BYD has rocketed toward the top of the Australian sales charts, accelerating past household names such as Ford, Mazda, Kia and Hyundai to finish in second place to Toyota last month.
Fuel supply concerns, a shift towards electric vehicles, and a strong green vehicle range turbocharged the brand’s ascent in April.
Electric cars represented one in six new cars sold last month, when the BYD Sealion 7 was the nation’s best-selling EV – doubling the sales tally of Tesla’s Model Y.
The new Toyota RAV4 hybrid was the number one vehicle overall, finishing ahead of the Ford Ranger, Toyota HiLux, Chery Tiggo 4 and Hyundai Kona.
Almost one in three cars sold locally were build in China, which has surged past Japan, Thailand and Korea to be the nation’s top supplier of new cars.
BYD will challenge Toyota for the top spot with an aggressive play for market share that includes diverting 30,000 cars to Australia in May and June.
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EV sales will also be boosted by the Albanese Government’s decision to keep its foot on the gas of a tax perk driving EV sales.
Juggling pressure from critics who say the Electric Vehicle Discount costs the government too much money, and advocates who say it drove green car progress, the Government chose to compromise and keep the existing deal going a little longer before gradually reducing its incentive.
The Electric Vehicle Discount started in July 2022 as a way to make battery-powered cars cheap to lease – not buy – in a bid to put thousands of green vehicles into driveways, and stimulate a second-hand electric vehicle market that was almost non-existent four years ago.
It only applies to electric cars that come in under the government’s luxury car tax threshold which is currently $91,387.
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The policy makes electric cars cheaper to lease by waiving the amount of Fringe benefits Tax that customers usually pay when leasing a car through their employer.
It means a diesel-powered Ford Everest Sport that costs about $75,000 drive-away to purchase currently costs about $427 per week to lease, while a Tesla Model Y Premium also sold for about $75,000 costs just $248 per week through Maxxia finance.
Changes to the incentive will see it limited to cars priced under $75,000 from 2027, which will limit the number of electric cars people can choose.
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It means EVs from prestige brands such as Audi, BMW, Mercedes and Volvo will be harder to get hold of.
Tesla fans will have to choose more basic models, too.
From April 2027 to April 2029, EVs priced between $75,000 and the LCT threshold will be subject to 75 per cent of the FBT paid by other vehicles.
After April 2029, all electric vehicles leased will incur 75 per cent of the normally applicable FBT.
Critics of the current policy have opposed it for a number of reasons including that it is tough to access for small business owners who may not be able to access “salary sacrificing” products offered in large organisations.
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The decision to extend the policy before phasing down incentives has been welcomed by the car industry.
Tony Weber, chief executive for the Federal Chamber of Automotive Industries, said the discount played an important role in electric vehicle sales.
“The increase in supply of EVs since the introduction of the New Vehicle Efficiency Scheme, combined with higher petrol prices and the continued support provided through the Federal Government’s Electric Car Discount, is now translating into stronger demand,” he said.
“There are around 110 EV models available to Australians, and the supply of EVs continues to increase. The Electric Car Discount has provided important stimulus to the market, and its continuation will support the growth of EVs.”
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Australian Automotive Dealer Association chief executive James Voortman said EV sales will continue to grow.
“New car dealers are seeing unprecedented demand for EVs in Australia right now with current economic conditions motivating everyday Australians into low emission vehicles,” he said.
Australian Automotive Dealer Association chief executive James Voortman said EV sales will continue to grow.
“New car dealers are seeing unprecedented demand for EVs in Australia right now with current economic conditions motivating everyday Australians into low emission vehicles,” he said.
Rohan Martin, chief executive of the National Automotive Leasing and Salary Packaging Association, said the Federal Government’s FBT change strikes the right balance between cost‑of‑living relief, market certainty and long‑term fiscal responsibility.
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“The EV Discount has already helped more than 100,000 Australians overcome the upfront cost barrier to switching to a cheaper‑to‑run vehicle. Without it, many outer‑suburban families, essential workers and cost‑conscious households simply wouldn’t be able to make the switch,” he said.
“While expert modelling underlined the importance of the current Electric Car Discount policy settings remaining in place until the EV market becomes self-sustaining, we recognise the government has a responsibility to balance fiscal sustainability with Australia’s transition to a low emissions future.”
Scott Wharton, chief executive for lease provider Smartgroup, said the Electric Vehicle Discount had been an important policy.
“Our customers are largely nurses, teachers and not-for-profit workers, they have told us that this policy made it possible for them to transition to an electric vehicle and reduce their living expenses,” he said.
“This policy has been particularly critical for customers earning less and living in outer suburban areas, making the benefits of the energy transition affordable for those who need it most.
“We also know that our charging‑infrastructure partners are willing to invest more where there is policy continuity, which is exactly what we are seeing from the government. Clear market signals that allow businesses to make long‑term decisions.”
