The shift toward cleaner light vehicles is accelerating with the National Transport Commission’s latest data showing some of the strongest emissions reductions in two decades.
This momentum, industry bodies say, is directly tied to the Federal EV FBT exemption.
According to the NTC, battery-electric vehicles accounted for 13 per cent of new light-vehicle registrations in 2024, with 94 per cent of all BEVs on the road entering the fleet since 2021.
The timeline aligns with the introduction of the Fringe Benefits Tax exemption for eligible EVs, a policy the National Automotive Leasing and Salary Packaging Association (NALSPA) argues is reshaping purchasing behaviour.
NALSPA CEO, Rohan Martin, said the findings confirm what leasing data has been showing for the past two years.
“The EV tax cut is making the upfront cost of electric vehicles more affordable for everyday Australians,” said Martin.
“Many workers, including teachers and nurses, say they wouldn’t have switched without the FBT exemption.”
Martin noted that uptake is strongest among families in outer-metropolitan areas, where long commutes and high fuel bills make the running-cost savings of EVs particularly compelling.
Despite the growth, Australia’s overall fleet remains only about two per cent electrified which is well behind leading global markets.
The average new Australian passenger vehicle still emits around 35 per cent more CO₂ than its European equivalent. Martin said encouraging adoption through novated leasing and the EV tax cut is essential if Australia is to meet its emissions targets.
He added that novated leasing continues to “punch above its weight”, driving turnover into newer, cleaner vehicles more frequently.
Independent modelling by Magenta Advisory suggests extending the EV tax cut for a decade could halve light-vehicle emissions compared with ending the policy earlier, while tripling value for money through health, environmental and economic benefits. Their analysis shows every dollar spent on the EV Discount currently returns more than $2 in benefits—a figure projected to reach $3 by 2030.
“Keeping the EV tax cut in place means more new EVs on Australian roads and more affordable second-hand EVs flowing into the market,” said Martin.
“Global experience proves that sustained incentives remain critical until key adoption thresholds are reached, and Australia is nowhere near them yet.”
In other news IKEA has expanded its EV infrastructure.
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