Australian EV and Hybrid Vehicle Financing Surges to Over $6 Billion in 2024

This substantial growth underscores a clear shift in consumer preferences towards more sustainable transportation options. Hybrid vehicles led the adoption, with 60,083 units financed, while fully electric vehicles accounted for 44,752 units. This trend reflects the practical decisions Australians are making as they transition towards cleaner transport solutions.

Commercial financing played a pivotal role in this transition, accounting for the majority of the growth. AFIA members financed 82,617 commercial vehicles, up 62% from 51,560 in 2023. Novated leasing remained a major driver, representing nearly 70% of all transactions. This indicates that businesses are increasingly investing in sustainable vehicle options, contributing to the overall reduction of transport-related emissions.

Despite this positive momentum, challenges remain. The report identifies key barriers to further EV and hybrid vehicle uptake, including underdeveloped charging infrastructure, fragmented policy settings, and the phasing out of financial incentives. For instance, the end of the Fringe Benefits Tax (FBT) exemption for plug-in hybrid electric vehicles (PHEVs) led to a sharp decline in sales for this category in early 2025.

To sustain and accelerate this growth, AFIA emphasizes the need for clear, consistent, and future-focused policies from the government. Recommendations include reinstating the FBT exemption for PHEVs, fast-tracking public and private charging infrastructure projects, introducing upfront discounts and price subsidies, and raising awareness of how household energy models will change in the future.

As the finance industry continues to support Australia's transition to lower-emissions transport, collaboration between financial institutions, policymakers, and consumers will be crucial in overcoming existing barriers and achieving a more sustainable future.