Australia’s A$6bn EV and hybrid finance surge in 2024

Australia’s transition to cleaner transport reached a major milestone in 2024, with over A$6.17 billion in financing supporting the purchase of electric and hybrid vehicles – a staggering 50% increase year-on-year, according to new data from the Australian Finance Industry Association (AFIA).

More than 104,835 low-emissions vehicles were financed across the country in 2024, up from 64,288 in 2023. The rapid growth signals a significant shift in consumer and business transport preferences, as the nation embraces sustainability amid ongoing infrastructure and policy challenges.

The latest AFIA Electric Vehicle & Hybrid Finance Report reveals that hybrid vehicles remain the dominant choice, with 60,083 financed in 2024, compared to 44,752 fully electric vehicles (EVs). While EVs are growing steadily in popularity, hybrids appear to meet the current practical needs of many Australians.

“This choice is sensible for many Aussies, particularly while public and private charging infrastructure improves.”

At the heart of the boom is commercial vehicle finance, which made up the majority of growth. In 2024, AFIA members financed 82,617 commercial vehicles, a 62% increase from the 51,560 financed in 2023. Novated leasing has emerged as a major driver of uptake, accounting for nearly 70% of all transactions.

“Finance is critical to turning good intentions into real outcomes,” Tate said. “It removes upfront cost barriers and gives more Australians access to vehicles that are cleaner, cheaper to run, and increasingly affordable.”

Despite the 2024 success story, the start of 2025 has revealed just how sensitive the market is to government policy changes. The removal of the Fringe Benefits Tax (FBT) exemption for hybrids and plug-in hybrids (PHEVs) led to a sharp decline in financing activity in April 2025.

Following a March surge, where consumers rushed to finalise purchases before the exemption expired, hybrid vehicle new business value fell by 47.2%, and volumes dropped 40% month-on-month in April.

“These figures further highlight the role that financial incentives and policy consistency play in accelerating or hindering Australia’s transition to lower-emissions transport,” said Tate.

She credited the previous FBT exemption as a “highly effective” policy that broadened access and created real momentum in vehicle uptake.

AFIA’s findings are reinforced by a recent Deloitte Access Economics report, The Role of the Finance Industry in the Transition to Sustainable Transport, which identifies key barriers to further growth: underdeveloped charging networks, inconsistent government policy, and the phase-out of financial incentives.

“The finance industry is already doing the heavy lifting,” Tate added. “But we can’t do it alone. Without clear, consistent, and future-focused policy from government, we risk losing momentum just as the shift is accelerating.”

AFIA is calling on policymakers to reinstate the FBT exemption for plug-in hybrids; fast-track investment in public and private EV charging infrastructure; introduce upfront discounts and subsidies for EV buyers; and launch national campaigns to educate Australians on evolving household energy use and vehicle technology.