PHEVs – General
What is a PHEV?
PHEV stands for ‘Plug-in Hybrid Electric Vehicle’ and is an electric vehicle that has both an internal-combustion engine (ICE) that uses petrol, and a battery-powered electric motor. This battery-powered motor is the main power source for the car, while the ICE is on standby as an emergency back-up for when your battery starts to run low.
Please note: From 1 April 2025, a plug-in hybrid electric vehicle is no longer considered a zero or low emissions vehicle under FBT law. However, your employer can continue to apply the exemption if both the following requirements are met: 1) Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025. 2) You have a financially binding commitment to continue using the vehicle for private use on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding. To qualify for the EV discount, plug-in hybrid electric vehicles must have been delivered by midnight on 31 March 2025. Due to high demand and stock limitations there may be some vehicles that do not meet the delivery deadline for the EV Discount. Customers are advised to confirm delivery timelines before proceeding with their order.
What does a “financially binding commitment” mean?
A financially binding commitment needs to be in place by 1 April 2025 for the exemption to apply.
This means that:
- a customer / employee has ordered and received a car by way of a novated lease arrangement, and
- there is a financial penalty if the order is cancelled.
In practice, this means that the vehicle has been delivered and available for use and a signed lease agreement is in place – prior to 1 April 2025.
Please note: From 1 April 2025, a plug-in hybrid electric vehicle is no longer considered a zero or low emissions vehicle under FBT law. However, your employer can continue to apply the exemption if both the following requirements are met: 1) Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025. 2) You have a financially binding commitment to continue using the vehicle for private use on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding. To qualify for the EV discount, plug-in hybrid electric vehicles must have been delivered by midnight on 31 March 2025. Due to high demand and stock limitations there may be some vehicles that do not meet the delivery deadline for the EV Discount. Customers are advised to confirm delivery timelines before proceeding with their order.
Will the FBT exemption continue to apply for existing PHEV leases?
All existing PHEV leases will be honoured provided there are no breaks in the commitment to the use of the PHEV, such as change in employment or unpaid leave. More information on “breaks” below.
Please note: From 1 April 2025, a plug-in hybrid electric vehicle is no longer considered a zero or low emissions vehicle under FBT law. However, your employer can continue to apply the exemption if both the following requirements are met: 1) Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025. 2) You have a financially binding commitment to continue using the vehicle for private use on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding. To qualify for the EV discount, plug-in hybrid electric vehicles must have been delivered by midnight on 31 March 2025. Due to high demand and stock limitations there may be some vehicles that do not meet the delivery deadline for the EV Discount. Customers are advised to confirm delivery timelines before proceeding with their order.
What happens if I change employer? Will the exemption apply if I carry the lease over to my new employer?
If a customer moves employer, the change of employer will trigger a new commitment and a loss of the FBT exemption. This is because the ATO view a change of employer as a new commitment to the availability of the car by the new employer. This applies to a change of a new employer even within the same group of companies.
Please note: From 1 April 2025, a plug-in hybrid electric vehicle is no longer considered a zero or low emissions vehicle under FBT law. However, your employer can continue to apply the exemption if both the following requirements are met: 1) Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025. 2) You have a financially binding commitment to continue using the vehicle for private use on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding. To qualify for the EV discount, plug-in hybrid electric vehicles must have been delivered by midnight on 31 March 2025. Due to high demand and stock limitations there may be some vehicles that do not meet the delivery deadline for the EV Discount. Customers are advised to confirm delivery timelines before proceeding with their order.
What happens if I go on leave such as unpaid leave? Will I still be eligible for the exemption under my existing lease?
If an employee on leave does not use the PHEV during their absence, this can interrupt the existing agreement, potentially affecting the FBT exemption.
- Note that if an employee goes on unpaid leave but prepays the lease payments in advance and the novation does not stop, there would be no change in the commitment and the FBT exemption would be maintained
We encourage customers to check the ATO website to understand leave impacts on their PHEV lease.
