Key takeaways
Millennials, now Australia’s largest generational group, are moving to the urban fringes as they start families, increasing reliance on cars in car-dependent suburbs. Outer suburbs often lack adequate public transport, necessitating multiple vehicles per household, particularly SUVs.
Car ownership remains a status symbol and reflects values like security, authority, and masculinity, especially with the popularity of SUVs. A shift from compact cars to larger SUVs has created a societal “arms race,” driven by both safety concerns and cultural trends.
EV adoption is growing, but they account for only 1% of Australia’s 15 million vehicles due to slow fleet turnover and aging car stock.
Insufficient charging infrastructure and high costs remain barriers, though fleet operators are leading the transition.
Australia’s population is projected to grow by 1.5 million by 2041, adding around 1 million cars to already congested urban roads.
Solutions like walkable communities, better public transport, and work-from-home policies can mitigate congestion but face limitations in low-density areas.
Fully autonomous vehicles could revolutionize car ownership and urban spaces but are hindered by technological, economic, and industry barriers.
While alternative transport and urban design improvements are crucial, cars will remain central to Australian life. Policymakers and planners must integrate sustainability with the realities of Australia’s car-dependent culture.
The car has long been a symbol of independence, mobility, and status in Australia.
As we look ahead, the next decade promises significant changes in how we drive, where we live, and what we drive.
What’s fueling these changes?
That’s what Simon Kuestenmacher and I discuss in this week’s Demographics Decoded podcast, so let’s put the pedal to the metal and dive into the complex relationship between Australians and their cars.
For weekly insights and strategic advice, subscribe to the Demographics Decoded podcast, where we will continue to explore these trends and their implications in greater detail.
Subscribe now on your favourite Podcast player:
Demographics driving the future of car ownership
Australia’s changing population dynamics will be one of the key drivers of car ownership trends over the next decade.
Millennials, now the country’s largest generational cohort, are entering the family-formation stage of life.
Currently, many millennials live in inner-city areas, where they rely on public transport, cycling, or walking.
However, as they have children—at an average of 1.5 per household—they will move to the urban fringes where larger, family-friendly housing is affordable.
This migration to the outskirts brings with it an increased reliance on cars.
Unlike inner-city areas with tram or train networks, the outer suburbs are overwhelmingly car-dependent.
Families transitioning to these areas often find themselves needing not just one, but two or even three cars to manage daily life and most of these will be SUVs.
What’s more, Australia’s cities are growing outward at a faster pace than public infrastructure can keep up.
Promises of new train stations and bus services for growth corridors are often delayed for years, leaving residents with little choice but to rely on private vehicles.
These trends point to a steady increase in car ownership rates despite environmental concerns or preferences for alternative modes of transport.
Cultural influences: the psychology of car ownership
Beyond practicality, cultural and psychological factors play a significant role in car ownership.
In the past, getting a driver’s license was a rite of passage for young Australians, often achieved as soon as they were legally allowed.
Today, this urgency has diminished.
Millennials and Gen Z, especially those living in well-connected urban areas, are delaying getting their driver’s license, relying on rideshare apps or public transport instead.
But of course, cars still hold significant symbolic value.
For many, especially in suburban and regional Australia, owning a car is about more than transportation—it’s a reflection of you status, security, and even masculinity.
The larger size of SUVs offers a sense of safety and authority on the road, but deep down, SUVs and trucks have become status symbols for many young Australians.
And this has created a feedback loop.
As more people buy bigger cars, others feel compelled to follow suit not just to ensure their own safety, but to keep up with the Joneses.
This “arms race” of vehicle size has led to a shift from compact sedans to oversized SUVs, which now dominate Australia’s best-seller lists.
Ironically, these vehicles often outgrow their garages and struggle to navigate narrow inner-city streets, creating further complications.
The Rise of Electric Vehicles (EVs): progress and challenges
Electric vehicles (EVs) are gradually reshaping Australia’s automotive market, but the transition is only starting.
Brands like Tesla and BYD have gained traction, with approximately 160,000 Teslas and 50,000 BYDs now on Australian roads.
However, with over 15 million vehicles in the national fleet, EVs still account for only about 1% of the car population.
One of the barriers to widespread EV adoption is our aging car fleet.
- Also read:52 years of valid reasons not to invest
- Also read:This week’s Australian Property Market Update – Latest Data, State by State March 18th 2025
- Also read:Brisbane’s property market forecast for 2025
- Also read:Melbourne property market forecast for 2025
- Also read:Latest property price forecasts for 2025 revealed. What’s ahead in our housing markets in the next year or two?
The average age of vehicles in Australia is 11.2 years, and in Tasmania, it’s even older at 13.5 years.
Many Australians hold onto their cars for decades, a practice driven by economic factors and the durability of modern vehicles.
This slow turnover rate means it could take years, if not decades, for EVs to become mainstream.
Infrastructure also presents a hurdle.
While charging networks are expanding, they remain insufficient for a country as vast as Australia.
Fleet operators and businesses, often under pressure to meet climate targets, are beginning to transition to EVs, but they must navigate challenges like supply chain constraints and upfront costs.
Australia’s population is projected to grow significantly, with another 1.5 million people expected by 2041.
This population boom will bring an estimated one million additional cars onto the roads, compounding congestion issues in major cities like Melbourne, Sydney, and Brisbane.
These challenges are further exacerbated by Australia’s low population density, which makes European-style public transport systems economically unviable.
Urban planners face a critical challenge: how to reduce road congestion without limiting mobility.
One solution lies in creating walkable communities where jobs, schools, and shops are located within close proximity to housing.
Policies promoting work-from-home arrangements can also help ease traffic, especially in sprawling cities like Melbourne, where commuting distances are significant.
However, these solutions can only go so far.
In many areas, cars will remain the most practical and sometimes the only viable option.
Obviously balancing the needs of drivers with the demands of growing populations will require careful planning and investment.
The self-driving car revolution: a pipe dream?
The promise of self-driving cars has captured the imagination of urban planners and technologists alike.
In theory, autonomous vehicles could eliminate the need for individual car ownership, reducing the national fleet by as much as 70%.
Parking lots could be repurposed into parks and public spaces, and traffic congestion could become a thing of the past.
But there are significant barriers to this utopian vision.
Car manufacturers have little incentive to support a model that drastically reduces vehicle production.
Additionally, the technology for fully autonomous vehicles is still years, if not decades, away from being reliable and widespread.
For now, self-driving cars remain a fascinating concept rather than a practical reality for Australia.
The road ahead
Australia’s car culture is deeply ingrained, and while trends like EV adoption and self-driving technology will shape the future, the car’s dominance is unlikely to wane anytime soon.
The challenge for policymakers, urban planners, and communities is to adapt to this reality while striving for sustainability and improved livability.
Investing in better public transport, encouraging alternative modes of transport like cycling, and promoting smarter urban design will be key.
But these measures must be balanced with the understanding that for many Australians, the car is more than a convenience—it’s a way of life, and as I said, a status symbol.
The road ahead is crowded, but with bold thinking and collaborative efforts, we can navigate the challenges and ensure a future that accommodates both progress and practicality.
Whether it’s through embracing new technologies or reimagining our cities, the journey promises to be as transformative as it is complex.
If you found this discussion helpful, don't forget to subscribe to our podcast and share it with others who might benefit.
Subscribe now on your favourite Podcast player:
