Motorists living in commuter outer suburbs are among the biggest embracers of the Federal Government’s discount for electric and plug-in hybrid vehicles, according to the latest data from the National Automotive Leasing and Salary Packaging Association (NALSPA).
New NALSPA figures show the outer suburbs in NSW, including Kellyville, Riverstone, and Baulkham Hills, rank within the top ten postcodes for the highest uptake of novated leases for battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) in Australia, since the Federal Government introduced its EV discount. Below are the Top 10 NSW postcodes for EV sales:
| Rank | Postcode | Some suburbs within postcodes |
| 1 | 2155 | Kellyville, Rouse Hill, Beaumont Hill |
| 2 | 2765 | Marsden Park, Riverstone, Oakville |
| 3 | 2153 | Baulkham Hills, Bella Vista, Winston Hills |
| 4 | 2154 | Castle Hill |
| 5 | 2075 | St Ives |
| 6 | 2250 | Gosford, Wyoming |
| 7 | 2066 | Lane Cove, Riverview, Northwood |
| 8 | 2762 | Schofields |
| 9 | 2065 | St Leonards, Crows Nest |
| 10 | 2068 | Castlecrag, Willoughby |
By March 2024, BEV/PHEV sales represented almost 10 per cent of sales in the new car passenger/SUV/light commercial segment according to VFACTs. This is seen as an upshot of the Federal Government’s EV fringe benefit tax (FBT) exemption introduced from July 2022. NALSPA estimates that some 40 per cent or more of all new BEVs and PHEVs are now being purchased via a novated lease with the help of the FBT discount for employers.
This policy is doing what it was designed to do: help more everyday Australians consider and make their next car electric. Customers are telling NALSPA members that the savings from the electric car discount are pivotal in getting them to make the switch. Once customers have a salary-packaged EV, they’re making further savings through GST-free benefits and a lower taxable income.
For a $67,000 Tesla Model 3, the discount can mean that the cost per week over a typical five-year lease is the same as an equivalent sized petrol car costing around $40,000, even though the Tesla’s driveaway price is over $25,000 more than the equivalent petrol vehicle.
Alternatively, a novated lease holder buying a $52,000 BYD Atto3 could save around $6,300 a year compared with buying an equivalent sized $59,000 petrol SUV. NALSPA chief executive Rohan Martin said the discount is helping more everyday Australians go electric when they otherwise wouldn’t have.
“As the cost of living continues to bite, everyday working Australians are taking advantage of the significant savings discount on electric and plug-in hybrid vehicles through salary packaging.
Everyday workers living in the suburbs are noticing more than ever before that buying an EV is not only within reach thanks to government incentives but also makes financial sense for them. The further you are from the city centre, the more reliant you are on your car. It makes sense that so many outer suburban motorists are now switching to electric – be that BEV or PHEV – they’re saving thousands on running costs by doing away with rising petrol prices, and the car price itself through the EV discount,” explained Mr. Martin.
To get the most from your charge you can now choose a more fuel or energy efficient route on Google Maps in Australia, thanks to Google’s AI. Simply specify your vehicle’s engine type – petrol, diesel, hybrid, or EV – and let Maps get to work, optimising your route to save the most fuel or energy. Over the coming weeks, for users in Sydney and Melbourne, you’ll start seeing a public transport or a walking suggestion next to driving routes if travel times are comparable and practical.
Calculating electricity costs for FBT purposes
The Australian Tax Office (ATO) have released a new Practical Compliance Guideline that will help employers calculate electricity costs for FBT purposes, when an electric vehicle is charged at an employee’s home. Here’s the details you need to know:
- The EV home charging rate is 4.20 cents per kilometre.
- This applies to zero emissions electric cars only, while plug-in hybrid models are excluded.
- To apply the guideline, employees need to have incurred an electricity expense when charging the electric vehicle at home.
- You can use this rate for FBT reporting going back to 1 April 2022.
- You can still choose to calculate the electricity value by determining the actual cost incurred instead of relying on the guideline.
- You will need to keep the relevant records to support your calculations.
- It’s important to be aware of your FBT obligations, and how this guideline may apply to you. Contact your tax professional to help you with your tax obligations
“Having a simple guideline in the form of a shortcut method to claim home charging costs on EVs provides clarity and an additional incentive for motorists who are looking to make the switch from petrol or diesel cars.
