By Australian Finance & Loans

04/01/2026 Right now, over 500 petrol stations across Australia have run out of at least one type of fuel. Petrol in Sydney has pushed past $2.57 per litre. Diesel in parts of the northern beaches has cracked $3.00. Regional service stations are rationing what they have left, farmers are sounding the alarm on food price increases, and the federal government has declared a "national crisis" while releasing 762 million litres from emergency fuel reserves and slashing the fuel excise in half from 1 April.
This is not a forecast. This is today.
And while millions of Australians are sitting in fuel queues watching the dollars climb on the bowser display, a growing number of drivers are plugging in at home, topping up from rooftop solar panels, and spending close to nothing on fuel. The difference between those two realities has never been wider, and the financial case for getting into an electric vehicle has never been stronger.
At Australian Finance & Loans, we work with a panel of 50+ lenders to help Australians find the right vehicle finance for their situation. Whether you are looking at a novated lease, a standard car loan, a chattel mortgage or another finance structure, we compare across the market as an independent brokerage operating under the AFG network. We are not a lender. We are not a novated lease company selling our own product. We work for you.
What Is Actually Happening With Fuel Prices in Australia?To understand why so many Australians are suddenly looking at EVs, you need to understand what is driving the crisis at the bowser, because this is not a normal price cycle.
On 28 February 2026, the United States and Israel launched military strikes on Iran. Iran retaliated by effectively closing the Strait of Hormuz, a narrow waterway off the Iranian coastline through which roughly 20% of the world's seaborne oil supply passes every day. The Islamic Revolutionary Guard Corps has attacked merchant ships, warned that any vessel attempting to pass will be targeted, and tanker traffic through the strait has dropped to near zero.
This is not a minor disruption. The International Energy Agency has called it the largest supply disruption in the history of the global oil market. Brent crude oil surged past US$120 per barrel at its peak, the IEA coordinated a record release of 400 million barrels from global emergency stockpiles, and analysts at some of the world's biggest banks have warned that prices could push toward US$170 to US$200 per barrel if the strait remains closed into the second quarter.
For Australia, the consequences are particularly severe. We import roughly 90% of our refined fuel. We have just two operating refineries (Ampol's Lytton in Brisbane and Viva Energy's Geelong in Victoria) that meet less than 20% of national demand. Our fuel reserves sit at around 26 to 38 days depending on the product, well below the IEA's recommended 90-day minimum. We have not met that 90-day target since 2012.
When the conflict began, petrol prices across Australia's five largest capital cities jumped nearly 50 cents per litre within two weeks. The ACCC has raised concerns that retail prices surged in line with or even ahead of wholesale costs, rather than showing the usual lag. Melbourne has seen averages around $2.53 per litre, with peaks pushing past $2.59. The national weekly average hit an all-time high of $2.19 per litre according to Australian Institute of Petroleum data in late March, with capital city prices well above that.
The government responded by announcing a temporary halving of the fuel excise from 52.6 cents to 26.3 cents per litre, effective 1 April 2026 for three months. But as the NRMA and other commentators have pointed out, a similar cut during the Ukraine crisis in 2022 was barely felt at the bowser. With petrol prices already up more than 30 cents in recent weeks alone, the excise cut may simply slow the bleeding rather than reverse it.
Meanwhile, six oil shipments bound for Australia in April have already been turned back or deferred. Energy Minister Chris Bowen has acknowledged that if the disruption continues past mid-April, the situation could deteriorate further. The government has also lowered fuel quality standards for 60 days to allow higher-sulphur fuel into the domestic market, a move that adds roughly 100 million litres per month, or less than a single day of national consumption.
The bottom line is this: Australia's fuel supply is structurally fragile, and the current crisis has exposed exactly how thin the margins are. Even if the Strait of Hormuz reopens tomorrow, the damage to supply chains, insurance markets and refinery operations means prices are expected to remain elevated for months.
Why Electric Vehicles Are the Stability PlayAgainst this backdrop, the financial case for an EV is no longer just about saving a few dollars at the pump. It is about removing yourself from a system that is fundamentally exposed to events on the other side of the world.
