Electric vehicles have rapidly shifted from a niche choice to the dominant vehicle type for customers at Novated Lease Australia, with EVs accounting for around 80 per cent of the company’s new leases during the most recent quarter.
That compares with an EV share of around 55 per cent as recently as February, highlighting how quickly novated leasing customers have changed their vehicle preferences during 2026.
Bevan Guest, CEO at Novated Lease Australia, said there had been a noticeable change in both demand and customer attitudes towards electric vehicles.
“I think we’ve seen EVs become much more mainstream.”
Guest said Novated Lease Australia’s mix had moved from approximately 55 per cent EV and 45 per cent internal combustion engine (ICE) vehicles to around 80 per cent EV and 20 per cent ICE.
“We’re now doing about 80% electric vehicles over the last quarter, and 20% ICE.”
“That sort of shift has gone from 55% electric, 45% ICE to 80/20, essentially since February.”
The change provides another indication of the important role novated leasing is playing in Australia’s transition to electric vehicles.
While the Federal Government’s FBT exemption remains a major financial incentive for eligible battery electric vehicles, Guest believes greater model choice and broader awareness are also making EVs more accessible to mainstream buyers.
He said recent fuel prices had boosted demand, while the growing number of electric vehicles across different market segments meant more motorists could now find an EV that suited their needs.
For many customers, experiencing an EV also changes their perception of the technology.
“What we’re seeing is, once people drive an EV, they don’t look back, and so they become really big EV advocates.”
Popular models reflect the broader market
Novated Lease Australia’s most popular electric vehicles broadly reflect trends across the wider Australian market.
Guest identified the Tesla Model Y and BYD Sealion 7 among the leading models being selected by its customers.
The company has also recorded significant growth in BYD vehicles, with Guest saying Novated Lease Australia had experienced a 62 per cent increase in BYD orders over the last 12 months. That growth has coincided with the arrival of more EVs at different price points and in popular SUV segments, giving novated lease customers substantially more choice than they had only a few years ago.
The remaining ICE and plug-in hybrid demand is also concentrated around vehicles with strong fuel-efficiency credentials.
Guest pointed to familiar models, including the Toyota RAV4 and Ford Ranger, as well as plug-in hybrid vehicles such as the BYD Shark, as examples still attracting customers.
What happens when the tax incentive eventually changes?
The bigger question for the novated leasing industry is whether the rapid increase in EV demand can continue once the current FBT incentive eventually ends.
Guest expects novated leasing to continue growing because customers initially attracted by the tax benefits often discover other advantages after entering their first lease.
“People come in for the tax savings, but then they love the product because of the convenience of bundling your running costs, like your maintenance, and your insurance.”
Instead of receiving separate registration, insurance, servicing and tyre bills during the year, those costs can be incorporated into the employee’s regular vehicle budget.
For households trying to manage increasingly unpredictable expenses, that can become as important as the original tax saving.
Guest said the structure also gives customers a better understanding of what their vehicle actually costs to operate.
“When you bundle it together, they actually understand what the total cost of motoring is.”
That could become increasingly important as the first major wave of novated EV customers reaches the end of their leases.
Rather than returning to traditional vehicle ownership, Guest expects many to replace or extend their existing lease because they have become accustomed to the budgeting and convenience benefits.
For Fleet Managers and employers offering novated leasing, the figures also demonstrate how quickly employee vehicle preferences are changing.
Only a few years ago, an electric vehicle may have been an unusual selection within a salary packaging program. At Novated Lease Australia, it is now the default choice for four out of every five new leases.
