Australia Has Its First EV-Majority Car Market — What It Means for Novated Leasing
One Australian region now sells more EVs than petrol and diesel cars combined. Here's what that shift signals for PAYG employees considering a novated lease.
There's a suburb — or region — in Australia that industry watchers have quietly nicknamed 'Little Norway'. And as of mid-2025, it's crossed a threshold most analysts didn't expect this decade: plug-in electric vehicles now outsell fossil-fuelled cars there. According to reporting by The Driven [Source 1], EV adoption in this pocket of Australia has normalised to the point where switching to electric is no longer seen as a risky leap into unproven technology.
The article also notes something interesting: the share of PHEVs (plug-in hybrids) in the mix is actually falling — a sign that buyers are skipping the halfway house and going straight to full battery-electric. That's a meaningful data point, not just a feel-good headline.
What this means for novated lease customers
If you're a PAYG employee sitting on the fence about whether an EV is 'ready for everyday life', this is useful real-world evidence. One Australian community has already answered the question — and the answer is yes.
For novated leasing specifically, the timing matters. The federal government's FBT exemption for eligible battery-electric and plug-in hybrid vehicles (subject to legislated conditions and vehicle price caps) remains in place, and is a core reason why EVs have become the most-requested vehicle type on novated leases right now. Structuring an EV through a novated lease means your repayments, running costs, and charging can be bundled and paid from pre-tax salary — which can meaningfully reduce the real out-of-pocket cost compared with buying the same car outright or on a standard car loan. We don't quote specific savings figures here because they vary by income and vehicle — use the millarX calculator for a number that's actually relevant to you.
What the 'Little Norway' story tells us is that the residual value risk and lifestyle risk that used to make people hesitant about EVs are shrinking fast. That removes one of the last genuine objections to going electric on a novated lease.
Common questions
Does the FBT exemption apply to both full EVs and PHEVs?
Currently the FBT exemption applies to eligible battery-electric vehicles and plug-in hybrid vehicles, subject to conditions including a vehicle cost cap. PHEVs have a legislated phase-out from the exemption — check the ATO's current guidance or speak to us before signing anything, because the rules have moved around.
If EV resale values are improving, does that affect my novated lease residual?
Potentially yes. Residual values in novated leases are set at the start of the lease based on ATO minimum residual guidelines. If market resale values hold up better than the residual, you may have options at end-of-term — but this isn't guaranteed and depends on the specific vehicle and market at the time.
I'm not in that region — does this news change anything for me practically?
Not overnight, but it's a leading indicator. Charging infrastructure, model availability, and community confidence in EVs tend to spread from early-adopter pockets outward. It also signals that manufacturers will keep prioritising the Australian market with EV supply.
Should I get a PHEV or a full BEV on a novated lease?
That depends on your driving patterns, home charging setup, and how long you plan to hold the vehicle. The 'Little Norway' data suggests full BEV adoption is accelerating as range anxiety fades — but PHEVs still qualify (for now) for the FBT exemption and suit some use cases. We'll help you model both.
Is millarX regulated?
Yes. millarX holds Australian Credit Licence 569484, is a member of AFCA and the FBAA, and holds customer funds in segregated accounts.