There is exciting growth happening in the electric vehicle market in Australia.
Following a momentum of demand for electric vehicles year on year, the Australian Government introduced legislation to make non-luxury electric, plug-in hybrid, and hydrogen vehicles exempt from both the Fringe Benefit Tax (FBT) and the 5% customs duty. While this is still pending approval, the move to exempt electric vehicles from additional taxation like the FBT has been anticipated by those of us in the industry for some time.
This is a timely response to the growing consumer interest and demand for sustainable cars. Electric vehicles currently only represent 1.8% of new vehicle sales this year but demand has increased by 83% since 2021 according to the Federal Chamber of Automotive Industries. Sales of electric vehicles increased by more than 400% in the first five months of 2022 with demand expected to continue.
Governments across Australia are supporting to move to electric vehicles
Further supporting consumer demand are state government projects to supply the infrastructure needed for fast charging stations and provide incentives for increasing the use of zero emissions cars.
- The State Government in Western Australia recently announced plans to install 98 charging stations at 49 locations across the state and is making a $21 million investment in infrastructure.
- South Australia has an Electric Vehicle Action Plan with an investment of $53.25 million with the objective of making electric vehicles the primary consumer choice by 2030.
- The Northern Territory Government has developed a range of actions to support their EV strategy, such as waiving stamp duty fees and registration fees.
- Queensland has a $10 million co-fund towards charging infrastructure, an annual discount on electric vehicle registration, and a $3,000 rebate for zero-emission vehicles valued up to $58,000 for cars purchased from March 2022.
- New South Wales has committed $490 million to EV implementation, including $171 million for charging infrastructure that will install over 230 charging stations across the state by 2025 and offer 7kWh of free power for NSW drivers.
What this means for electric vehicles and novated leasing
The FBT exemption is great news for employers who can provide these car models for employees’ private use and salary packaging. Consumers stand to save thousands with this incentive: the Electric Vehicle Council previously estimated a savings of over $2,000 on a $50,000 model like the Nissan Leaf, and up to $9,000 on the same model on a novated lease.
The vehicles covered under the exemption are zero or low emissions vehicles such as battery electric vehicles, hydrogen fuel cell vehicles, and plug-in hybrid vehicles. The models eligible are those under the luxury threshold ($84,916 for 2022-23).
New and second-hand cars qualify
In another bid for increased sustainability, both brand new and used electric vehicles qualify for FBT exemption. The used model must have a first retail sale of 1 July 2022 or later.
Choose from a growing market of electric car models
While Tesla is already a strong seller in Australia, new and familiar car brands are making their own moves in the Australian EV market. Of the 1.8% of current electric vehicles sales, Toyota’s hybrid models make up 7.6% of them. Volvo’s Polestar Engineered models arrived in Australia early this year, and other makers – Ford, Kia, and Volkswagen, to name a few – are increasing their manufacturing and committing to going fully or majority electric in the coming decade.
Ford and Rivian have made their own personalised power plays to the Australian consumer by developing the ultimate Aussie EV model – an electric ute. While not yet available here, a renown EV researcher and research fellow at the University of Queensland test drove Ford’s F150 Lightning and Rivian’s R1T ute and R1S electric SUV during a recent trip to the United States and predicted they would “sell like hot cakes”.
We can help you join the movement towards electric vehicles
Fleet Network are industry leaders in novated leasing. We are constantly adapting to the ever-changing industry and have the insights and experience to help you decide on your next car.
While you may be new to electric vehicles, we can help answer all your questions and guide you towards the car of the future. What remains unchanged is the thousands in savings you stand to benefit from novated leasing, plus the convenience and time savings of having all your running costs – servicing, power, tyres, registration, and more – covered in your repayment.
Get a quote today to get started.
