With the Australian Government’s new National Electric Vehicle Strategy, a new era for Electric Vehicles (EVs) and Novated Leasing has begun in Australia. The legislation aims to promote EV adoption and encourage car manufacturers to import more affordable electric models to path the way for an electric future.
Switching from petrol and diesel vehicles to electric vehicles offers numerous advantages for Australia. These include lower carbon emissions, better air quality, enhanced energy security, economic prospects, and long-term savings. Electric vehicle adoption in Australia has been slower compared to the global trend. Factors contributing to this include limited infrastructure, availability, and higher initial costs. In contrast, Norway has emerged as a global leader in EV adoption, with over half of their new vehicle sales being electric in 2020. This discrepancy can be attributed to Norway’s robust government incentives, extensive charging infrastructure, and supportive environmental policies.
In 2022 EVs accounted for 3.8% of new vehicles sold in Australia. The Australian Government’s answer to re-charging the EV appetite is the National Electric Vehicle Strategy. As part of this strategy, the Electric Car Discount exempts EVs priced below the luxury car threshold of $84,916 from Fringe Benefits Tax (FBT).
FBT is a tax applied to a non-cash benefit supplied from an employer to an employee. When you salary package a vehicle via a Novated Lease it is deemed a fringe benefit under taxation law, making you liable for FBT. With the Electric Car Discount now in place, the cost of purchasing and running electric vehicles has become more economical than ever. With these new government incentives the CSIRO projects that Australia’s car fleet could be fully electric by 2050, which would mean meeting the government’s net zero emissions target by 2050. Since our establishment in 2007, Simplygreen has been dedicated to offering eco-friendly salary packaging and novated leasing solutions. We are committed to supporting our clients on their EV journey.
While all of these economic and environmental benefits sound great, what are the actual cost savings? The FBT exemption makes EVs the most budget friendly choice across all price points. Previously, a Tesla Model 3 would set you back around $1,350 per month (inclusive of all running costs like registration and insurance). With the introduction of the Electric Car Discount, an EV leased through Simplygreen (inclusive of finance payments and running costs) is reduced to $750 per month. For a bit of perspective, that is around the same cost as a $29,000 petrol vehicle, inclusive of running costs. It’s the ultimate way to purchase a car.
Three reasons to consider an electric vehicle for your next car
Save thousands on income tax
Zero or low emission vehicles that fall below the luxury car threshold are now exempt from Fringe Benefits Tax (FBT). Estimates indicate that there could be income tax savings of between $4000 – $10,000 each year for individuals that purchase an EV under a novated lease. Novated leasing also allows individuals to pay for 100% of the vehicle operating costs (eg. registration and insurance) using pre-tax dollars, increasing the tax savings even further.
Save the planet
Electric vehicles emit fewer greenhouse gasses (CO2) and other pollutants. A reduction in these emissions benefits the planet as well as creating improved health outcomes. The uptake of Electric Vehicles propels Australia to meeting its net zero emissions target by 2050, balancing the greenhouse emissions produced and taken out of the atmosphere.
Save on running costs with a smoother drive
The cost to power an EV is significantly less that current petrol and diesel vehicles. Battery regeneration recovers energy when driving downhill, combined with a efficient drive train EVs can be significantly more economical to drive. EVs also don’t require engines, gearboxes, spark plugs, motor oil and exhaust systems, meaning they’re more reliable to drive, with a smoother, quieter experience.
Content for this sponsored article provided by Simplygreen