Financially stretched Australian households will have another year to access the full benefits of the Electric Car Discount, with the Albanese Government confirming in the federal budget that it will keep the policy in place before phased changes begin from April 2027.
The decision has been welcomed by the National Automotive Leasing and Salary Packaging Association (NALSPA), which says the policy is helping more Australians use novated leasing to move into lower-cost electric vehicles.
The Electric Car Discount removes fringe benefits tax from eligible electric vehicles provided through salary packaging arrangements, lowering the cost of monthly repayments for many employees. For households dealing with higher living costs and volatile petrol prices, NALSPA says the policy is becoming an important cost-of-living measure rather than just an environmental incentive.
NALSPA CEO Rohan Martin said the budget provides certainty for households and the automotive market.
“Australians looking to save money on driving are huge winners in this federal budget,” Rohan Martin, CEO at NALSPA, said.
“The Albanese Government’s commitment to the Electric Car Discount means more Australians can afford to switch to cheaper-to-run cars and avoid pain at the bowser.
“The Electric Car Discount is good for the country – cutting emissions, reducing our reliance on foreign-owned oil and future-proofing our energy security.
“The government has got the balance right on the Electric Car Discount with relief for households, certainty for the market, and fiscal responsibility for the budget.”
For Fleet Managers, Sustainability Managers and Finance Managers, the budget confirms that electric vehicles will remain attractive in salary packaging programs for another year. This is particularly relevant for organisations reviewing employee benefits, Scope 3 emissions, staff retention, and the role of novated leasing in reducing transport-related emissions.
While many organisations are still developing formal fleet transition plans, the continuation of the discount gives employers more time to educate employees, assess vehicle options, and build internal policies around EV suitability, home charging, reimbursement, and whole-of-life cost.
Martin said the budget outcome also reflects public support for EV affordability measures.
“This budget reflects what Australians want – there is overwhelming support for the government to continue providing financial help for EVs,” Rohan Martin, CEO at NALSPA, said.
“Polling shows most Australians who bought an EV with the Electric Car Discount wouldn’t have without it, particularly cost-conscious households, blue-collar workers and outer-suburban families.
“With certainty about the Electric Car Discount, the high cost of living, and volatile fuel prices, there has never been a better time to go electric through novated leasing.
“NALSPA will continue advocating for the FBT framework and salary packaging to be used to their full potential to deliver real cost-of-living relief for working families.”
The latest Electric Car Discount take-up data also shows strong demand in growth suburbs and outer metropolitan areas, supporting NALSPA’s argument that the policy is reaching cost-conscious households.
The top 10 postcodes for Electric Car Discount take-up in Q1 2026 were led by Tarneit in Victoria, followed by Point Cook in Victoria, Marsden Park in New South Wales, Kellyville in New South Wales, and Duffy in the ACT. Other leading suburbs included Success in Western Australia, Springfield Lakes in Queensland, Craigieburn in Victoria, Kenmore in Queensland, and Eatons Hill in Queensland.
For employers, the budget provides another reason to review whether their fleet and salary packaging policies are keeping pace with EV demand. The vehicles may be chosen by employees, but the outcomes can contribute to broader organisational goals around emissions reduction, employee benefits and lower transport costs.
The next stage will be important for the market. With the full discount continuing for another year before phased changes begin from April 2027, Fleet Managers and Finance Managers have a clear window to assess how EV novated leasing fits into workforce benefits and broader fleet transition planning.
