EVs Just Outsold Diesel and Hybrids in Australia — Here's What It Means for Your Novated Lease
June 2026 data shows EVs outselling both diesel and hybrids for the first time ever. What the record new-car market means for novated lease buyers. Read on.
Something shifted in June 2026. For the first time in Australian automotive history, electric vehicles outsold both diesel and hybrid cars in a single month — and the overall new-car market hit an all-time record at the same time. According to EVcentral AU [Source 1], Tesla and BYD are leading the charge, with demand showing no sign of slowing.
That's not a blip. That's a structural shift in how Australians are buying cars. And if you're a PAYG employee thinking about your next vehicle, it's worth paying attention — because the way EVs are taxed under a novated lease is genuinely different to any other purchase method.
What this means for novated lease customers
The FBT exemption for eligible battery electric vehicles (introduced under the Treasury Laws Amendment (Electric Car Discount) Act 2022) means that qualifying EVs under the luxury car tax threshold can be packaged through a novated lease with no fringe benefits tax applied. That's the core reason demand for EV novated leases has surged alongside general EV sales — it's not hype, it's a straightforward tax structure that PAYG employees can access.
The record June sales figures suggest more employers are comfortable with the arrangement, more employees understand it, and more vehicle options — including BYD models entering the market — are now within reach at competitive price points. More supply and more employer familiarity typically means faster approvals and more negotiating power for buyers.
That said, not every EV qualifies. The FBT exemption applies to cars first held and used on or after 1 July 2022, and only up to the luxury car tax threshold. The rules matter, and they can change — so it's worth getting the detail right before you sign anything.
Common questions
Does the FBT exemption apply to BYD vehicles?
Many BYD battery electric models are priced below the luxury car tax threshold and meet the eligibility criteria for the FBT exemption — but you need to confirm the specific model and drive-away price before assuming. Talk to a licensed novated lease provider to verify before committing.
Does it apply to Tesla models?
Some Tesla variants sit below the LCT threshold and qualify; others — particularly higher-spec Model S and Model X variants — do not. The Model 3 and base Model Y are the ones most commonly structured through novated leases under the exemption.
Why does a novated lease work better for EVs than just buying one outright?
Under a novated lease, your employer makes lease payments from your pre-tax salary. For eligible EVs, no FBT is applied on top of that — meaning you're potentially reducing your taxable income without the usual FBT cost that applies to petrol or diesel cars. Buying outright gives you none of that.
Does the record sales month mean vehicle availability is improving?
Generally yes — record sales volumes tend to reflect improved stock levels after the supply constraints of 2022–2024. More stock on the ground often means shorter wait times and slightly more room to negotiate on price.
Is the FBT exemption permanent?
No. It was legislated but remains subject to future government review. The current exemption has no fixed end date as at mid-2026, but it's not guaranteed indefinitely — which is one reason many employees are moving now rather than waiting.