The EV Discount is Under Review in 2026: What You Need to Know

Ahead of the 2022 Federal Election, Anthony Albanese’s Labor Party pledged to introduce an incentive to encourage uptake of electric vehicles (EVs) if elected.

Albanese won the election, and the Electric Car (EV) Discount Bill – and an exemption from paying Fringe Benefits Tax (FBT) on eligible EVs via novated lease – became law in December 2022.

What this meant for Australians was: get behind the wheel of an eligible EV and pay for it with before-tax salary.

As one of Australia’s largest novated lease providers, with more than 30 years’ experience helping Aussies save tax by salary packaging a car, Maxxia geared up its systems to prepare for the quickly evolving adoption of EVs across the country.

EV Growth Via Novated Leasing

Since then – a period in which the number of EV models available in Australia has grown from 56 in 2022 to over 160*, and new-car sales increased from less than 2% to more than 12% by the end of 2025** – Maxxia has helped thousands of Australians save tax on EVs.

We have also worked closely with the National Automotive Leasing and Salary Packaging Association (NALSPA) to champion the extension of the EV Discount for our customers amid cost-of-living pressures, as well as other industry leaders to ensure customers are up to date on EV government incentives.

Government EV Incentive Under Review

Now in 2026, the EV Discount is under government review. While the review is officially taking place from 6 February 2026 and due to report by mid 2027, a decision can be made on whether to alter, continue or cease at any time during this period.

The review will look at:

• The role of the electric car discount in supporting early adoption of electric vehicles.
• Whether government incentives are still required to drive EV uptake.
• Whether the current settings will be altered (for example, whether FBT exemptions will be tightened, or limited to certain vehicle types or values).

We do not yet know whether FBT exemptions on existing leases will be honoured (or “grandfathered”) until the end of the lease period.

We will continue to monitor developments closely and advise customers as soon as we know any outcome, including transparently communicating the impacts.

Making the EV Discount Work for You

The EV Discount has been a gamechanger for Australian car-buying conversation and consideration – not least that in 2022, there were only two EVs retailing for under $40,000. Today, there are around 10 – with one model (the BYD Dolphin Essential) below $30,000. Where EVs once dwarfed petrol vehicles for price, today parity is much closer.

If you would like to learn more about how an EV on novated lease could work for you, select your desired vehicle and crunch the numbers in our handy calculator, or call us on 1300 123 123.

^{* Treasury: https://minister.dcceew.gov.au/bowen/media-releases/joint-media-release-electric-car-discount-review}

^{** Electric Vehicle Council State of Electric Vehicles 2025: https://electricvehiclecouncil.com.au/wp-content/uploads/2025/10/State-of-EVs_2025_141025-2.pdf}

^{*** EV Council blog: https://electricvehiclecouncil.com.au/media-releases/electric-vehicle-sector-urges-government-not-to-hit-the-brakes-on-electric-car-discount/}

^{**** NALSPA: https://nalspa.org.au/wp-content/uploads/2026/02/Submission-Final-2.pdf}

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