Electric Vehicle Finance Australia

Why Australian Businesses Are Switching to Electric Vehicles

Electric vehicle sales in Australia exceeded 110,000 units in 2024, representing over 8% of all new car sales — up from just 3.8% in 2022. With fuel prices consistently above $1.90/L for petrol and $2.00/L for diesel across major cities, the economic case for switching to an EV has never been stronger.

For sole traders, tradespeople, and fleet operators, an electric vehicle financed through a chattel mortgage or novated lease can deliver substantial savings in running costs, tax deductions, and — for eligible vehicles — a complete FBT exemption worth thousands annually.

Electric Vehicles Available for Business Finance in Australia

• Electric cars: Tesla Model 3 / Model Y, BYD Seal / Atto 3 / Dolphin, Hyundai Ioniq 5 / Ioniq 6, Kia EV6, MG4, Polestar 2, Volvo EX30 / EX40, BMW iX1
• Electric utes & 4x4s: BYD Shark 6 (PHEV), LDV eT60, with more models expected from Toyota, Ford, and GWM in 2025–2026
• Electric vans: LDV eDeliver 7, Mercedes-Benz eVito, Mercedes-Benz eSprinter, Ford E-Transit
• Electric trucks: SEA Electric (retrofit), Volvo FL Electric, Janus Electric (battery-swap prime movers), BYD ETM6

Indicative Electric Vehicle Finance Rates

Updated March 2026 • Rates are indicative only and subject to lender approval, credit profile, asset age, and loan amount.

*Rates depend on your credit score, time in business, asset age, deposit, and loan term. View our full rates guide →

Indicative Electric Vehicle Finance Rates

Updated March 2026 • Rates are indicative only and subject to lender approval, credit profile, asset age, and loan amount.

*Rates depend on your credit score, time in business, asset age, deposit, and loan term. View our full rates guide →

Charging vs Fuel Costs: EV vs Petrol vs Diesel

One of the biggest advantages of electric vehicles is the dramatically lower cost per kilometre. Whether you charge at home, at the workplace, or use public fast chargers, the running cost difference is significant — especially for high-mileage business use.

Assumptions: Electricity at $0.30/kWh (home) or $0.50/kWh (public DC); EV consumption 15 kWh/100 km; petrol at $1.95/L using 8 L/100 km; diesel at $2.10/L using 8.5 L/100 km. Your actual costs will vary by vehicle, driving conditions, and energy tariff.

Home Charging vs Public Charging

Most business EV owners do 80–90% of their charging at home or the depot overnight using a Level 2 (7 kW) wall charger. A full charge on a 60 kWh battery costs approximately $18 at off-peak rates and provides 350–450 km of range.

Public DC fast chargers (50–350 kW) are available at major highways, shopping centres, and charging networks like Chargefox, Tesla Supercharger, and Evie Networks. Costs range from $0.40–$0.60/kWh — still cheaper per km than petrol, but 2–3x the cost of home charging.

Sole trader tip: If you work from home, your electricity costs for EV charging used for business travel are a deductible business expense. Keep a logbook to distinguish business from personal use.

5-Year Total Cost of Ownership: EV vs Petrol

The purchase price of an EV is typically higher than an equivalent petrol vehicle, but total cost of ownership (TCO) over 5 years tells a very different story — especially for business users who can claim tax deductions and the FBT exemption.

Note: Figures are indicative based on publicly available pricing as at early 2026. Does not include finance costs or tax benefits, which would further favour the EV for business users. Resale value assumes 60% retention for Model 3, 50% for Camry.

Where EVs Save the Most

• Fuel savings: $1,300–$2,600 per year for a typical business doing 20,000 km annually
• Servicing: No engine oil, transmission fluid, spark plugs, exhaust system, or timing belt. EV servicing is typically 40–60% cheaper than a comparable petrol vehicle
• Brake wear: Regenerative braking dramatically extends brake pad life — many EVs go 100,000+ km before needing pad replacement

Where EVs Cost More

• Purchase price: EVs carry a $5,000–$20,000 premium, though this gap is narrowing rapidly — the BYD Dolphin starts under $35,000 drive-away
• Tyres: EV-specific tyres cost 10–25% more due to higher torque and vehicle weight, and may wear faster
• Insurance: Premiums are 10–20% higher on average, though this varies by insurer and model

EV Finance Structures Compared

The best finance structure for your electric vehicle depends on your business structure, GST registration, and whether you want to take advantage of the FBT exemption through salary sacrifice.

Chattel Mortgage for Electric Vehicles

The most common structure for ABN holders and sole traders financing an EV. You own the vehicle from Day 1, claim the full GST credit on your next BAS (up to $5,900 on a $65,000 EV), and deduct interest and depreciation annually. A chattel mortgage is ideal if the vehicle is used primarily for business purposes and you're GST-registered.

Novated Lease — The FBT-Free Option

For employees, a novated lease is the standout option for EVs. Under the Electric Car Discount, eligible battery electric vehicles below the fuel-efficient car luxury car tax threshold ($91,387 for 2025–26) are completely exempt from FBT. This means the employee pays for the vehicle using a mix of pre-tax and post-tax salary — with no FBT liability for the employer. The tax savings can effectively reduce the cost of the car by 30–50% compared to buying it outright with after-tax dollars.

Finance Lease

The lender owns the EV and leases it to you. Monthly payments are fully tax-deductible as an operating expense. At the end of the term, you pay the residual to take ownership, refinance, or hand the vehicle back. Finance leases work well for businesses wanting to keep the EV off their balance sheet.