Please note: From 1 April 2025, a plug-in hybrid electric vehicle is no longer considered a zero or low emissions vehicle under FBT law. However, your employer can continue to apply the exemption if both the following requirements are met: 1) Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025. 2) You have a financially binding commitment to continue using the vehicle for private use on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding. To qualify for the EV discount, plug-in hybrid electric vehicles must have been delivered by midnight on 31 March 2025. Due to high demand and stock limitations there may be some vehicles that do not meet the delivery deadline for the EV Discount. Customers are advised to confirm delivery timelines before proceeding with their order.
What happens with my PHEV lease if I go on parental leave?
If you go on parental leave and continue to pay the lease payments/running costs through your salary packaging balance during the period of leave, the PHEV exemption would continue as there is no change to the financial commitment. If you go on parental leave, cease your novation agreement and make lease payments direct to the financier, we would terminate your account. You would be required to sign a new novation agreement upon return from parental leave to commence the packaging again. In this instance, the PHEV exemption would cease as there is a change to the financial commitment by terminating the original novation agreement and then taking on a new novation agreement upon return.
Please note: From 1 April 2025, a plug-in hybrid electric vehicle is no longer considered a zero or low emissions vehicle under FBT law. However, your employer can continue to apply the exemption if both the following requirements are met: 1) Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025. 2) You have a financially binding commitment to continue using the vehicle for private use on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding. To qualify for the EV discount, plug-in hybrid electric vehicles must have been delivered by midnight on 31 March 2025. Due to high demand and stock limitations there may be some vehicles that do not meet the delivery deadline for the EV Discount. Customers are advised to confirm delivery timelines before proceeding with their order.
What happens if a PHEV is replaced due to damage on an existing lease?
If a TOTAL LOSS occurs and the PHEV is replaced (like for like), standard change of asset documentation is required, and the exemption will still apply. Note that the replacement vehicle must be noted on the existing contract and all other contract details including pricing and end date must remain the same.
Please note: From 1 April 2025, a plug-in hybrid electric vehicle is no longer considered a zero or low emissions vehicle under FBT law. However, your employer can continue to apply the exemption if both the following requirements are met: 1) Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025. 2) You have a financially binding commitment to continue using the vehicle for private use on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding. To qualify for the EV discount, plug-in hybrid electric vehicles must have been delivered by midnight on 31 March 2025. Due to high demand and stock limitations there may be some vehicles that do not meet the delivery deadline for the EV Discount. Customers are advised to confirm delivery timelines before proceeding with their order.
Am I able to break my PHEV lease early and re-lease prior to 1 April 2025 to receive the exemption.
The ATO has cautioned against breaking leases and re-leasing prior to 1 April 2025.
Please note: From 1 April 2025, a plug-in hybrid electric vehicle is no longer considered a zero or low emissions vehicle under FBT law. However, your employer can continue to apply the exemption if both the following requirements are met: 1) Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025. 2) You have a financially binding commitment to continue using the vehicle for private use on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding. To qualify for the EV discount, plug-in hybrid electric vehicles must have been delivered by midnight on 31 March 2025. Due to high demand and stock limitations there may be some vehicles that do not meet the delivery deadline for the EV Discount. Customers are advised to confirm delivery timelines before proceeding with their order.
What happens if the company I work for changes novated lease providers and I need to execute a new novated lease agreement?
If a new lease agreement was required, this would constitute a break in the existing lease agreement and a new financially binding commitment. If the new lease agreement is entered into on or after 1 April 2025 for a PHEV, the exemption will no longer be available from the date the existing lease agreement ceases. However, if an administrative change takes place and a new lease agreement is not required, the PHEV exemption held would still apply.
Please note: From 1 April 2025, a plug-in hybrid electric vehicle is no longer considered a zero or low emissions vehicle under FBT law. However, your employer can continue to apply the exemption if both the following requirements are met: 1) Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025. 2) You have a financially binding commitment to continue using the vehicle for private use on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding. To qualify for the EV discount, plug-in hybrid electric vehicles must have been delivered by midnight on 31 March 2025. Due to high demand and stock limitations there may be some vehicles that do not meet the delivery deadline for the EV Discount. Customers are advised to confirm delivery timelines before proceeding with their order.
EVs – General
What is the difference between an electric and hybrid vehicle?
EVs – or Battery Electric Vehicles (BEVs) – are solely electric vehicles. This means that you plug it into a charger, and it uses only available battery power to drive.
