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Novating a plug-in hybrid electric vehicle

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The shift from traditional combustion engines to zero or low emissions vehicles is firmly underway, with a growing number of Australian drivers embracing the change. Whether your motivation is environmental consciousness or financial savings, there are plenty of reasons to feel positive about making the switch.

A Fleetcare Novated Lease gives you the freedom to select a vehicle of your choice, including a Plug-In Hybrid Electric Vehicle (PHEV). Like a traditional petrol or diesel novated lease, the cost of the vehicle and its operational expenses will be budgeted and deducted from your salary. Through this, you can lower your income tax and enjoy GST savings on various expenses such as the vehicle’s purchase price, servicing, and tyres, among other benefits!

Why go low emission?

1
Versatility
2
Cost savings
3
Environmental benefits
4
Available incentives
Versatility

The versatility of Plug-in Hybrid Electric Vehicles (PHEVs) stems from their seamless transition between electric and fuel-powered modes, catering to various driving needs.

PHEVs operate emission-free in electric mode for short trips, while the fuel engine serves as a backup during longer journeys, eliminating range anxiety.

This adaptability ensures optimal efficiency, making PHEVs suitable for both urban commuting and highway driving, offering drivers a convenient and environmentally-friendly transportation solution.

Cost savings

PHEVs offer significant cost savings by operating in electric mode, especially for short commutes, reducing fuel expenses compared to traditional vehicles.

Moreover, government incentives and PHEV purchases can further offset initial costs, making them a financially attractive option for drivers seeking both economic and environmental benefits.

Environmental benefits

PHEVs significantly reduce emissions compared to traditional vehicles by operating in electric mode, which minimises reliance on fossil fuels and decreases greenhouse gas emissions.

Additionally, integrating renewable energy sources into the charging process further enhances their environmental benefits, supporting global efforts to combat climate change and improve air quality.

Available incentives

The Australian government has implemented various incentives aimed at encouraging the uptake of zero or low emissions vehicles throughout the country. These incentives are in line with several other influences that are encouraging the adoption of EVs in Australia.

For more information, visit our Federal and State based electric vehicle incentive guide.

Plug-in hybrid electric vehicle incentives

Electric Car Discount FBT Exemption

Designed to incentivise the uptake on zero and low-emissions vehicles in Australia and reduce transport emissions, the Electric Car Discount Bill removes import tariffs and Fringe Benefits Tax (FBT) effective from the 1st of July 2022.

The FBT exemption applies to electric vehicles where the following criteria are met:

  • The car is a zero or low-emissions vehicle
  • The first time the car is both held and used is on or after 1 July 2022
  • The car is used by a current employee or their associates (such as family members)
  • Luxury Car Tax (LCT) has never been payable on the importation or sale of the car

Benefits provided under a salary packaging arrangement (including those procured under a novated lease) are included in the exemption.

From 1 April 2025, a plug-in hybrid electric vehicle will not be considered a zero or low emissions vehicle under FBT law.

Check out our Plug-In Hybrid Electric Vehicle FBT Exemption guide to find out more.

Electric Car Discount FBT Exemption

Designed to incentivise the uptake on zero and low-emissions vehicles in Australia and reduce transport emissions, the Electric Car Discount Bill removes import tariffs and Fringe Benefits Tax (FBT) effective from the 1st of July 2022.

The FBT exemption applies to electric vehicles where the following criteria are met:

  • The car is a zero or low-emissions vehicle
  • The first time the car is both held and used is on or after 1 July 2022
  • The car is used by a current employee or their associates (such as family members)
  • Luxury Car Tax (LCT) has never been payable on the importation or sale of the car

Benefits provided under a salary packaging arrangement (including those procured under a novated lease) are included in the exemption.

From 1 April 2025, a plug-in hybrid electric vehicle will not be considered a zero or low emissions vehicle under FBT law.

Check out our Plug-In Hybrid Electric Vehicle FBT Exemption guide to find out more.

PHEV frequently asked questions

What is a zero or low emissions vehicle?

