Everything you must know about electric vehicles in Australia

Everything you must know about electric vehicles in Australia

You have been thinking about it, and now you’ve made up your mind. Your next vehicle will be electric. It makes sense, after all: you don’t have to choose between saving money and saving the environment anymore. Thanks to significant incentives created by recent federal legislation, you can now have both.

Most Australians seem to agree with you. Increasingly more and more people are making the switch, and the Australian Electric Vehicles market is projected to grow 22.64% by 2027.

With rampant inflation and rising fuel prices, most people are looking at new ways to save, and with electric cars, they’re onto something. Recent research by Climateworks Centre shows that Australian drivers could save $20 billion by 2030 by switching to electric cars

Subsequently, the Australian Government has now removed fringe benefits tax (FBT) on eligible electric cars (EVs). With the recently introduced law, EVs with an RRP under $84,916 are exempt from the 47% fringe benefits tax if provided through a novated lease. This could save you $4,700 per year on average compared to an Internal Combustion Engine vehicle.

So if you want to understand more about electric vehicles and get ready to drive your first one, you’ve come to the right place.In this guide, we’ll answer some of the most frequent questions around EVs in Australia, across four main areas: Getting familiar with EVs, electric vehicles in Australia, how to afford an electric vehicle in Australia, and electric vehicles novated leasing.

Getting familiar with EVs

What is an electric vehicle? 

Electric vehicles (EVs) are cars or other vehicles that are fully or partially powered by motors that run on electricity rather than liquid fuels.

There are currently four main types of EVs: fully electric or Battery Electric Vehicles (BEVs), Plug-in Hybrid Electric Vehicles (PHEVs), Hybrid Electric Vehicles (HEVs) and Fuel Cell Electric Vehicles (FCEVs).

What are the differences between BEVs, PHEVs, HEVs and FCEVs?

Battery Electric Vehicles (BEVs) are fully-electric cars, meaning they do not have a petrol, diesel or LPG engine, fuel tank or exhaust pipe. BEVs are also known as ‘plug-in’ EVs because they use an external electrical charging outlet to charge their batteries. Since they don’t produce any harmful emissions, they are classified as ZEVs (Zero Emission Vehicles).

Plug-in Hybrid Electric Vehicles (PHEVs) are powered by both electricity and liquid fuel. They are plugged in to charge the battery and use a liquid fuel engine when the electricity is depleted. PHEVs are also called LEVs (Low Emission Vehicles) since their exhaust emissions are lower than similar liquid vehicles.

Hybrid Electric Vehicles (HEVs) recharge their batteries without plugging in. They use regenerative braking to convert kinetic energy into electricity and recharge the battery. Hybrids are also classified as LEVs.

Fuel Cell Electric Vehicles (FCEVs) use hydrogen and oxygen to generate electricity through a chemical reaction in a fuel cell. FCEVs provide a greater range than batteries or supercapacitors, which power BEVs. Since they only emit water vapour and warm air, they are also considered ZEVs (Zero Emission Vehicles).

Why should I buy an EV?

There are several benefits when switching to an EV:

  • Lower fuel costs with fuel savings up to 70%. An average car travelling 13,700 km per year, could save $1000 in fuel, or $1200 if the EV can charge overnight on an off-peak tariff.
  • Reduced maintenance costs with savings around 40%. Electric cars have fewer moving parts than petrol or diesel cars. They don’t have expensive exhaust systems, radiators and other parts that are common to petrol or diesel cars and therefore require relatively little servicing.
  • Incentives. Each Australian state and territory offers tailored rebates and incentives on EVs (keep reading to find out more about them). 
  • Less taxes with novated leasing. The Australian Government has removed fringe benefits tax (FBT) on eligible electric cars and include these benefits in the calculation of an employee’s reportable fringe benefits amount. BEVs are exempt from the 47% fringe benefits tax if provided through a novated lease which could save you $4,700 per year, based off a $50,000 model.
  • Lower carbon footprint. In 2019, transport accounted for 19% of Australia’s emissions. It is the country’s third largest source of emissions. A study found that electric vehicles emit, on average, 29-41% less emissions than a typical fossil-fuelled car for every kilometre driven.
  • Reduced air pollution and health benefits. Unburned hydrocarbons, carbon monoxide, nitrogen oxides, and particulate matter are all recognised carcinogens that are released from the tailpipes of conventional cars. In the Sydney-Newcastle-Wollongong region only, traditional vehicles cost the health care system $3 billion annually.
  • Faster acceleration than internal combustion engine cars. With no gears to shift, EVs apply full power as soon as you push on the accelerator.
  • Better handling than traditional cars. Instead of having the battery in the front or back of the car, many EVs have it underneath. This results in a lower centre of gravity and improved handling.
  • Improved driving experience. When driving at low speeds, EVs produce very little noise, which makes for a more enjoyable drive.

Electric vehicles in Australia

Are electric cars popular in Australia?

