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Throughout 2024, demand for economically friendly transport surged with hybrid and electric vehicles finance jumping 50 per cent, according to a recent Australian Finance Industry Association (AFIA) study.
Last year saw over $6.17 billion in finance for electric and hybrid vehicles. A total of 104,835 of these vehicles were purchased, up from just 64,288 in 2023.
Hybrid vehicles remain more popular than purely electric, with 60,083 hybrids financed in 2024 compared to 44,752 electrics.
AFIA members financed 82,617 commercial vehicles, up 62 per cent from 51,560 in 2023. Most of these deals (70 per cent) were novated leases.
AFIA CEO Diane Tate said vehicle financing is “critical” in helping boost the uptake in environmentally beneficial transport.
“It removes upfront cost barriers and gives more Australians access to vehicles that are cleaner, cheaper to run, and increasingly affordable,” Tate said.
"As this trend continues, there are significant opportunities for the finance industry in helping consumers and businesses navigate finance options and access the right vehicle for their needs.”
Despite the strong numbers by brokers, Tate said government policy is helping dampen progress. She called for “clear, consistent, and future-focused policy” to help gain momentum.
As of 1 April 2025, plug-in hybrid electric vehicles no longer qualify for the fringe benefits tax (FBT) exemption.
This hindered the promising growth of 2024 as hybrid new business value dropped by 47.2 per cent and the volume of hybrid vehicles financed fell by 40 per cent compared to March 2025.
“To provide Aussies with options that suit their transport needs, we must bring back the FBT exemption for plug-in hybrids, fast-track public and private charging infrastructure projects, introduce upfront discounts and price subsidies that have proven to be effective overseas, and raise awareness of how household energy models will change in the future, and thus support economic and energy transition,” Tate said.
The popularity of hybrid vehicles is reflective of customers who want to promote lower emissions transport, but may not be able to fully rely on electric models.
“This choice is sensible for many Aussies, particularly while public and private charging infrastructure improves,” Tate said.
“At the same time, we’re seeing steady and growing confidence in fully electric vehicles. Our members are making it easier for both households and businesses to make the switch.”
As recently reported by Broker Daily, the number of business owners looking to invest in vehicles has seen an uptick following the extension of the government’s asset write-off.
“At the start of the year, there was a cohort of business owners who delayed decisions to invest in a vehicle or a new piece of equipment for their business because of concerns about the economy, geopolitical uncertainty and the continued pressures from higher cost of living,” said CBA’s general manager, asset finance, Renee Theodor.
“However, we have seen momentum tick up over the past month and I expect this to continue post the Federal Election, particularly with the end of the financial year approaching and the extension of the Government’s $20,000 Instant Asset Write Off for another 12 months.”
[Related: CBA speeds up small business asset finance process]
