns cloud outlook
These incentives also fuelled an aggressive price war led by Tesla, the market leader, as it sought to defend its share. While this boosted sales, it also contributed to declining residual values for used electric vehicles.
Jessica Caldwell, head of insights at Edmunds, said that as more consumers search for value amid the rising cost of car ownership, discounted used EVs flooding the market are likely to act as a “stepping stone” towards full electric adoption.
Petrol prices in the US have this week exceeded $4 per gallon for the first time since 2022, while the average purchase price of a new car remains close to record highs. Analysts say broader concerns about affordability have weighed on overall vehicle sales in the first quarter.
Uncertain future for new EV sales
Against this backdrop, Duncan Aldred, president of General Motors’ North American division, said at a New York automotive forum that the Detroit-based company had seen “some uptick in interest” in electric vehicles last month.
However, analysts caution that it remains too early to determine whether high petrol prices will translate into a sustained increase in new EV sales. Many consumers remain hesitant, citing concerns about long-distance travel in a vast country where charging infrastructure is still underdeveloped.
