Denza, Zeekr and the Luxury EV Battle Heating Up in Australia
Chinese EV brands are targeting Lexus territory. Here's what the growing luxury EV competition means if you're considering a novated lease. Read on.
The electric vehicle market is getting genuinely interesting at the premium end. According to a recent EVcentral report [Source 1], brands like Denza and Zeekr are directly targeting Lexus buyers — and the argument is straightforward: EVs gave Chinese manufacturers a level playing field that petrol engines never did.
For years, Japanese and European legacy brands had decades of drivetrain refinement as a moat. That moat is a lot shallower when every car runs on a battery and a software stack. Denza and Zeekr are arriving in or approaching the Australian market with competitive specs, competitive pricing, and a clear ambition to own the premium segment that Lexus has quietly held for a long time.
What this means for novated lease customers
If you're an Australian PAYG employee shopping for a premium EV on a novated lease, this competitive pressure is actually good news. More credible luxury EV options entering the market means more choice — and choice tends to keep pricing honest.
Critically, many fully battery-electric vehicles currently qualify for the FBT exemption introduced under the Treasury Laws Amendment (Electric Car Discount) Act, which removes fringe benefits tax on eligible low-emission vehicles provided through a novated lease. That exemption applies regardless of whether your EV is a Lexus, a Zeekr, or a Denza — what matters is the vehicle meeting the eligibility criteria (BEV or FHEV, under the luxury car tax threshold for fuel-efficient vehicles). More brands competing in this space means the exemption-eligible pool of vehicles is growing.
The practical upshot: if you've been eyeing a premium EV but felt the options were limited, keep watching. The segment is moving fast, and a novated lease remains one of the most tax-effective ways for PAYG employees to get into one of these vehicles — with potential savings coming from both the FBT exemption and pre-tax salary packaging of running costs.
Common questions
Are Chinese EV brands like Zeekr and Denza eligible for the novated lease FBT exemption?
Eligibility depends on the vehicle type (must be a BEV, PHEV, or FHEV) and the price sitting under the relevant luxury car tax threshold for fuel-efficient vehicles — not the brand's country of origin. If a Zeekr or Denza model meets those criteria, it would qualify the same way a Lexus or Tesla would.
Does more competition in the luxury EV market actually affect what I pay on a novated lease?
Indirectly, yes. Greater competition tends to compress vehicle prices over time, which can reduce the capitalised cost in your lease and therefore lower your repayments. It also expands the range of FBT-exempt vehicles you can choose from.
Should I wait for Denza or Zeekr before signing a novated lease?
That depends on your timeline and current vehicle situation. If you're already running a car that's costing you money, waiting purely on the hope of a new brand arriving has a real cost. Talk to us about what's available and eligible right now.
What is the luxury car tax threshold and does it affect my EV novated lease?
The ATO sets a separate, higher LCT threshold for fuel-efficient vehicles each financial year. If your chosen EV is priced above that threshold, FBT exemption eligibility may be affected. Your millarX consultant can confirm the current figure and whether your shortlisted vehicle sits within it.