A new report tracking rising electric vehicle (EV) uptake and falling emissions in new light vehicles underscores the ongoing importance of the EV FBT exemption, according to the National Automotive Leasing and Salary Packaging Association (NALSPA).
The National Transport Commission’s latest report found that light vehicle emissions reductions achieved in 2023 and 2024 are among the strongest in 20 years, driven by growing demand for hybrid and electric vehicles.
The report shows battery electric vehicles (BEVs) made up 13 percent of new registrations in 2024, with the vast majority (around 94 percent) entering the fleet since 2021, aligning with the introduction of the EV FBT exemption in 2022.
“The rise in EV uptake and fall in Australia’s vehicle emissions go hand in hand with the introduction of the EV FBT exemption,” NALSPA chief executive Rohan Martin said.
“The EV tax cut is making the upfront cost of electric vehicles more affordable for everyday Australians. Many workers including teachers and nurses say they wouldn’t have switched without the help of the FBT exemption.
“Our data shows families in the outer metropolitan suburbs are embracing the EV tax cut the most. Running-cost savings from EVs are most valuable in the outer suburbs, where residents face long commutes and higher fuel bills.
“Despite the progress in decarbonising Australia’s fleet, only about 2 percent is electrified. Australia continues to lag international markets, with the average new passenger vehicle emitting around 35 percent more CO₂ than European equivalents, and EV penetration remaining below global leaders. Encouraging the switch to more fuel-efficient vehicles through novated leasing and the EV FBT tax cut is key to reducing emissions and meeting our national targets.
“Novated leasing delivers emissions gains disproportionate to its share of the market, helping more people to purchase newer more efficient vehicles more frequently, supporting faster turnover into cleaner models.”
Independent modelling by Magenta Advisory this year found expanding the EV tax cut for a decade could halve vehicle emissions compared with ending the policy earlier, whilst tripling value for money through health, environmental and economic benefits.
“Every $1 spent on the EV Discount has delivered more than $2 in environmental, economic and health benefits - and that return is expected to rise to $3 by 2030,” Mr Martin said.
“Keeping the EV tax cut in place means more new EVs on Australian roads and more affordable second-hand EVs available too. Around the world, successful and strong EV uptake always pairs buyer incentives with supply measures until key benchmarks are hit, proving that sustained government support is vital to keeping EV consideration and uptake moving.”
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