Operating Lease

A long-term rental with no residual risk. You return the EV at the end of the term. Lowest regular repayments and 100% tax-deductible. Best for businesses that want to upgrade to newer EV models every 3–4 years as battery technology improves.

Electric Vehicle FBT Exemption Explained

The EV FBT exemption is one of the most significant tax incentives available to Australian vehicle buyers. Here's how it works and who qualifies.

Eligibility Criteria

• The vehicle must be a battery electric vehicle (BEV) or hydrogen fuel cell vehicle
• Plug-in hybrids (PHEVs) are eligible only if first held and used before 1 April 2025
• The vehicle's value must be below the fuel-efficient vehicle luxury car tax threshold — $91,387 for 2025–26
• The vehicle must be first held and used on or after 1 July 2022
• The exemption applies to cars provided as a fringe benefit — typically via a novated lease or salary sacrifice arrangement

How Much Can You Save?

Without the exemption, an employee with a $65,000 novated lease EV would generate an FBT liability of approximately $14,000–$17,000 per year (depending on kilometres driven and the statutory method used). With the exemption, this is reduced to $0.

Combined with pre-tax salary deductions for lease payments, running costs, and GST savings, an employee can effectively "buy" a $65,000 EV for a net cost equivalent to a $38,000–$45,000 vehicle purchased with after-tax income.

Does the FBT Exemption Apply to Sole Traders?

No — sole traders and partnerships don't pay FBT on vehicles they own and use in the business. The FBT exemption is specifically relevant to employer-provided fringe benefits (novated leases). However, sole traders still benefit from other EV tax advantages: instant asset write-off, depreciation, interest deductions, and lower running costs.

Tax Benefits of EV Finance for Business

Whether you're a sole trader, company, or employee with a novated lease, financing an electric vehicle unlocks a range of tax deductions.

For ABN Holders & Sole Traders (Chattel Mortgage)

• Instant Asset Write-Off: Deduct the business-use portion of the asset cost in Year 1 (subject to the current $20,000 threshold for small businesses, or under the general depreciation rules)
• Depreciation: If the car cost limit applies ($69,674 for 2025–26), you can claim depreciation up to this limit. For vehicles used 100% for business, the effective life is 8 years
• Interest Deductions: All interest on the chattel mortgage is deductible as a business expense
• GST Input Credit: If GST-registered, claim the GST on the purchase price (up to $6,344 for 2025–26 based on the car cost limit)
• Running Cost Deductions: Electricity for charging (business portion), registration, insurance, and maintenance are deductible

For Employees (Novated Lease)

• FBT Exemption: Zero FBT on eligible EVs below $91,387
• Pre-Tax Salary Sacrifice: Lease payments and running costs are deducted from pre-tax salary, reducing your taxable income
• GST Savings: The employer claims the GST, which reduces the effective cost of the vehicle and running costs
• Bundled Running Costs: Fuel (electricity), insurance, registration, servicing, and tyres can all be included in the novated lease package

Note: Tax benefits depend on your individual circumstances, business structure, and how the vehicle is used. Always consult a qualified tax professional before making finance decisions.

EV Finance Eligibility Requirements

Lender requirements for electric vehicle finance are generally the same as for any commercial vehicle. Here are the typical benchmarks:

• Australian Business Number (ABN) — active, and ideally GST-registered
• ABN trading history of at least 12 months (some lenders accept start-ups with additional security)
• Clear personal credit history — no defaults or judgements
• Proof of income — BAS statements, tax returns, or bank statements for the last 6–12 months
• Valid Australian driver licence

EV-Specific Considerations

• Residual values: Some lenders are still conservative with EV residual values, which may affect finance lease terms. Chattel mortgages are unaffected as you own the asset
• Battery warranty: Most lenders look favourably on the 8-year / 160,000 km battery warranty now standard across major EV manufacturers
• Charging infrastructure: You don't need a home charger to get approved, but having one (or access to workplace charging) signals lower risk of range-related issues
• New vs used EVs: Used EVs (e.g., ex-fleet Tesla Model 3s) are financeable, though lenders may require higher deposits for older models without remaining battery warranty

EV Finance for Sole Traders & Tradies

Sole traders and tradespeople are among the fastest-growing segments of EV adopters in Australia, driven by the combination of lower running costs and strong tax deductions.

Best EV Options for Tradies

• Electric utes: The BYD Shark 6 (PHEV, from ~$60,000) offers a dual-cab body with 100 km electric range — enough for most daily job-site commutes. Full battery electric utes from Ford and Toyota are expected by late 2026
• Electric vans: The LDV eDeliver 7 (from ~$65,000) offers up to 230 km range — ideal for metro tradespeople doing multiple site visits per day
• Electric SUVs as work vehicles: The Tesla Model Y, BYD Atto 3, and Hyundai Ioniq 5 all offer substantial cargo space and qualify for the chattel mortgage structure when used primarily for business

Chattel Mortgage Example: Sole Trader

A self-employed electrician finances a Tesla Model Y RWD ($62,990 drive-away) via chattel mortgage over 5 years at 6.5% with a 30% balloon ($18,897):

• Weekly repayment: ~$204 (excl. GST)
• Year 1 GST credit: $5,726 claimed on next BAS
• Annual interest deduction: ~$2,800 (Year 1)
• Depreciation deduction: Claim under effective life (8 years) or simplified depreciation rules
• Annual fuel saving vs diesel ute: ~$2,200 (20,000 km at home charging rates)

Electric Vehicle Finance FAQs

Related EV & Finance Guides