Electric Vehicle (EV) Novated Lease

An electric vehicle (EV) runs partially or fully on electricity rather than liquid fuels, as per the Electric Vehicle Council’s definition.

There are many different types of EVs, and the most common type being battery electric vehicles (BEV) which operate solely from electricity charged through batteries and not petrol. BEVs are the easiest to differentiate among EV models as they don’t have an exhaust pipe.

Another type of common EV is a plug-in hybrid vehicle (PHEV). Plug-in hybrid cars primarily use an electric motor but can switch to a petrol-fuelled engine if and when the electric battery runs out of power. They have a stronger electric capacity than hybrid electric vehicles (HEV). Like PHEVs, HEVs have a dual electric-petrol engine capability but their smaller electric battery gives them a much more limited capacity to run on electricity before needing to switch to petrol.

Introduced by the Australian Government in response to the growing push for cleaner, greener transportation, the The Electric Car Discount policy, which was passed by Parliament in December 2022. exempts certain zero to low emissions cars made available by employers to their employees from the Fringe Benefits Tax (FBT).

The removal of the FBT effectively makes EVs available to salary sacrifice with a novated lease, which was not an option prior to the policy coming into effect.

The policy aims to boost the adoption of electric vehicles (EVs) in Australia while encouraging car manufacturers to offer more affordable electric car models.

The policy also included an investment by the Government to boost electric vehicle charging infrastructure right across Australia.

In short: yes, they are! There are certain criteria EVs must meet for them to be exempt from the FBT.

The policy applies to battery electric vehicles and plug-in hybrid electric vehicles. PHEVs will not be eligible from April 1, 2025 as they will no longer be considered a zero or low emission vehicle under the FBT law.

Non-luxury battery electric and plug-in hybrid models are eligible, up to a maximum purchase cost of $84,916. The vehicle must first be registered after July 1, 2022.

Electric vehicles and internal combustion engines have the same setup and management of their lease. The main difference is claiming power versus petrol or diesel. If a driver’s vehicle is eligible under the Electric Vehicle Discount, then additional tax savings will be applicable.

Owning and running an EV is significantly cheaper than a petrol-powered car.

Electric vehicles require a lot less servicing than their petrol counterparts. Electric engines have fewer moving parts and are simpler by design, requiring next to no maintenance. Brakes and suspension systems should be checked every 2 years, and replacement of battery cooling fluid should be done every 5 to 6 years.

The savings in servicing are already factored into dealership price packages. For example, BMW’s EV model, the iX3, costs $1,650 to service over the first 6 years of ownership, whereas BMW’s petrol models servicing packages start from $2,010 for only 5 years.

You’ll also save significantly by powering your vehicle with electricity over fuel. On average, an electric car uses 12 to 25 kWh per 100 km and Australians pay 25 to 30 per-kilowatt hour of electricity at home. If you’re charging a large, SUV EV model with intense acceleration capability, that will cost you around $7.50 in electricity charges to power your car for 100 km.

If you choose a smaller, more efficient EV model, you could see your powering costs reduced to less than $4 per 100 km. Using home solar and charging with free public chargers will save you even more.

Based on those estimates, you could save $10,000 in petrol costs (or more if fuel prices continue to rise) over 5 years or 75,000 kms of driving.

All your running costs such as insurance, registration and servicing, are covered as it would be on a novated lease with a petrol car where they are included in your repayments.

You can claim electricity as part of your running costs. You must be able to demonstrate how much electricity has been used on your EV and at what cost. This can be done easily by purchasing an at-home fast charger or a separate smart meter installed at home.

Absolutely. Thanks to the Electric Car Discount, current or aspiring electric vehicle drivers can now enjoy the benefits of novated leasing previously unavailable to them. If you have been interested in getting an electric vehicle but held off due to the cost, you now have an affordable option to own an EV with a novated lease.

By novated leasing an electric car, you don’t have to pay GST on the upfront price of your vehicle and bundle all your running costs such as charging, insurance, registration, tyres and servicing, in your repayment. Your repayment is taken from your pre-tax earnings, so you end up with more of your own income and save on tax.

Interested but unsure how to start the novated leasing process? The Fleet Network team will guide you by setting up and managing your lease for a stress-free, easy process. Contact our team to get started with a quote that is tailored to you and your circumstances.

Purchasing an electric vehicle through a novated lease is a cost-effective way, compared to any other leasing or financial arrangement. This is due to the Electric Car Discount policy, the upfront tax savings on the purchase price of your vehicle, and the ongoing benefits of running your vehicle throughout the lease. The costs of leasing an electric vehicle with Fleet Network will depend on your own personal employment and financial situation, as well as the EV you wish to lease. To find out the costs of leasing an electric vehicle with Fleet Network, get a quote today.

Yes, you can! Any Tesla can be packaged as a novated lease. Variants of the Tesla Model 3 and Model Y are also eligible for FBT exemption. Contact us for a quote tailored to you.