Temporary FBT break lifts plug-in hybrid sales 130%
An industry body warns strong take-up will only continue if the generous tax break remains.
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Generous FBT exemptions on low-emission vehicles are working as intended, an industry body says, with the latest figures showing sales of plug-in hybrids (PHEVs) up 130 per cent in the first half of the year.
Novated leases peak body National Automotive Leasing and Salary Packaging Association (NALSPA) said the tax break was “opening the door” for Australians to choose more eco-friendly vehicles.
“The overwhelming feedback we are getting from our members and their customers is that the FBT exemption is undoubtedly driving Australians across metropolitan and regional locations to get behind the wheel of PHEVs,” chief executive Rohan Martin said.
PHEVs accounted for 17 per cent of all electrified passenger and SUV sales last month, up from 6.6 per cent in June 2023, and made up around 22 per cent of electrified SUV sales for the year to date, up from 10.6 per cent in the first half of 2023.
Regular hybrid vehicle sales were also up 113 per cent, according to data from the Federal Chamber of Automotive Industries.
FBT exemptions were introduced in 2022 for novated car leases of EVs or PHEVs worth below $89,332. It allows taxpayers to deduct the cost of finance and maintenance of an EV from their pre-tax salary.
The exemption on an eligible vehicle valued at $50,000 can save employees up to $9,000 annually.
While the tax break is permanent for EVs, it will no longer apply for PHEVs starting 1 April next year.
Martin said PHEVs were an important low-emissions option for many drivers who were not prepared to make the switch to a fully electric vehicle. “Australians want to reduce their carbon footprint and their vehicle running costs, but for many making the transition to a full EV is not an option that suits their transport, lifestyle or work needs, especially for those living in regional Australia.”
He said PHEV sales would continue surging as long as the FBT exemption remained.
“For many, the FBT exemption makes PHEVs more attractive than their traditional combustion engine equivalent models, especially when reducing emissions is a key consideration.”
“Every PHEV purchased drives down Australia’s total transport emissions and that’s critical for our journey to net zero.”
Christine Chen
05 July 2024
accountantsdaily.com.au
