Hybrid vehicles have become the preferred pathway to fleet electrification for Australian businesses, with new research showing operators are increasingly choosing hybrid technology over battery electric vehicles as they balance emissions reductions with cost and practicality.
The findings, from the 2026 Australian Corporate Fleet Insights Report and Australian Small Fleet Insights Report by Fifth Quadrant and the Australasian Fleet Management Association (AFMA), reveal that while fleet operators remain committed to reducing emissions, many are taking a more gradual approach to electrification.
Among corporate fleets, hybrid ownership increased from 41 per cent in 2024 to 56 per cent this year, while battery electric vehicle ownership rose only marginally from 20 per cent to 22 per cent. Smaller fleets followed a similar trend, with hybrid ownership more than doubling from 12 per cent to 27 per cent, compared with battery electric vehicle ownership increasing from just three per cent to six per cent.
Fifth Quadrant director Ben Selwyn said fleets were continuing to electrify, but not in the way many had anticipated.
"Hybrids let a fleet cut fuel use and emissions now, while charging infrastructure and vehicle range catch up to what battery electric actually needs," Selwyn said.
The research, based on responses from 643 Australian fleet operators, also highlights the differing priorities of large and small fleet operators. While reducing running costs is now the leading concern across both segments, corporate fleets are adopting artificial intelligence at a much faster rate than smaller businesses.
Sixty-two per cent of corporate fleets are already using or trialling AI for administrative and compliance tasks, compared with 24 per cent of small fleets. However, the research found the largest corporate fleets were often slower to embrace AI than medium-sized operators because of more complex approval processes.
Safety also remains a major priority, although the report found many smaller fleet operators have yet to introduce formal vehicle safety purchasing policies, highlighting the different challenges facing Australia's diverse fleet sector.
Download a copy of the reports by clicking here.