A new survey commissioned by Novated Lease Australia has found that while the price of EVs is a major purchase barrier for 84% of Australians, 46% would consider switching to an EV in an arrangement with their employer.
The findings come from a survey of an independent panel of 1000 Australians across different age groups. Similar proportions of Australians across each demographic were deterred by the current cost of EVs. Older Australians were slightly more cost conscious: 88 per cent of over-51s compared with 82 per cent of under-51s believed electric vehicles are too pricey for them.
A novated lease agreement allows an employee to lease a car through a ‘salary sacrifice’ arrangement, where the cost of the car is paid for through their pre-tax pay. Their salary sacrifice can not only cover repayments on the car itself but also fuel, servicing, insurance and other running costs.
At the end of the lease term, employees can choose to pay the balance and own the car outright or upgrade the car.
According to the National Automotive Leasing and Salary Packaging Association, novated leases are estimated to be used in one in ten new car sales annually.
Younger Australians are more likely to switch to an electric vehicle under a novated lease agreement to reduce costs: more than half (59 per cent) of under-30s indicated they would, compared with 32 per cent of over-51s.
“Our research highlights that novated leases are on the rise this year,” said Shaun McGowan, Founder and Managing Director at Novated Lease Australia. “Electric vehicle prices still have a long way to go to drop to a level that competes with petrol cars, yet an increasing proportion of the public and business sector are becoming more carbon conscious.
“Conscious of this price barrier, State and Federal Governments are financially incentivising organisations and motorists to make the switch. Perhaps now is the time for organisations that are sustainability-minded to add novated lease agreements for electric vehicles into their decarbonisation strategies.
“At the same time, I do anticipate prices to come down as electric vehicle production increases and increased competition from Electric Vehicle manufacturers entering the Australia market. However, increased infrastructure for charging stations will also be key to driving Australians to make the switch.”
State and Federal Governments across Australia have made recent efforts to reduce EV costs at the lower price range, including introducing the Electric Car Discount Bill in November last year, which removes the fringe benefits tax on battery, hydrogen fuel cell or plug-in hybrid electic vehicles valued at under $84,916.
The NSW Government is also offering a $3,000 rebate for new BEVs and hydrogen fuel cell vehicles worth under $68,750.
Keyword: Almost 1 in 2 Australians would switch to EVs through novated lease with employer