vehicles · Equipment & asset finance
Electric vehicle finance
The finance for an EV is conventional; the tax and running-cost maths is not. We lay out both so the decision is made on the full picture.
What is electric vehicle finance?
Electric vehicle finance is funding for a battery electric or plug-in hybrid vehicle bought through a business, secured against the car. EV finance works much like any vehicle finance in Australia, but battery warranty, charging infrastructure and the fringe benefits tax exemption for eligible EVs change the overall economics.
Electric vehicles have moved from novelty to mainstream in Australian business fleets, driven largely by tax treatment rather than by fuel savings alone. The fringe benefits tax exemption for eligible low-emission vehicles made novated leasing an EV materially cheaper than the equivalent petrol car for many employees, which is why a large share of Australian EV sales now run through salary packaging.
From a finance point of view, an EV is a normal vehicle asset. What differs is residual value risk. Used EV prices have moved sharply as new models arrived and prices were cut, so lenders and lessors set balloon and residual values conservatively. If you plan to keep the vehicle for the full term and beyond, that matters less. If you plan to trade at three years, ask your broker to model the balloon carefully.
Electric vehicle finance at a glance
| Typical price range | $40,000 – $180,000 |
|---|---|
| Finance term | Up to 84 months |
| Useful life | About 10 years |
| New or used | New EVs are the bulk of purchases and carry long battery warranties; the used EV market is growing but values have moved sharply, so lenders assess residuals conservatively. |
| Indicative rates (Novated lease) | 6.9% – 13.5% p.a. · rate history |
| Finance structures | Novated lease (recommended), Chattel mortgage, Business vehicle finance |
How lenders assess electric vehicle finance
Panel lenders fund EVs on standard vehicle terms, though some are more conservative on residual and balloon values because used EV pricing has been volatile. Battery warranty transferability is worth confirming, as it supports resale. Chargers and installation can sometimes be included when quoted with the vehicle or funded as equipment. The FBT exemption for eligible low-emission vehicles has made novated leasing particularly attractive for employees, and many EV purchases now run through that structure rather than a chattel mortgage.
Before you buy
- Confirm the battery warranty term, capacity threshold and whether it transfers to a subsequent owner.
- Price the charging setup properly — a three-phase wall charger plus electrical work can add several thousand dollars.
- Check eligibility for the fringe benefits tax exemption with your accountant before choosing between a novated lease and outright purchase.
Commonly financed
Tesla Model 3 and Model Y · BYD Atto 3 and Seal · Kia EV5 and EV6 · Hyundai Ioniq 5 · Polestar 2
Estimate electric vehicle repayments
- Number of repayments
- 60
- Balloon at end of term
- $22,000
- Total interest (est.)
- $30,772
- Total repaid (est.)
- $140,772
This calculator provides an estimate only and does not account for fees, charges or the specific terms a lender may offer. It is not financial advice or an offer of finance.
Key terms
What is electric vehicle finance?
Electric vehicle finance is a secured loan or lease used to buy a battery electric or plug-in hybrid vehicle, with the car as security. Terms usually run 36 to 84 months, and the structure may be a chattel mortgage, a finance lease or a novated lease.
Is there an FBT exemption for electric cars in Australia?
Eligible low-emission vehicles under the luxury car tax threshold for fuel-efficient vehicles can be exempt from fringe benefits tax when provided to an employee, which is why novated leasing an EV is often cheaper than an equivalent petrol car. Eligibility rules have changed over time, so confirm current settings with your accountant.