“As EV uptake has surged, more taxpayers have been faced with the compliance challenge of determining their charging costs. Until now, it’s been difficult if not impossible for most motorists to easily delineate home charging costs for an EV on their home electricity bills.
“The ATO shortcut method is particularly helpful where the home charging station does not have the ability to segregate the EV charging station’s electricity consumption from the household’s other electricity usage. Thankfully, the ATO’s compliance guideline has cleared this up, allowing EV motorists to have confidence in their claims and reap the benefits at tax time.
“We note however that the practical guidance issued by the ATO on EV charging does not include PHEVs. We are encouraged that the ATO is continuing to work on a potential shortcut method for charging costs associated with PHEVs and we trust that this can be resolved in the near future,” commented Mr. Martin on the details of the ATO guideline.
Individual taxpayers can include their EV’s electricity costs as a tax deduction in their personal income tax return for any proportion incurred in gaining or producing their assessable income, provided they are using the log book method and they own or lease the car in their own name (and it is not salary packaged ie a novated lease). An individual taxpayer can use either the above method or they can maintain receipts for their actual expenditure on electricity.
PHEVs will be no longer be exempt under FBT laws:
From 1 April 2025, a plug-in hybrid electric vehicle will not be considered a zero or low emissions vehicle under FBT law.
However, you can continue to apply the exemption if both the following requirements are met:
- Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025.
- You have a financially binding commitment to continue providing private use of the vehicle on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding.
Are you considering buying a second-hand EV?
Car auctioneers, Pickles, have seen the vast majority of their current EV supply volume coming via Fleet, Government, Rental, and Corporate customers. Pickles believe it will be at least two years before the full effect of the EVs acquired by consumers via the novated leasing on the back of the Federal Government’s FBT exemption scheme for zero and low emission vehicles will be seen on their auction floors.
“This is a sign of the early adopters among Pickles Fleet, Government, Rental, and Corporate customers reaching lease maturity,” according to Pickles General Manager, Motor Vehicles, Brendon Green.
Mr. Green projects the volume of sales will now steadily climb through the year to reach 30-40 EVs per month by the end of 2024. Between Q1 2023 to Q1 2024 just 142 EVs were sold by Pickles with an average sale price of $42,747 compared to $25,286 for internal combustion engine (ICE) vehicles, which accounted for more than 70,000 sales through Pickles during the same period.
EVs from brands like Hyundai, MG, BYD, Audi, Nissan and Lexus are starting to arrive at Pickles alongside the volume-trailblazing Tesla. This expansion of model availability includes a variety of new brands and lower prices from new, which is in turn lowering the average sold price.
In addition to a higher average sold price, EVs also continue to be short cycled relative to ICE vehicles, reaching Pickles at half the age (2.9 years compared to 5.5 years) and one third the kilometres travelled on average 33,117kms compared to 106,518kms. Beyond this appeal, these vehicles also represent a cheaper entry point for EV-curious consumers. This contributes to a significantly higher proportion of used EVs being purchased by private consumers through Pickles than ICE, with 47 per cent of EV buyers being end users, compared to 24 per cent for ICE vehicles.
“There’s a huge number of Australians who want to adopt EVs, but they don’t have the budget to buy new, or undertake a novated lease regardless of FBT exemption. But they may well have $20,000-$40,000 to spend on a used EV from Pickles,” said Mr Green.
Pickles is investing heavily in growing this confidence further by developing a VIN-specific battery health assurance process to address state-of-health concerns. Key information desired by used buyers is actual measurement of battery degradation for the vehicle being considered, previous charging behaviour (ie, proportion of previous charges being via fast charging), and a revised range calculation in kilometres based on these elements. This testing phase will span vehicles supplied to Pickles in most major capital cities, and has been underway since October 2023 and is expected to continue for a further six months before the consumer product is ready to be launched.
Mr. Green offers one early positive snippet from the testing process: “What we are seeing initially is that batteries don’t appear to be degrading as fast as what the general public is fearing.”
For more information about Pickles’ upcoming EV auctions, visit their website www.pickles.com.au
Photographs by Driven Women Magazine.