When it comes to choosing a zero or low emissions vehicle, there are a few options to choose from.

  • Plug-in Hybrid Electric Vehicle (PHEV): A plug-in hybrid electric vehicle is powered by both an electric motor and a petrol engine.
  • Electric Vehicle (EV): An electric vehicle runs entirely with an electric motor.
  • Fuel Cell Electric Vehicle (FCEV): A fuel cell electric vehicle is powered by hydrogen fuel cells.
Where can I charge my vehicle?

A PHEV battery can be easily recharged by plugging into an external power supply such as a household socket, home AC wallbox charger, or a public charging station.

If you need to charge your vehicle outside of your home, there are plenty of public charging stations across Australia. The Electric Vehicle Council provides a map listing all current charging stations.

How long does it take to charge a PHEV?

Charging times vary depending on the vehicle’s battery capacity and the power of the charger.

A vehicle battery charging at home, can take anywhere between six to eight hours to fully charge.

Chargers located in commercial premises or road-side locations provide for faster recharging. This type of charger can fully recharge some electric vehicles in 10 to 15 minutes.

You will have plenty of charging options available, as more public charging infrastructure continues to be installed in Australia.

What manufacturers offer plug-in hybrid electric vehicles?

Plug-in hybrid electric vehicles are currently available from the following manufacturers:

  • Mitsubishi
  • MG
  • Ford
  • Cupra Leon
  • Mini
  • Peugeot
  • Mazda
  • Kia
  • Lexus
  • BMW

Benefits of salary packaging your car

Access fleet discounts
Reduce income tax
Smooth your budget
24/7 driver support
Save on GST*
Cashless servicing and repairs

PHEV vs Petrol Novated Lease Savings Comparison

Novated Lease Frequently Asked Questions

Can I novate a plug-in hybrid electric vehicle?

Yes, you can! A Fleetcare Novated Lease gives you the flexibility to choose a hybrid vehicle, an electric vehicle, a petrol vehicle, or a diesel vehicle.

How does a novated lease work with a PHEV?

A novated lease is a salary packaging option that lets you pay for your PHEV and its running costs from your salary.

Am I eligible for a novated lease?

If you are a salaried employee who has successfully finished your probation period at work and your employer is willing to enter into an agreement with us, you qualify.

Is a PHEV procured through a novated lease eligible for the FBT exemption?

A plug-In hybrid electric vehicle procured through a novated lease is eligible for an FBT exemption, so long as it meets the exemption criteria.

The FBT exemption applies to vehicles where the following criteria are met:

  • The car is a zero or low-emissions vehicle
  • The first time the car is both held and used is on or after 1 July 2022
  • The car is used by a current employee or their associates (such as family members)
  • Luxury Car Tax (LCT) has never been payable on the importation or sale of the car

From 1 April 2025, a plug-in hybrid electric vehicle will no longer be considered a zero or low emissions vehicle under FBT law.

However, the exemption will still apply if both the following requirements are met:

  • Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025.
  • You have a financially binding commitment to continue providing private use of the vehicle on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding.

For more information, we've curated a guide to help you understand the plug-in hybrid electric vehicle FBT exemption.

Will a plug-in hybrid electric vehicle procured through a novated lease be eligible for State-based EV Rebates and Incentives?

PHEVs acquired through a novated lease may qualify for state-based EV rebates and incentives, reducing the cost of ownership. We can help identify your eligibility and applicable terms.

How do PHEV running costs compare to a petrol or diesel novated lease?

PHEVs generally boast lower fuel expenses due to their ability to operate on electric power for short distances, alongside reduced maintenance costs attributed to fewer moving parts and regenerative braking systems. Additionally, potential tax incentives and rebates for PHEVs can further drive down costs over the lease term.

Where can I find out more about a novated lease?

To find out more about a novated lease, check out our tools and resources that are listed below:

Want to know more about novating an plug-in hybrid electric vehicle?

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Disclaimer: Income Tax savings are dependent on your taxable income and individual tax status. GST savings take into consideration your employers accounting methods and internal policies around GST, and passing on input tax credits.

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