Battery electric vehicles accounted for more than two-thirds of Smartgroup’s new novated lease vehicle orders during the first half of 2026, highlighting the continued influence of electric vehicle incentives on salary-packaged vehicle demand.
Smartgroup reported that BEV new-vehicle orders increased 162% compared with H1 2025 and represented 68% of all new vehicle orders during the six months to June.
By comparison, internal combustion engine vehicles accounted for 27% of orders and plug-in hybrids represented 5%.
The shift came as ICE new-vehicle orders declined 29% and PHEV orders fell 39%. Smartgroup said the decline in ICE demand had been more than offset by growing demand for BEVs.
EV demand supports leasing growth
The increase in electric vehicle orders occurred alongside broader growth in Smartgroup’s novated leasing portfolio.
New lease vehicle orders increased 34%, total settlements were up 17%, and the number of novated leases under management rose 15% to 91,600.
Smartgroup Managing Director and CEO Scott Wharton said electric vehicle demand contributed to the strong first-half result.
“Market conditions remained favourable during the period, with strong consumer demand for electric vehicles. Some international factors likely accelerated purchasing decisions and contributed to elevated levels of activity during the half.”
Smartgroup also pointed to the Federal Government’s Electric Car Discount as an important factor supporting demand.
The company’s results announcement noted that the Government reaffirmed its commitment to the policy in May 2026, providing greater certainty for consumers and industry participants.
Smartgroup said the policy had supported broader access to electric vehicles by improving affordability and reducing the cost of ownership for eligible Australians.
BEV growth across customer segments
The company’s investor presentation also shows BEV adoption increasing across Hospital and PBI, Education, Government and Corporate customer segments.
The chart presented by Smartgroup shows a sustained increase in the percentage of new-car orders represented by BEVs since 2022, with all four segments reaching their highest levels in H1 2026.
This suggests the growth is not limited to one employer segment, with electric vehicles becoming a larger component of novated leasing orders across a range of workplaces.
Smartgroup has identified “Leadership in Novated Leasing via EVs” as one of its strategic priorities, with the company planning to maintain its EV proposition through digital investment and expansion of its sales channels.
Demand remains robust
Smartgroup said the exceptional level of activity recorded during the first half had moderated, although underlying novated leasing demand remained strong.
Wharton said:
“Looking ahead, we see a supportive environment for continued growth. While we remain mindful of the broader economic conditions and consumer sentiment, demand for novated leasing remains robust, supported by our large eligible employee base, sustained interest in EVs and ongoing awareness of the savings available through salary packaging.”
For Fleet Managers and employers, Smartgroup’s results provide another indication of how quickly the novated leasing vehicle mix is moving towards battery electric models, particularly while the Electric Car Discount remains available.
