Big news. But no big changes in the short term.
The Electric Car Discount review is now live and, importantly, the core benefits remain in place for now. If you've been thinking about getting into an EV, this update brings more clarity than concern.
What is the Electric Car Discount?
The Electric Car Discount is what has made EVs so attractive for many employees under a novated lease.
It allows eligible electric vehicles to be exempt from Fringe Benefits Tax (FBT). That's a big deal because FBT can be a significant cost.
Without FBT, EVs have become significantly more affordable through salary packaging.
The 2026 Update: What's Actually Changed
There has been a lot of noise around this review. Here's the simple version of what's been announced:
- No change to the current Electric Car Discount until April 2027
- From April 2027:
- EVs under $75,000 keep the full exemption
- EVs above $75,000 move to a 25% FBT concession
- From April 2029, all eligible EVs move to a 25% FBT concession
These changes confirm that the policy is being gradually adjusted, not removed, following the government's review of its long-term sustainability. The full details will be confirmed when the final legislation is approved by the Senate.
Why This Update Is Positive
At first glance, "winding back" a benefit sounds negative. But in reality, this is a measured change that keeps the benefit in place while giving you clarity moving forward.
There is now a clear window to act
Nothing changes until April 2027. This gives you time to plan with confidence, without worrying about sudden policy changes or losing access to the current benefits.
The benefit is not being removed
The Electric Car Discount isn't disappearing. Instead, it is being gradually reduced over time, which allows the market to adjust while still supporting EV adoption.
Most popular EVs remain eligible
Keeping the full exemption for vehicles under $75,000 means many of the most popular EVs on the market will continue to qualify under the current rules.
Potential tax savings are still expected long term
Even after the exemption ends in 2027, a 25% FBT concession is still expected to apply. This continues to provide a meaningful tax advantage compared to petrol or diesel vehicles.
The Timing Advantage
This is where things become important.
Lease agreements are typically grandfathered based on when they start. That means, if you enter a lease under current rules, you may retain those benefits for the life of the lease (subject to the final terms of the legislation).
With no changes expected until 2027, there is now a clear opportunity to plan ahead and take advantage of the current settings.
Which EVs Still Qualify?
Right now, there are plenty of EVs that fall within the eligible threshold.
You can explore the full list here.
This includes a growing range of:
- Affordable entry-level EVs
- Mid-range family SUVs
- Popular models from brands like Tesla, BYD, Kia and Hyundai
What to Keep in Mind
While the update is positive overall, there are a couple of key things to be aware of:
- These changes are still subject to being passed in the Senate
- More detail is expected in upcoming budget announcements
- Existing leases are expected to remain unaffected by future changes, but this remains subject to confirmation
Ready to Explore Your Options?
If you've been considering an EV, this update gives clarity on the availability of FBT benefits.
There's no immediate pressure but there is now a defined window to take advantage of current benefits.
If you want to see what an EV could look like under a novated lease, the best place to start is with a quick quote.
Important Information: Information is general in nature and does not constitute financial or other professional advice, which you should obtain. It has been prepared without taking into account your objectives, financial situation or needs. Any references to government announcements, reviews or proposed changes are based on information available at the time of publication and may change (including through the legislative process). Outcomes may differ depending on the final law and any guidance issued by relevant authorities.
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