EVs Just Hit 20% of Australian Car Sales — Here's Why That Matters
Electric vehicles topped 20% market share in Australia, with Tesla Model Y the best-selling car. Find out what this means for your novated lease options.
Australia's EV market just crossed a milestone that would have seemed far-fetched a few years ago. According to The Driven, electric vehicles hit more than 20 per cent market share in the latest month of data, with the Tesla Model Y claiming the title of Australia's best-selling vehicle outright — not just among EVs, but across every car sold [Source 1].
That's not a niche trend anymore. One in five new cars sold in Australia is now electric. If you've been sitting on the fence about whether EVs are a 'real' option, the market has quietly answered that question for you.
What this means for novated lease customers
The timing matters for anyone considering a novated lease. Under current federal policy, eligible EVs priced below the luxury car tax threshold remain exempt from fringe benefits tax (FBT). That exemption is what makes the financial case for leasing an EV through your employer so compelling — you're effectively paying for a car with pre-tax salary, and without the usual FBT liability that applies to petrol vehicles.
As more Australians choose EVs and supply improves — evidenced by the Model Y now outselling every other car in the country — the practical barriers (availability, wait times, price premiums) are shrinking. A broader model range and stronger dealer competition tends to flow through to better novated lease residuals and more competitive pricing over time.
If you're a PAYG employee and your employer offers salary packaging, an EV on a novated lease is worth modelling seriously. The potential savings on income tax, GST, and running costs stack up — but the numbers depend on your salary, the vehicle, and your personal circumstances, so it's worth getting a proper quote rather than relying on back-of-envelope estimates.
Common questions
Does the FBT exemption apply to all EVs?
No. The exemption applies to eligible zero or low-emission vehicles — primarily battery electric vehicles (BEVs) and hydrogen fuel cell vehicles — that fall below the luxury car tax threshold. Plug-in hybrids that were not already under a novated lease arrangement before 1 April 2025 are no longer covered. Check the ATO's current guidance or ask millarX directly before assuming a specific model qualifies.
Is the Tesla Model Y a good novated lease choice?
It's one of the most commonly leased EVs through millarX, and strong residual values plus wide service availability make it a practical option. That said, 'best-selling' doesn't automatically mean 'best for your situation' — your salary, km estimate, and whether you need a specific variant all affect the numbers.
Can I novated-lease an EV if my employer hasn't done it before?
Yes, in most cases. millarX works with employers to set up novated leasing arrangements — your employer doesn't need an existing program. We handle the paperwork; you just need their sign-off.
Will the FBT exemption last?
It's legislated federal policy, but tax concessions can change with future budgets or government decisions. There's no announced end date as of mid-2026, but it's a real risk worth factoring into a longer lease term. millarX can walk you through what a scenario without the exemption would look like.
What does 20% EV market share mean for resale values?
Higher volume generally supports more predictable resale pricing and better liquidity in the used market — both of which feed into the residual value assumptions in a novated lease. It's a positive signal, though residuals are set by the finance company and will vary by model.