Australian new electric car sales were up by 65% in 2022, although adoption is still far behind that of other nations. Electric cars currently account for 3.39% of all new car sales in Australia. However, these numbers are insignificant when compared to those of other countries like the UK, where one in five new cars is electric.

Why? Because carmakers are opting to send stock to faster-growing markets with clear fuel efficiency standards or clear plans to phase out sales of petrol vehicles. 

As more incentives and tax breaks are introduced, and more charging stations are added to the infrastructure (their number has nearly doubled between August 2020 and January 2022), we should see a rapid uptake in EV adoption Australia-wide. 

What electric cars are available in Australia?

At the time of writing, there are 36 fully electric models from 18 different car makers available in the Australian market.Here is a good snapshot of every electric vehicle on sale in Australia right now. It is broken down by price, listing the most affordable variant in each model’s range. Otherwise, you can find out more about the PHEVs and HEVs models available in Australia here and check out our comprehensive guide to which EVs and PHEVs are eligible for government incentives.

 

How much are electric vehicles in Australia?

Prices for fully-electric cars go from $44,381, for the BYD Atto 3, to $345,800 for the Porsche Taycan Turbo S. When it comes to plug-in hybrids, prices range from $48,690 drive-away, for the MG HS Plus EV, to $957,700, for a Ferrari SF90 Spider (not for everyone we know, but what a beauty!)

If prices feel too high for you, keep reading. In the next section, we’ll take you through the current incentives for electric vehicles at both state and national level which can make ownership much more accessible. We’ll also show you viable alternatives to purchasing EVs and hybrids you might not have thought of. With the introduction of no Fringe Benefit Tax (FBT) tax for eligible electric vehicles and plug-in hybrids* through a novated lease arrangement, these vehicles are more accessible than ever. Talk to one of our team about leasing an EV.

How to afford an electric vehicle in Australia 

What are the Australian incentives for electric vehicles?

Federal government incentives. 

At the National level, the Government has removed the Fringe Benefits Tax (FBT) on eligible electric cars provided by employers to current employees through a novated lease. 

The exemption will apply to vehicles with a RRP under $84,916 in 2022-23. Eligible electric cars that are held and used on, or after, 1 July 2022 may also qualify retrospectively for the FBT exemption. The FBT exemption can also apply to second-hand electric cars.

Additionally, the government declared it will eliminate the 5% customs charge on electric, plug-in hybrid, and hydrogen fuel-cell cars and trucks whose customs value is below the gas-saving luxury car tax level. With the exception of vehicles imported from Russia and Belarus, this rule will apply to vehicles admitted for domestic use beginning on July 1, 2022.

State and territories incentives.

Each state has identified different ways to incentivise the adoption of EVs. Here is a summary, broken down by state, from the Australian Electric Vehicle Council:

 

AUSTRALIAN CAPITAL TERRITORY

Financial incentives:

  • Two years of free registration for new or used ZEVs.
  • Residents of the ACT can apply for a $15,000 interest-free loan to assist with the purchase of a ZEV.
  • ZEVs that are purchased for the first time are eligible for a full stamp duty exemption.

Behaviour incentives:

  • Preferential lane access exists for ZEV drivers in transit / high-occupancy vehicle lanes.

NEW SOUTH WALES

Financial incentives:

  • $3,000 rebates for the first 25,000 eligible EVs sold. The rebate cannot be used for vehicles procured under a novated leasing arrangement.
  • Stamp duty will be phased out on eligible EVs.

Business incentives:

  • $105 million via a competitive reverse tender auction process to assist private businesses, not-for-profits and local councils to transition their fleets.
  • The NSW EV Fleets Incentive includes a fixed amount of $400 per vehicle for BEV smart base charging at business premises or employees’ homes. This funding is limited to subsidising the purchase price for smart chargers only.
  • Stamp duty exemption on eligible EVs applies to both public and private fleets.

Behaviour incentives:

  • BEVs and FCEVs have access to T2 and T3 transit lanes until at least 31 October 2022.

NORTHERN TERRITORY

Financial incentives:

  • Registration fees are waived for EVs for five years.
  • Reduced stamp duty for EVs by $1,500 for five years.

Business incentive:

  • Registration and stamp duty incentives are available to fleets.

Behaviour incentives:

  • Nominated EV parking (for charging) is available in public car parks.

QUEENSLAND

Financial incentives:

  • $3,000 incentive for 15,000 cars under $58,000.
  • EVs are registered in the lowest fee segment (min. saving approx. $70).

SOUTH AUSTRALIA

Financial incentives:

  • $3,000 subsidy for 7,000 new BEV sales under $68,750.
  • 3-Year Registration Fee exemption for new BEVs until 1 July 2025. 

TASMANIA

Financial incentives:

  • Stamp duty waiver for two years for the purchase of new or used battery electric or fuel cell vehicles.
  • Two-year waiver on registration fees for EVs bought by hire car companies and tour companies. 

