This week, the spotlight was on electric vehicles (EVs) in Canberra as the Commonwealth Parliamentary Friends of Electric Vehicles (EVs) met to discuss the challenges and opportunities in Australia’s EV transition. Co-hosted by the National Automotive Leasing and Salary Packaging Association (NALSPA) with the Electric Vehicle Council and the Federal Chamber of Automotive Industries, the gathering at Parliament House showcased some of Australia’s latest and affordable Battery EV (BEV) and Plug-In Hybrid EV (PHEV) models. With ongoing policy support and new initiatives on the horizon, stakeholders believe that a sustainable, low-emissions future is achievable.
As NALSPA CEO Rohan Martin highlighted, policy mechanisms like the Fringe Benefits Tax (FBT) exemption on low and zero-emissions vehicles have been pivotal in reducing the cost of ownership for everyday Australians, enabling many to switch to cleaner, energy-efficient options. “Owning and operating a car is one of the biggest expenses for families,” Martin noted, “so it’s encouraging to see electric vehicles becoming increasingly affordable and available for more everyday Australians”.
The Rise of Novated Leasing in EV Ownership
One of the key factors driving EV adoption is novated leasing, which has proven to be an effective route for Australians to access EVs. NALSPA estimates that over 40% of BEVs and PHEVs in Australia are now purchased through novated leasing, up from less than 2% in 2022. This rapid growth demonstrates that tax benefits, combined with lower emissions and operating costs, make a compelling case for consumers.
Martin pointed out that Australians living in outer suburbs, such as Werribee in Victoria and Kellyville in New South Wales, are leading the way in EV adoption. He remarked, “Australians in the outer suburbs and regional areas are embracing EVs, with plug-in hybrids experiencing a notable rise in sales – importantly, with the assistance of government policy. PHEVs act as an essential bridge to full electric driving.” With novated leasing options helping Australians reduce their income tax while enjoying budget-friendly EVs, the trend seems set to continue.
Plug-In Hybrids as a Transitional Solution
Despite the increasing popularity of BEVs, PHEVs are viewed as an essential stepping stone toward full electrification, especially for drivers with concerns over range, charging infrastructure, and availability of larger vehicle types.
“While BEV model availability and charging infrastructure is improving, plug-in hybrids provide a practical solution for motorists who are concerned about driving range or want a larger car that’s not yet available in pure EV form,” Martin explained.
He stressed that amidst rising living costs, sustained government support for both BEVs and PHEVs is essential for maintaining affordability while supporting Australia’s emissions goals.
Federal Chamber of Automotive Industries CEO Tony Weber echoed these sentiments, underscoring the need for balanced policy to aid the transition to a low-emissions future. He noted that policies like the FBT exemption for BEVs and PHEVs have been crucial in making EVs more accessible to Australians, especially amid cost-of-living pressures. “Extending the FBT exemption for PHEVs to align with BEVs will help more Australians reduce their transport emissions and assist with vehicle operating costs while critical recharging infrastructure catches up to consumer needs,” Weber said.
Bridging the Infrastructure Gap
While EV sales are steadily increasing, inadequate charging infrastructure remains a significant obstacle. Dr. Monique Ryan, Independent Federal Member for Kooyong and co-chair of the Parliamentary Friends of Electric Vehicles, highlighted the need for urgent improvements. “We have to improve charging facilities nationally as a matter of urgency,” she said. Recognising the essential role of charging networks, Dr. Ryan also stressed the importance of integrating EVs into broader transport and energy policies. With advancements in home energy systems, she envisions a future where EVs can serve as household batteries, providing additional benefits beyond transport.
In a similar vein, Electric Vehicle Council CEO Samantha Johnson called for greater public education on EV benefits, saying,
“It’s clear that early adopters have embraced EVs, and now there is a need to educate and inspire more drivers to discover the superior performance, reduced ownership costs, and environmental benefits provided by electric vehicles of all shapes and sizes”.
Ongoing Policy Support Remains Essential
As the Australian government prepares to introduce the New Vehicle Efficiency Standard in 2025, NALSPA is urging policymakers to consider extending incentives such as the FBT exemption on PHEVs beyond its current end date of 1 April 2025.
Martin emphasised the importance of such measures, stating, “Particularly amidst a cost-of-living crisis, ongoing government support to encourage PHEVs supply and take-up along with BEVs is critical to maintain affordability for cleaner versions of the types of vehicles Australians want to drive while advancing the nation’s emissions reduction goals. Without such support, our race to reduce transport emissions will be slowed”.
This push for continued policy support aligns with NALSPA’s focus on dispelling misconceptions about EVs and raising awareness of their benefits. The organisation advocates that more education is needed to help Australians understand the practical and environmental advantages of EVs. With rural and regional employees increasingly opting for EVs, particularly PHEVs, the shift to cleaner transport is becoming more inclusive across the country.
The Road Ahead
The momentum from this week’s meeting of the Commonwealth Parliamentary Friends of Electric Vehicles underscores the collaborative efforts among industry stakeholders to accelerate EV adoption in Australia. For Martin and other industry leaders, the message is clear: by extending government incentives, investing in charging infrastructure, and educating motorists, Australia can ensure a successful transition to a low-emissions future.
As Dr. Ryan put it, “The future is very positive, but there’s still a lot of policy work to do.” With this foundation, the hope is that more Australians will not only make the switch to EVs but also find them seamlessly integrated into their lives, contributing to a cleaner and more sustainable Australia.
