Australians are buying fewer cars but more electric models, with sales of the low-emission vehicles more than doubling in a month to set a record.
In contrast, new petrol-powered vehicles experienced the greatest slowdown in sales during February and hybrid cars stalled after months of growth.
The trends emerged in figures released by the Federal Chamber of Automotive Industries and Electric Vehicle Council, which also revealed China had become the nation's largest source of new vehicles for the first time since 1998.
New car sales slide
Australians bought 90,172 new vehicles during February, down by 4.5 per cent or more than 4200 units compared with the same month in 2025.
The slowdown, which followed an interest rate hike on February 3, was recorded in every state but Victoria, with the biggest falls in the ACT, Northern Territory, and South Australia.
Sales of petrol cars dropped by more than 17 per cent, or more than 7100 units, although diesel vehicle sales remained steady.
Electric car sales rose to more than 11,100 during February to make up 11.8 per cent of all new car sales and set a monthly record.
That growth was led by the booming popularity of Tesla's Model Y, which became the most popular electric car in Australia with 2791 sales - triple the number sold one year ago.
The popularity of hybrid vehicles dipped during February after a long period of growth, down by 9.6 per cent, although plug-in hybrid car sales rose by more than 20 per cent.
Chinese-made car sales surging
The figures also revealed cars made in China surged in popularity, becoming the most popular origin of new vehicles in Australia for the first time in decades, Federal Chamber of Automotive Industries chief executive Tony Weber said.
"After 28 years, Japan has been overtaken by China as the latest source of vehicles for the Australian market in a single month," he said.
"The Australian market is one of the most open and competitive in the world. Consumers are the beneficiaries of that competition."
Ten automotive brands had entered the Australian market since 2020, Mr Weber said, and nine of those brands manufactured their vehicles in China.
Despite changes in the market, Toyota remained the most popular automaker in Australia during February, followed by Mazda, Ford, Kia and Hyundai.
The Ford Ranger topped Australia's best-selling vehicles for the second month in a row, besting Toyota's HiLux ute, followed by Tesla's Model Y.
