Another interest rate rise from the Reserve Bank of Australia (RBA) this week won’t dampen electric vehicle (EV) sales, given jumps in EV demand after previous rate rises, according to the Electric Vehicle Council (EVC).
Yesterday the RBA increased the cash rate by 0.25 percentage points to 4.6 per cent, its highest level since 2011, following similar rate rises in Europe, the US, Japan, and New Zealand.
The Reserve Bank said the move was designed to help reduce inflation to its targeted range of between two and three per cent.
Australian Bureau of Statistics (ABS) figures released today show the Consumer Price Index (CPI), which it uses to measure inflation, rose four per cent in the 12 months to August 2026, up from 3.5 per cent in July.
“The most recent ABS data shows that while there was an overall softening [of new-vehicle sales], EV sales went up significantly, and our view is that EVs are one of the single most powerful cost-of-living measures available to families,” EVC CEO Julie Delvecchio told CarExpert.
“Three thousand dollars a year is a saving… I can’t think many other things in that category would save that amount of money. I think that’s one of the key drivers that we’re seeing here and with petrol prices not going down anytime soon, we expect that to continue.”
EV sales reached a record 24.9 per cent market share in August 2026, with the State of EVs 2026 report released by the EVC today noting a 117.1 per cent year-on-year increase in EV sales in the first half of this year.
Last month Australians bought more new electric vehicles than petrol-powered ones, with EVs also outselling diesel passenger vehicles in August.
“We can only look at recent history to see what happens [when rates rise],” the EVC’s head of legal, policy and advocacy, Aman Gaur, toldCarExpert.
“We’ve seen half a dozen rate rises, and we’ve seen EV sales go north during that period. So, if you’re looking backwards, look forwards.
“I would say that Australians will continue to try and get away from one of the most discretionary sources of spending in their weekly budget, which is the petrol bill, and they’ll continue to try and get into electric cars as a way of addressing the cost of rising mortgage repayments.”
Petrol and diesel prices have risen in recent weeks, with the Australian Institute of Petroleum (AIP) recording the national average retail price of petrol for the week ending September 27 at 237.5 cents per litre.
That compares to an average of 189.7cpl over the previous 12 months.
Similarly, AIP figures put the average diesel pump price for the week ending September 27 at 286.7cpl, up 13cpl on the previous week, and compared to an average of 219.6cpl over the previous 12 months. The September 27 national averages were 237.5cpl for unleaded and 286.7cpl for diesel.
The averages include record fuel prices earlier this year, which saw the federal government halve the fuel excise paid by motorists, as well as suspend the Heavy Vehicle Road User Charge from April 1.
Earlier this year, the highest average diesel price hit 319cpl, while petrol peaked at an average of 225cpl, although prices were considerably higher in some parts of Australia.
Mr Gaur also responded to queries around whether growing EV sales actually contributed to increasing inflation, with interest rate rises being a knock-on effect.
“The question whether it’s inflationary goes back to whether they’re putting that money back into the economy in other forms. So to put it more simply, that $100 that you were spending on petrol this month, because you’re not spending it now, are you putting it back into the economy?
“In which case it’s adding to demand and you’re causing inflation. Or are you pocketing it and putting it into your mortgage repayment, which is what the RBA wants you to do? I think it’s a hard one to say. It’s such a granular piece of information.”
The managing director of luxury EV brand Polestar in Australia, Scott Maynard, recently told CarExpert more Australians were choosing EVs for fuel independence rather than just saving on fuel costs.
“They [EV buyers] want to be independent of that supply of fuel and be able to energise a car from multiple sources, be as independent as solar, rather than being tied to the supply of oil from faraway lands,” the Polestar boss said.
The EV Council’s State of EVs 2026 report said: “2026 is the year EVs became one of the best ways to save money. All year, it has been cost-of-living pressure and fuel security, not emissions targets, that pushed EVs into the mainstream.
“As an island nation, our energy security has always depended on decisions made elsewhere. Electric vehicles change that equation.”
