EV Range and Your Novated Lease: What Actually Matters
- Tim Bond
- 1 hour ago
- 4 min read
Key Facts Panel
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If you're weighing up EV range while shopping for a novated lease, there's a detail that catches a lot of buyers out: the price that gets you more range can also push you straight out of the biggest tax benefit on offer. Range and price move together, and price is exactly what decides your FBT exemption. Here's how to think about EV range without accidentally leasing your way into a worse deal.
This is general factual information, not financial or tax advice. Your specific outcome depends on your income, employer and lease terms, always confirm your numbers with a licensed financial adviser or your novated lease provider.
Why More Range Doesn't Always Mean a Better Lease
It's tempting to chase the longest range you can find, but on a novated lease, the sticker price is doing double duty. It sets your lease repayments, and it decides which FBT tier you fall into. A car with an extra 100km of range but a $20,000 higher price tag can genuinely cost you more twice over, once in higher lease payments, and again if it pushes you into a lower tier of tax benefit or out of the exemption altogether.
This matters more from April 2027 onward, when the exemption starts narrowing based on price. A car at $74,000 keeps the full benefit. The same car at $76,000 does not.
That's a real cliff edge worth knowing about if your lease timeline runs anywhere near that date.
How Range and Price Interact with the FBT Exemption
Price Tier | Example Models | Typical WLTP Range | FBT Treatment (from April 2027) |
Under $75,000 | MG4 Essence 64 ($39,990), Tesla Model Y RWD ($58,900), Subaru Trailseeker ($67,990-$69,990), Zeekr 7X RWD ($57,900) | Roughly 400-533km | Full exemption retained |
$75,000 to $91,661 | Tesla Model Y Performance (around $89,400) | Roughly 500-550km | 25% FBT discount only, not full exemption |
Above $91,661 | BMW iX3 ($109,900), Porsche Macan EV ($129,800), Genesis GV70 Electrified ($132,800) | Up to 805km (iX3) | No FBT exemption or discount at all |
Look closely at that table and the pattern is clear: some of the longest-range vehicles available sit comfortably under $75,000, so chasing range doesn't automatically mean chasing a worse tax outcome. The Subaru Trailseeker, for instance, claims up to 533km of WLTP range while sitting safely under the $75,000 cutoff for the strongest FBT treatment.
Getting the Range and Lease Balance Right
The smartest approach is working backwards from the FBT tiers rather than forwards from a wish list of range figures. Decide which price bracket protects the tax outcome you want for the length of your lease term, then find the longest-range EV available within that bracket, rather than picking a range figure first and discovering the tax consequences afterward.
Also worth factoring in: running costs.
An EV's electricity cost per kilometre is typically a fraction of petrol, and under the ATO's home charging guidelines, employers can use a deemed rate per kilometre rather than requiring you to track exact electricity use.
That running-cost saving compounds over a lease term regardless of which range or price tier you choose, so it shouldn't be the deciding factor between two EVs, but it is worth including in your overall comparison against a petrol vehicle.
Buy or Avoid: The Verdict
Prioritise range without hesitation if: your ideal EV sits under $75,000, since you get both strong range options and the most durable FBT treatment through to 2029.
Think carefully before chasing range if: it pushes you above $75,000, and especially above $91,661, where the tax benefit either narrows or disappears entirely, a decision that's easy to make on spec sheets alone and harder to reverse once the lease is signed.
FAQs about an EV Range Novated Lease
Does EV range affect my novated lease FBT exemption? Not directly, but price does, and price and range are closely linked. The FBT exemption is based purely on the vehicle's price against the luxury car tax threshold for fuel-efficient vehicles, not its range.
What is the FBT exemption threshold for EVs in 2026-27? The threshold is $91,661 for the 2026-27 financial year. Only battery-electric and hydrogen fuel-cell vehicles qualify, plug-in hybrids no longer do.
Can I still get a fully FBT-exempt novated lease on a long-range EV? Yes, if the vehicle is priced under $91,661 and your lease is signed before 31 March 2027. After that date, only vehicles priced at $75,000 or under retain the full exemption.
Will my novated lease change if the FBT rules change after I sign? Generally no. Leases signed while the current rules apply are typically grandfathered under those terms for the life of the lease, though you should confirm this directly with your provider.