Wealthy people were the first to buy electric vehicles. The current boom risks entrenching inequality

Australia is in the midst of an electric vehicle boom. The combined rise of battery electric, plug-in hybrids and conventional hybrid cars is steadily shifting the long-term market dominance of petrol and diesel.

This is good news for reducing transport emissions, but what might it mean for socioeconomic inequality?

Two years ago, we examined more than two decades of rooftop solar installations across Australia to see what made people get solar panels.

We found income and education mattered, but less than we had expected. And one finding stood out: households facing economic uncertainty were more likely to install solar panels. Areas with higher unemployment actually installed solar faster, perhaps as a way to reduce energy bills.

We wondered if electric vehicle (EV) purchases would tell a similar story. But our latest research suggests the opposite, at least for early adopters.

The first to buy EVs were wealthy

When we looked households that bought EVs in New South Wales between 2017 and 2021, a clear picture emerges. Unlike solar panels, EV uptake was overwhelmingly concentrated among higher-income households.

Our research, across 673 postcodes across NSW, used a combined measure of income and mortgage payments as a proxy for financial capacity. This reflects how many non-essential purchases households can afford. Wealth turned out to be the strongest predictor of electric vehicle uptake. For each step up in this measure, registrations roughly doubled.

This tells us something important: buying an EV is still largely determined by the ability to manage the upfront cost.

EVs follow car use

The next strongest factor influencing EV purchase is how many people in an area own cars. Suburban areas where households rely heavily on private vehicles showed much higher uptake. Dense inner-city areas showed less. This suggests EVs are not replacing car use. They are following it.

The geography makes this even clearer. Around 85% of EV registrations were concentrated in Greater Sydney, particularly in the affluent eastern suburbs and the Lower North Shore. Western Sydney and most regional areas remained largely absent from the transition.

This reflects a broader reality many Australians will recognise. Wealthier areas tend to have better access to infrastructure, shorter commutes and more flexibility in household budgets.

In areas where more people walk or cycle, we found electric vehicle adoption was also lower. This makes sense: if you rely less on a car, switching to an electric one is simply less urgent.

Our findings suggest where good alternatives exist, such as safe cycling infrastructure, people are less dependent on cars. In these areas, demand for vehicles was lower, regardless of whether they were electric or petrol.

In car-dependent areas, however, the pattern was different. There, electrification largely followed existing habits rather than changing them.

Why this matters

In our earlier research, households under financial pressure were more likely to adopt solar as a way to manage energy costs.

The pattern for EVs, at least for early adopters, is the opposite.

They were bought first by households with more financial capacity, showing not all clean technologies spread through society in the same way. Some are taken up by those looking for savings and security, others by those who can afford the initial investment.

Australia is now entering a faster phase of EV uptake. Decisions made today will shape who benefits most from this transition.

Without targeted support, the shift to EVs risks reinforcing existing socioeconomic inequalities. Households that can afford to switch will benefit from lower running costs, while those who cannot will remain exposed to rising fuel prices.

We are already seeing how global events affect this. Disruptions to oil supply, such as the Strait of Hormuz, can quickly push petrol prices higher. Some households can afford to move away from fossil fuels. Others are locked into them.

Greener transport should not be only for the affluent

Electric vehicles are a key part of Australia’s climate plans.

But this early evidence suggests the transition could widen, not narrow, inequality. First and foremost, reducing reliance on private cars altogether should be part of the solution.

Targeted EV policies are also needed. Subsidies for different income groups could help reduce the upfront cost of electric vehicles. And expanding charging infrastructure beyond inner-city areas would make EVs more practical for a wider range of households. Regional and lower-income communities, in particular, are likely to require different approaches.

Without these steps, EVs risk remaining a technology for the affluent.