Australia’s commuter suburbs lead rush to EVs as novated leases deliver cost parity

The federal government’s 2022 Electric Car Discount policy has been a boon for EV uptake in Australia’s outer commuter suburbs, according to new figures from the National Automotive Leasing and Salary Packaging Association (NALSPA).

Figures published Monday by NALSPA revealed that outer suburbs such as Werribee and Tarneit in Victoria, and Kellyville, Riverstone, and Baulkham Hills in New South Wales, rank within the top ten postcodes for the highest uptake of novated leases for battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs).

The introduction of the Electric Car Discount – a fringe benefit tax (FBT) exemption introduced into law in late-2022 – has had a notable impact on the uptake of EVs through novated leases.

According to the association, the market share of battery and plug in hybrids in the novated lease market has jumped from three per cent in 2022 to 14 per cent in March this year.

It says the tax benefit means that a $67,000 Tesla Model 3 can be leased over a five year period for the same cost as a $40,000 petrol car, even  though the Tesla’s driveaway price is over $25,000 more than the equivalent petrol vehicle.

Alternatively, a novated lease holder buying a $52,000 BYD Atto3 could save around $6,300 a year compared with buying an equivalent sized $59,000 petrol SUV.

Top 10 postcodes for BEV/PHEVs via novated leases

Source: NALSPA for the period 1 July 22 – 31 December 2023 inclusive; * equal seventh;

“As the cost of living continues to bite, everyday working Australians are taking advantage of the significant savings discount on electric and plug-in hybrid vehicles through salary packaging,” said Rohan Martin, NALSPA chief executive.

“Everyday workers living in the suburbs are noticing more than ever before that buying an EV is not only within reach thanks to government incentives but also makes financial sense for them.

“The further you are from the city centre, the more reliant you are on your car. It makes sense that so many outer suburban motorists are now switching to electric – be that BEV or PHEV – they’re saving thousands on running costs by doing away with rising petrol prices, and the car price itself through the EV discount.

“This policy is doing what it was designed to do: help more everyday Australians consider and make their next car electric. Customers are telling our members that the savings from the electric car discount are pivotal in getting them to make the switch. Once customers have a salary-packaged EV, they’re making further savings through GST-free benefits and a lower taxable income.

NALSPA’s figures also demonstrate the way in which plug-in hybrid EVs are serving as a bridge – or simply the more affordable option available.

“Both electric and plug-in hybrids are performing strongly in the outer suburbs, and they are also appealing to those families residing in regional Australia,” said Martin.