BYD headquarters in Shenzhen, South China's Guangdong Province. Photo: VCG

Australian market data recently highlighted the strong sales momentum of Chinese electric vehicle (EV) giant BYD over the past two months, with its rise to second place - behind only Toyota, with RACV, one of Australia's major motoring organizations predicted the brand plans to be market leader.

The shift was driven by rising demand for new EVs in Australia, while BYD's technological edge in electrification and increasingly diversified product portfolio helped it capture the changing market preference, industry observers said, drawing on Australian industry data.

According to report by Australian automotive media outlet CarExpert on Wednesday local time, BYD said Australian consumers will determine when it topples long-time sales leader Toyota, following a sales surge that saw the Chinese EV make place second overall for a second consecutive month in May 2026.

Toyota Australia delivered 76,017 new vehicles in the first five months of 2026, ahead of BYD's 33,454 units, the report said.

CarExpert highlighted that this carmaker's rapid growth has seen its sales more than double from 15,199 at the same point last year, while Toyota's tally has fallen from 100,753 as the gap between the two brands continues to narrow.

BYD had also already demonstrated strong momentum in April sales figures, signaling its rapid climb up the Australian market rankings. 

In April, Chinese car brands maintained a strong presence, with four of the top 10 sellers for the month again being Chinese marques: BYD in second, GWM in seventh, Chery in eighth and MG in ninth, data from Australian Automotive Dealer Association (AADA) showed. While Toyota retained its position as market leader with 15,185 sales, said association, per AADA.

BYD's rapid rise in Australia was underpinned by its technological capabilities, product innovation and economies of scale, which have helped the company build advantages in batteries, electric powertrains and product offerings, said Zhang Xiang, secretary-general of the International Intelligent Vehicle Engineering Association.

The company's ambitions and recent performance have prompted parts of the Australian auto industry to make increasingly bullish projections about BYD's long-term market share potential.

According to a post on May 27 by RACV, BYD is set to become one of the top three car brands in Australia in 2026, and it eventually plans to be market leader.

This year, the Chinese EV company has also delivered strong performances across overseas markets.

Reuters' report on June 1 noted BYD's sales abroad in May rose 80.4 percent year-on-year to 160,644 units in May, supported by stronger demand for EVs in Europe and emerging markets driven by higher oil prices.

For Australia, the ongoing shift toward new EVs and a supportive policy environment are emerging as key foundations for the carmaker's sustained market expansion.

Australia's soaring sales of EVs and plug-in hybrids (PHEVs), and to a lesser extent regular hybrids, helped drive up Australia's overall new-vehicle market in April, according to CarExpert's report on May 5. The report noted that hybrid sales were up by 27.1 per cent year-on-year, EVs by a big 157.2 per cent, and PHEVs by an even larger 270.2 per cent.

In April, EVs accounted for a record 16.4 percent of Australia's overall new-vehicle market, while hybrid vehicles captured 19.3 percent and PHEVs reached 10.2 percent — all marking record-high market shares, according to CarExpert.

On May 5, AADA stressed buyers continue to shift toward low-emissions vehicles amid ongoing fuel price pressures.

But beyond rising fuel costs, Australia's policy environment has also remained supportive of the transition toward new energy vehicles.

The increase in supply of EVs since the introduction of the New Vehicle Efficiency Scheme, combined with higher petrol prices and the continued support provided through the Federal Government's Electric Car Discount, is now translating into stronger demand, Federal Chamber of Automotive Industries (FCAI) Chief Executive Tony Weber said, according to a FCAR report on May 5, noted that Electric Car Discount will continue would help sustain momentum in the market. 

According to Weber's April comments, the Australian automotive industry would welcome a sustained shift to EVs, given its substantial investment in bringing more than 100 EV models to the Australian market and the industry's efforts to meet ambitious NVES targets, per a FCAR report released on April 7.

Zhang noted that higher fuel costs, partly driven by geopolitical tensions this year, have accelerated Australian consumers' shift toward new energy vehicles. 

He added that Australia's relatively strong consumer purchasing power, mature auto market and faster vehicle replacement cycles have also created favorable conditions for higher EV penetration, Zhang said. "Against this backdrop, BYD's broader model lineup has further strengthened its competitive position and supported its rapid expansion in the local market."