Electric Vehicle Financing Sees Significant Growth in Australia

While the overall value of new vehicles financed declined by nearly 3% compared to the previous year, EV financing experienced substantial growth. This trend suggests that Australian consumers are increasingly prioritizing sustainable transportation options, even in the face of economic challenges.

AFIA CEO Diane Tate attributed this surge to factors such as the Fringe Benefits Tax (FBT) exemption for EVs, rising fuel prices, and improved vehicle supply. However, she noted that EVs still constitute only 16% of all vehicles financed in Australia over the past year, indicating significant potential for further growth.

Conversely, financing for hybrid vehicles has declined, with a 42% drop in February 2026 compared to the same month in 2025. This decrease follows the removal of the FBT exemption for plug-in hybrid vehicles in March 2025, suggesting that government incentives play a crucial role in consumer adoption of alternative fuel vehicles.

The AFIA's findings underscore the importance of supportive policies and infrastructure development to sustain and accelerate the transition to electric mobility in Australia.