VICTORIA

Financial incentives:

  • $3,000 subsidy paid at point of sale for first 4,000 ZEVs sold under the current $68,740 threshold.
  • 20,000 subsidies in total with more details to be announced in future.
  • 1x subsidy available for an individual and 2x subsidies for a business.
  • Zero and Low Emission Vehicles receive a $100 concession on annual registration fees.

Business incentives:

  • EV Charging for Council Fleets and EV Charging for Business Fleets Programs.
  • The two fleet programs will provide up to $1.5 million each in grant funding for EV fleet infrastructure proposed by any of Victoria’s 79 local governments and businesses that are commercial-for-profit, not-for-profit, or community-based.
  • Fleets are eligible to apply for the ZEV subsidy twice.
  • The Commercial Sector Innovation fund (total $5 million) provides grants to applicants to pilot and/or trial zero-emission technology and accelerate business readiness for broader uptake. Applications can include purchase incentives, trials, charging at fleet depots and other proposals up to $2 million. 

What electric vehicles qualify for subsidies?

Sometimes it’s hard to keep up with the technicalities and changes in legislation. That’s why we’ve put together a handy list of the Top 10 EVs and PHVs you should check out.

Are there alternatives to buying electric vehicles? 

The short answer is yes! A cost-effective option to make the move to electric is novated leasing. The incentives to be introduced at the federal level will only apply to vehicles provided through novated leasing. 

All the fuel and maintenance savings we’ve talked about in the first section of the article get amplified with a novated lease. 

You can also bundle your finance and running costs into your before-tax pay to save on the car purchase price, income tax and GST. 

Have you discussed with your HR or People & Culture department the opportunity to support their staff with Novated Leasing programs? Flare can discuss the benefits of novated leases with your employer for you. Just give us a call, and we’ll do the rest. 

Electric vehicles novated leasing

Why choose a Flare novated lease for your EV?

A way to finance a new or used electric car, a novated lease allows you to pay for all your finance and running costs from your pre- and post-tax salary. On top of saving you up to thousands per year on tax, it also bundles all your vehicle expenses into one simple payment, coming directly out of your pay. 

In November of 2022, the federal government introduced a law that makes EVs priced under $84,916 exempt from fringe benefits tax (FBT). This is a game changer for employees looking to make the switch. With a Flare novated lease, you can reap the benefits of the new FBT exemption law and get access to a full-service concierge, and the opportunity to design a tailored lease program that fits with the way you work and live.

 

What do I need to consider before leasing an EV?

  1. Driving range. This is the most crucial factor when looking for an electric vehicle. Your charging infrastructure, how frequently you drive, and the length of your journey may all be used to calculate your average driving range.
  2. Charging. How long does the vehicle take to recharge? Where will you plug in? The Electric Vehicle Council has created an interactive EV Charger Map with all the charger stations across Australia.
  3. Engine type. BEVs, PHEVs, HEVs and FCEVs… which one is right for you? When making this decision you want to consider the driving range, the way you drive and the sizing of the car you need.
  4. Test drive. Once you’ve got your eyes on an EV model, take it for a drive to make sure it’s the right one for you. While electric vehicles drive like normal cars, there are some minor differences you want to get familiar with. Our team can organise a no-obligation, hassle-free test drive for you. 

If it sounds all a bit too overwhelming, just ask a Flare expert. They’ll do the heavy lifting for you, from helping you find the right electric vehicle, down to signing and managing the lease.

Driving the change by switching to an EV is possible. You’ve also learnt how all the intrinsic advantages of electric vehicles compound with the benefits of novated leasing. 

But did you know that with a Flare EV Novated Lease you get:

  • The car you want, now. You don’t need a deposit just a refundable order fee, plus our team will help you source your new car and organise a test drive.
  • The best pricing. Benefit from Flare’s buying power and save yourself the hard work. Our car experts negotiate on your behalf and secure the best EV and hybrid deals for you.
  • Save on tax and running costs. Enjoy significant tax savings and less GST on your car purchase, electricity mileage, servicing and maintenance.
  • Easy budget management. Avoid hidden expenses and spread your bills throughout the year by bundling up your finance and running costs like electricity mileage, servicing, maintenance and rego into one convenient monthly payment.

It doesn’t end here. Head to this page to find out how you can save with an EV Novated Lease, and hear from employees like you why they chose Flare.

There you have it!

As promised, we’ve helped you make sense of the schemes and incentives available in Australia and shown you some electric vehicles eligible for a discount.

The good news is that the $84,916 federal government FBT exemption cap is higher than all states’ price ceilings. This not only expands the pool of EVs eligible for a discount, but gives you yet another benefit when choosing novated leasing for your EV.

Do you still have questions? Or maybe you’d like help sourcing your new car, negotiating the price and organising a test drive? You might also love to have the support of a car expert who negotiates on your behalf and secures the best EV deals for you. And while you’re at it, why not enjoy significant tax savings and no GST on your car purchase, electricity mileage, servicing and maintenance?

You’ll get all of this and more when you sign up to an EV Novated Leasing with Flare. 

Want to find out more? Just ask a Flare expert

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