Thinking about snagging one of the swanky new plug-in hybrid vehicles (PHEVs) popping up on Aussie roads? Here’s your cue to act fast, especially if you’re looking to cash in on the fringe benefits tax (FBT) exemption.
The beloved tradie tax break has been a long-standing benefit of owning a work ute, helping to shave thousands off the operating costs of some of the country’s most popular models (like the Hilux or D-max) both on and off the job site.
So when it was announced that in 2022 new hybrid and electric models hitting the streets would be enjoying the same cost-cutting advantages, it was a no-brainer for blue-collar workers to become early buyers for the new wave of battery-backed utes.
However, despite industry leaders rallying to extend this sweet deal, it seems the FBT exemption is coming to an end for a whole host of tradie trucks hitting Aussie shores in the next six months.
PHEVs revving up sales while they can
The good news? Electric vehicles (EVs) get to keep the tax break indefinitely. The bad news? The plug’s being pulled on the far more popular PHEVs after April 1, 2025.
Automotive heavyweights like BYD, Ford, and Mitsubishi, along with groups like the Motor Trades Association of Australia (MTAA) and the National Automotive Leasing and Salary Packaging Association (NALSPA), have been lobbying hard to delay the exemption’s end date.
They argue that the tax perk has been a game-changer for PHEV sales, helping Aussies save big bucks over the life of a lease on several popular plug-ins like the BYD Shark 6, GWM Cannon Alpha Hi4T, and the impending Ford Ranger PHEV as the fledgling industry finds its feet.
SUVs like the petrol-electric BYD Sealion 6 have also stolen the spotlight, with BYD already selling over 5,000 Sealion 6s since June – claiming about 25 per cent of all PHEV sales in Australia this year.
In fact, PHEV sales as a whole are skyrocketing, with numbers more than doubling in 2024.
‘Bad timing’ says industry experts
MTAA CEO Matthew Hobbs isn’t thrilled about the looming deadline, calling it a blow to progress.
“The decision to end the FBT exemption for plug-in hybrid electric vehicles couldn’t have come at a worse time, especially as a range of hard-to-electrify utes are just entering the market,” Hobbs said.
He stressed that incentives like the FBT exemption are crucial to nudging consumers toward lower-emission options. Without it, sectors like rural, regional, and trade-heavy industries may struggle to adopt greener tech.
This tax-break sunset clause is courtesy of a deal brokered in 2022 when the Greens and Independent Senator David Pocock helped push the Electric Car Discount Bill through Parliament.
And Pocock isn’t on board with extending the exemption, arguing that government subsidies for petrol cars don’t align with EV goals.
“More Australians should enjoy the benefits of owning an electric vehicle, including much lower fuel costs, lower maintenance costs, and a better driving experience,” Pocock said, urging bold action on EV affordability, supply, and charging infrastructure.
Will the Government revisit the clause?
A sliver of hope still remains that the government will revisit the popular tax break, with Climate and Energy Minister Chris Bowen hinting earlier this year that the exemption’s end isn’t necessarily final.
“Not everyone’s ready to buy a full EV,” Bowen told the Australian Financial Review.
“Some people are looking to buy hybrids first as part of their journey.”
While no guarantees are on the table, the federal government might reconsider extending the PHEV exemption if it returns to power in 2025, depending on whether or not Labor take the top spot in the coming election.
That said, brands won’t stop bringing PHEVs Down Under. With Australia’s New Vehicle Efficiency Standard kicking off on January 1, low-emission PHEVs are still set to play a vital role in meeting regulatory benchmarks.
So, if you’re eyeing a hybrid ute, don’t wait too long. The tax break might not be here forever, but the race to greener wheels sure is speeding up.