Plug-in-hybrid vehicles – or PHEVs – have petrol motor and electric motor components; a halfway point between fuel-powered cars and electric cars if you like. You need to charge the batteries for the electric motor component. However, their electric-only driving range is generally short – between 40 to 100 kilometers. From there it will switch over to the motor and conventional fuel.
The other type of hybrid is the more traditional non-plug-in hybrid (HEV). These have been in the market for around 20 years since the launch of the Toyota Prius. HEVs run on both an internal combustion engine and a battery, but the difference is you cannot charge HEVS; they use energy stored in the battery from what is called ‘regenerative braking’.
Why should I choose an EV over a plug-in hybrid – or vice versa?
Both provide advantages. A PHEV might suit someone who lives inner city, where trips are commonly short in duration and distance, so that the vehicle can mainly use the electric power it has without needing to significantly access the motor.
The benefit continues for longer trips away, where charging infrastructure may not be as readily available, and the vehicle is able to rely solely on its engine.
An electric vehicle doesn’t require fuel and because it has fewer moving parts to service (including no engine or transmission), it should generally be cheaper to operate overall. However, you need to charge the battery at regular intervals, so some pre-planning will be needed for longer trips.
How much less does it cost to run an electric vehicle?
How do I get a charger for my EV?
Most new EV sales include an entry level charger which simply connects to a normal electricity power outlet that you would have at home, with faster, more advanced chargers available for an optional cost – expect to pay somewhere in the vicinity of $2,000 to $3,000. These units – which cannot be packaged as part of a novated lease - charge much faster and provide other benefits in terms of monitoring and re-charging your vehicle.
There are also many public charging solutions available. The Electric Vehicle Council of Australia website lists all the charging stations around Australia, the type of chargers – from entry level to DC Superchargers – and leading charging infrastructure providers.
What are some of the leading manufacturers of EVs?
What EVs are available in Australia?
EVs from many of Australia’s most popular manufacturers are available. This page, from the Electric Vehicle Council of Australia, lists them all:
To discover Maxxia’s range of EVs: Click here
Will EVs get cheaper in the future?
How long do EVs take to charge?
As technology changes and more EVs hit the market, charging times are decreasing significantly. Entry-level chargers supplied with EVs can take up to 30 hours to full charge a vehicle; this timeframe reduces to overnight with higher capacity chargers. We recommend talking with your dealer on the estimated charging time, to consider if a higher capacity charger at extra cost is a worthwhile investment
Public or roadside chargers can be much faster – often providing 120km of charge capacity within 45 minutes depending on what vehicle you have. These can be convenient for leaving to charge while you have an appointment, shopping or work to attend to.
Super-charge stations – dotted across the populous parts of Australia – can add up to 300 kilometres of range in just 10 to 15 minutes.
How far can EVs and hybrid vehicles travel on a charge?
How often do I need to replace the battery in an EV?
Are batteries dangerous in cars?
Can you tow with an EV?
Can you recommend any resources for more information on EVs and Hybrids?
EVs – Novated Leasing
Do electric cars need servicing?
Can I package the electricity used to charge the vehicle
Can I salary package the purchase price of a charger?
If I use a public charger, how do I claim the cost for my novated lease?
Can I get insurance if I take out a novated lease on an EV in the same way I would a regular petrol-fuelled car?
What happens if you break down?
As there are few moving parts to an EV, the likelihood of a breakdown is less likely – unless you run out of power, of course. In the event this happens, you can simply call our roadside assistance service as you would do with a petrol vehicle. Alternatively, plug it into the nearest power point.
It’s worth noting, too, that some roadside assistance companies are updating their roadside service to provide a 20- to 30-minute top-up charge to get the car to the nearest charge station.
Please note: From 1 April 2025, a plug-in hybrid electric vehicle will not be considered a zero or low emissions vehicle under FBT law. However, your employer can continue to apply the exemption if both the following requirements are met: 1) Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025. 2) You have a financially binding commitment to continue using the vehicle for private use on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding. To qualify for the EV discount, plug-in hybrid electric vehicles must be delivered by midnight on 31 March 2025. Due to high demand and stock limitations there may be some vehicles that do not meet the delivery deadline for the EV Discount. Customers are advised to confirm delivery timelines before proceeding with their order.