Honda Abandons Its EV Target — Should You Care as a Novated Lease Customer?
Honda posted its first-ever loss and scrapped its EV goals. Here's what that shift toward hybrids actually means if you're considering a novated lease. Read on.
Honda has recorded its first-ever annual net loss and, in the same breath, walked away from its previous electric vehicle targets. According to The Driven, the company is blaming a combination of Trump-era trade policy and intensifying competition from Chinese EV manufacturers. The strategic response? Lean hard into hybrids and bring back the Prelude as a hybrid model.
This isn't a small pivot. It signals that one of the world's largest automakers no longer believes it can compete in the pure-EV space on its original timeline. For Australian PAYG employees looking at novated leases, that has real implications — not catastrophic ones, but worth understanding before you commit to a vehicle.
What this means for novated lease customers
The FBT exemption for eligible battery electric vehicles remains in place under current Australian tax law — Honda's strategic retreat doesn't change that. What it does change is the practical vehicle landscape. If you were waiting on a Honda EV to arrive in Australia, that timeline is now genuinely uncertain.
Hybrids are a different story under the tax rules. Plug-in hybrids (PHEVs) that meet the government's eligibility criteria can still qualify for the FBT exemption, but standard self-charging hybrids — the kind Honda is doubling down on — do not. That's a meaningful distinction. A new Prelude hybrid, for example, would likely be treated as a conventional vehicle for FBT purposes, meaning you'd use the standard statutory formula rather than a full exemption.
The broader point: the global EV slowdown at the manufacturer level doesn't shrink the potential tax savings available on eligible EVs through a novated lease. If anything, it makes it worth acting while the exemption exists and while supply of qualifying vehicles from other brands remains reasonable. The policy could change; manufacturer strategies definitely will.
Common questions
Does Honda's EV pullback affect the Australian FBT exemption for electric vehicles?
No. The FBT exemption is set by Australian tax law, not by any individual manufacturer's strategy. Honda's decision doesn't alter what's available to you — it just narrows Honda's own EV lineup in the short term.
Are Honda hybrids eligible for the FBT exemption on a novated lease?
Standard self-charging hybrids are not eligible for the FBT exemption — only battery electric vehicles and qualifying plug-in hybrids are covered. Always confirm a specific model's eligibility before signing anything.
Should I wait for Honda's new hybrid models before taking out a novated lease?
That depends on your situation. If you're holding out for a Honda EV, the timeline is now murky. If a hybrid suits your driving, it can still be novated — you just won't get the FBT exemption benefit that a qualifying EV would provide.
What happens to my novated lease if my chosen EV brand changes strategy mid-lease?
Your lease is tied to the vehicle you drive, not the manufacturer's corporate strategy. Resale value shifts are worth monitoring, but the lease structure itself doesn't change because a carmaker pivots.
Is the EV FBT exemption under threat given global EV headwinds?
That's a legitimate question and we won't pretend otherwise. The exemption is a policy choice, not a permanent fixture. It's worth keeping an eye on budget announcements — but as of now, it remains in place.