What is the FBT Exemption and how does it reduce the cost of an EV?

The fringe benefits tax exemption introduced last year removed the tax for EVs under $89,332 (luxury car tax threshold for fuel-efficient vehicles), which makes EVs more affordable and attractive for fleets and eligible individuals. This policy helps reduce the cost of an EV to be at parity with an equivalent petrol or diesel car and is already generating significant demand for EVs in the near term. 

This incentives reduces the cost of paying for an eligible EV and covering car running costs through a novated lease by thousands of dollars per year. EVs and PHEVs valued up to the luxury car tax threshold ($89,332 in FY 2023/24) are eligible for the FBT exemption. However, the exemption for PHEVs is due to expire on 1 April 2025.

You can find out more about the FBT exemption, and eligible vehicles here.