Hyundai Elexio: Should You Novate It?
The Hyundai Elexio is here to challenge Tesla and BYD. Find out what it means for Australian PAYG employees considering a novated lease on a new EV.
A new contender has entered the Australian EV market. The Hyundai Elexio is Hyundai's latest electric SUV, and a recent review by The Driven puts it head-to-head with Tesla and BYD — asking whether a Korean brand manufacturing in China can genuinely compete with the established EV players.
That's an interesting question. But if you're an Australian PAYG employee looking at your next car, there's a more practical question worth asking first: does the Elexio qualify for the FBT exemption on novated leases, and does it make sense to run one through your salary?
What this means for novated lease customers
Under the current FBT exemption for eligible zero or low-emission vehicles, battery electric vehicles priced below the luxury car tax threshold can be packaged through a novated lease without attracting fringe benefits tax. This is the same exemption that made the Tesla Model 3, BYD Atto 3, and a handful of other EVs genuinely compelling salary-packaging options for employees on decent incomes.
If the Hyundai Elexio is priced below the LCT threshold (which sits at $91,387 for fuel-efficient vehicles in 2025–26), it would likely qualify — meaning you could potentially cover the car's purchase price, registration, insurance, and running costs from your pre-tax salary. That's the core appeal of novated leasing for EVs, and it doesn't change just because there's a new model on the market.
What does change is your choice. The Elexio entering the mix gives employees a credible alternative to BYD and Tesla — brands that, fairly or not, carry baggage for some buyers. Hyundai has a stronger dealer and service network across most of regional and suburban Australia, which is a real-world consideration when you're locked into a three-to-five year lease.
Common questions
Will the Hyundai Elexio qualify for the novated lease FBT exemption?
Most likely yes, provided it is a battery electric vehicle and its list price sits below the luxury car tax threshold for fuel-efficient vehicles. Final confirmation depends on the Elexio's official Australian pricing, which should be checked against ATO guidance when it is released.
How does the Elexio compare to the BYD Atto 3 or Tesla Model 3 for novated leasing purposes?
From a pure tax-structure standpoint, any eligible EV is treated the same under the FBT exemption — the brand doesn't change the tax outcome. The differences that matter are purchase price, residual value, running costs, and how those numbers interact with your salary and lease term.
Does 'made in China' affect the novated lease or FBT treatment?
No. The ATO's FBT exemption is based on the vehicle's emissions classification and price, not its country of manufacture. A vehicle assembled in China by a Korean brand is treated identically to one assembled elsewhere, assuming it meets the eligibility criteria.
What salary do I need to benefit from novating an EV like the Elexio?
Novated leasing works by reducing your taxable income, so the benefit scales with your marginal tax rate. Generally, the higher your income, the more potential savings you can access — but employees across a range of income levels can benefit. Use millarX's calculator or speak to an adviser to model your specific situation.
Is now a good time to lock in an EV novated lease given policy uncertainty?
The FBT exemption for eligible EVs is legislated through to at least 1 April 2027 for BEVs. Anyone entering a lease before that date should check the current policy position with their adviser, as lease terms can extend beyond the confirmed exemption window.