Honda Abandons Its EV Target — Should You Care?
Honda posted its first-ever loss and is pivoting hard to hybrids. Here's what that shift means if you're considering a novated lease. Read on.
Honda has made headlines for all the wrong reasons — the Japanese automaker just posted its first-ever annual net loss and has officially walked back its electric vehicle targets. According to a report by The Driven [Source 1], Honda is blaming a combination of US tariff pressure under Trump and fierce competition from Chinese EV manufacturers. The pivot? Double down on hybrids, and dust off the Prelude nameplate.
This is a notable moment. Honda was one of the more aggressive legacy brands on EV commitments. Now it's retreating. Whether that's pragmatism or a strategic misstep depends on who you ask — but for Australian employees thinking about a novated lease, the shift has real, practical implications.
What this means for novated lease customers
The FBT-exempt status of eligible battery electric vehicles under Australian tax law remains in place regardless of what Honda does in Japan. If you were eyeing an EV specifically to take advantage of the FBT exemption for zero-emission vehicles, that pathway hasn't changed — Honda's internal strategy doesn't affect the ATO's treatment of your vehicle.
What does shift is the Honda model mix available on the Australian market. If you were considering a Honda EV, the product pipeline just got murkier. Hybrids, on the other hand, do not qualify for the FBT exemption — plug-in hybrids (PHEVs) that were delivered before 1 April 2025 are the exception under transitional rules, but a standard petrol-electric hybrid like the models Honda is now emphasising won't give you the same tax treatment as a full BEV.
The practical upshot: if a Honda hybrid ends up on your shortlist, you can still novate it — you just won't pocket the same potential savings available on a fully electric vehicle. Run the numbers both ways before you commit. That's what we're here for.
Common questions
Does Honda's EV retreat affect the FBT exemption for electric cars in Australia?
No. The FBT exemption for eligible battery electric vehicles is set by Australian tax law, not by any single manufacturer's product strategy. It remains available on qualifying EVs regardless of what Honda announces.
Can I still novate a Honda hybrid?
Yes — any car can be novated. The difference is that a standard hybrid doesn't qualify for the FBT exemption that makes EVs particularly attractive on a novated lease. You'll still get pre-tax payment benefits, but the overall tax saving is typically smaller.
What about plug-in hybrids (PHEVs) — do they still get any FBT relief?
PHEVs that were first held and used before 1 April 2025 are covered under transitional rules. Vehicles delivered after that date are no longer eligible for the FBT exemption. Check with us on timing if a PHEV is on your radar.
Should I wait and see what happens with Honda's EV lineup before leasing?
That's a reasonable question, but timing the market on manufacturer announcements rarely pays off. If there's an EV available now that suits your needs and budget, the tax benefit is available now — waiting on Honda won't change that.
Is millarX able to arrange novated leases on non-Honda EVs?
Yes — millarX is brand-agnostic. We work across all eligible makes and models, so Honda's pivot doesn't limit your options with us.