Norway's Cars Are Almost All Electric. Australia Is Watching.
Norway hit 97.8% EV sales in May 2026. What does that tell us about where Australia's EV market — and novated leasing — is headed? Read on.
Norway just posted a 97.8% EV share for new passenger car sales in May 2026, with the first five months of the year averaging 98%, according to The Driven. Tesla led the charge, ahead of Toyota and VW. That's not a rounding error — that's a combustion engine market that has effectively ceased to exist.
Norway didn't get there by accident. Years of deliberate tax policy — removing purchase taxes and GST on EVs, cheap road tolls, free parking — made EVs the obvious financial choice for ordinary buyers. Sound familiar? Australia's FBT exemption for eligible EVs under the novated lease rules is a direct policy cousin of that playbook.
What this means for novated lease customers
Norway's experience is the clearest real-world evidence that when the financial case for EVs is made concrete — not just ideological — buyers switch fast. In Australia, the FBT exemption on eligible battery electric vehicles (BEVs) and plug-in hybrids (PHEVs) under a novated lease is currently the most direct equivalent mechanism available to PAYG employees.
The policy isn't permanent — it's subject to ongoing government review — so the window matters. What Norway shows is that once price parity and policy align, adoption doesn't inch forward, it accelerates hard. Australians who are already considering an EV through a novated lease are effectively acting on that same logic now, before the market catches up and before policy settings potentially change.
It also has a practical implication for resale values and model availability. As global manufacturers follow the demand signal — Norway included — the range of EV models available in Australia keeps growing, which means more choice for employees structuring a novated lease.
Common questions
Does Norway's EV market have any direct impact on Australian policy?
Not directly, but policymakers and Treasury watch comparable markets closely. Norway is frequently cited in Australian EV policy debates as a proof point for what tax incentives can achieve at scale.
Is the FBT exemption for EVs still available in Australia?
As of the time of writing, eligible BEVs and PHEVs under the luxury car threshold can still access the FBT exemption via a novated lease. Policy settings can change, so it's worth getting a current quote rather than assuming the rules will stay the same.
Which EVs are eligible for the FBT exemption in a novated lease?
Broadly, battery electric vehicles and plug-in hybrids that were first held and used on or after 1 July 2022, and sit below the luxury car tax threshold, can be eligible. The ATO rules govern this — your novated lease provider should confirm eligibility for a specific vehicle before you sign anything.
If Norway is at 98%, why is Australia still well below 20% EV share?
Multiple factors: later model availability, fewer charging infrastructure investments, higher upfront EV prices relative to income, and a policy environment that only introduced meaningful EV incentives from mid-2022. The gap is closing, but Australia started later.
Does millarX only do EV novated leases?
No — millarX structures novated leases for both EVs and internal combustion engine vehicles. The FBT exemption makes EVs particularly compelling right now, but the calculation depends on your individual situation.