EVs Just Hit a Record 20% Share of Australian Car Sales
EV sales claimed a record 20% of new car sales in May 2026. Here's what that shift means if you're considering a novated lease. Read more.
Something shifted in May 2026. Electric vehicles grabbed one in five new car sales in Australia — a record 20% market share — according to data reported by The Driven (Source 1). Leading the charge were the Tesla Model Y, BYD Sealion 7, Jaecoo J5, and Geely EX5. At the same time, diesel utes — long the backbone of Australia's new car market — slumped noticeably.
This isn't a blip. It's a market that's been building momentum for the past two years, and May's numbers suggest the tipping point is closer than most people expected.
What this means for novated lease customers
The timing matters if you're weighing up a novated lease right now. More EVs in the market means more choice, more competition between brands, and — generally — more pressure on drive-away pricing. That's good news for buyers.
It's also a reminder that the FBT exemption on eligible EVs is still in play for PAYG employees. Under current legislation, zero or low-emission vehicles under the luxury car tax threshold can be packaged through a novated lease with no fringe benefits tax applied to the private use component — a genuine structural advantage that doesn't exist for petrol or diesel vehicles. The arrival of more affordable models from BYD, Jaecoo, and Geely means the exemption is now accessible at price points that weren't available twelve months ago.
If you've been sitting on the fence waiting for the right model at the right price, the May sales data suggests that moment is arriving. The question is whether the FBT exemption stays intact long enough for you to take advantage of it — nothing in tax policy is permanent.
Common questions
Does the FBT exemption apply to BYD, Jaecoo, and Geely EVs?
Eligibility depends on the vehicle's value, emissions profile, and when it was first held or used. Most pure battery electric vehicles under the luxury car tax threshold for fuel-efficient vehicles currently qualify, but you should confirm the specific model and variant with a licensed adviser before signing anything.
Does higher EV market share change how novated leasing works?
Not structurally — the lease mechanics are the same regardless of market share. But broader adoption means more residual value data, which can influence the balloon payment estimates lenders use when structuring your lease.
Are cheaper Chinese EVs like Jaecoo and Geely good candidates for novated leasing?
Potentially yes, especially if they clear the FBT exemption threshold. Lower purchase prices can mean lower lease payments and a smaller residual risk. The trade-off to think about is long-term resale value, which is still less predictable for newer brands with limited local history.
What happens to my novated lease if the FBT exemption is removed?
If the exemption were wound back, the tax benefit on your EV lease would reduce — but the salary packaging structure itself would remain. The impact depends on when and how any policy change was legislated, and whether existing leases were grandfathered.
Should I rush into an EV novated lease because of this data?
No. The right time to lease is when the vehicle, the term, and the numbers make sense for your situation — not because of a monthly sales report. Use the data as context, not a trigger.