When you drive an electric vehicle, your "fuel" cost is the price of electricity. In most of Australia, that sits between 3 to 6 cents per kilometre. For drivers with rooftop solar (and Australia leads the world in per-capita residential solar installations), the cost drops even further, often to near zero during daylight hours.
Compare that to a petrol vehicle at current March 2026 prices. At $2.50 per litre with average fuel consumption, a typical driver is paying somewhere between 15 to 22 cents per kilometre. That is three to seven times more than an EV, and the gap keeps widening every time global oil markets shift.
Recent data from EV charger manufacturer Evnex, based on over 5,000 chargers across Australia, shows that the average EV driver saves approximately $2,820 per year on fuel alone compared to a petrol vehicle. Over a five year finance term, that is more than $14,000 in fuel savings before you even factor in the lower servicing costs of an EV (no oil changes, no exhaust system, fewer brake replacements, no spark plugs, no timing belts).
And here is the critical point that gets lost in the noise: none of these savings are affected by what is happening in the Strait of Hormuz, or in OPEC boardrooms, or in the next geopolitical flashpoint. Your electricity cost is set by your local energy provider and, if you have solar, by the sun. It is domestic, predictable and largely within your control. Petrol is none of those things.
Australians Are Already Voting With Their WalletsThe shift is not theoretical. It is happening right now, and the numbers are striking.
Battery electric vehicle sales in Australia hit a record 11.8% market share in February 2026, with over 11,100 EVs sold in a single month. That is nearly double the 5.9% share recorded in February 2025, a 95.9% year on year increase in sales volume. Year to date through February, approximately 18,543 EVs have been sold, almost double the 9,516 in the same period last year.
At the same time, sales of petrol vehicles dropped more than 17% in February. China overtook Japan as the largest source of new vehicles sold in Australia for the first time since 1998, largely driven by the growing popularity of affordable Chinese EV brands.
The Tesla Model Y led the charge with nearly 3,000 sales in February alone, triple the figure from a year earlier. BYD delivered close to 3,000 EVs in the same month across models including the Sealion 7, Atto 3 and the budget-friendly Atto 1. The Zeekr 7X recorded 628 sales in just its second month on Australian roads.
Industry forecaster JET Charge predicts between 167,000 and 195,000 EV and PHEV sales for the full year of 2026, equating to around 13 to 15% overall market share. If the fuel crisis persists, those numbers could go higher.
How to Finance an Electric Vehicle in AustraliaGetting into an EV does not have to mean paying cash up front. There are several finance options available, and the right one depends on your employment situation, how you use the vehicle, and whether you want to maximise tax savings.
Novated Lease (For Employees)A novated lease is a three-way agreement between you, your employer and a finance company. Your lease repayments plus running costs (charging, registration, insurance, servicing, tyres) are bundled into a single regular deduction from your pre-tax salary.
For eligible battery electric vehicles, this is where the numbers get seriously attractive. Under the Australian Government's Electric Car Discount policy, eligible BEVs and hydrogen fuel cell vehicles priced below the luxury car tax threshold ($91,387 for the 2026/27 financial year) are completely exempt from Fringe Benefits Tax when financed through a novated lease. That means 100% of your vehicle costs can be paid from pre-tax income, with no FBT offset required.
The savings are substantial. An employee earning $120,000 per year who packages an eligible EV can save at their marginal tax rate on every dollar of vehicle cost. Depending on the vehicle, lease term and kilometres driven, annual savings typically range from $4,000 to $11,000 per year. Over a three to five year lease, total savings can reach $15,000 to over $40,000 compared to purchasing outright or financing a petrol equivalent.
A few key rules to be aware of in 2026. Only full battery electric vehicles (BEVs) and hydrogen fuel cell vehicles qualify for the FBT exemption. Plug-in hybrids (PHEVs) lost their eligibility on 1 April 2025. The vehicle must be valued below $91,387 including GST, dealer delivery and any pre-delivery accessories. And the entire exemption is currently under a government review that commenced on 6 February 2026, with a report due by mid 2027. A decision to continue, alter or scrap the exemption could come at any time during that window, which is why many advisers are encouraging eligible employees to lock in a lease sooner rather than later.
One thing worth flagging that most guides overlook: even though the employer does not pay FBT on the vehicle, the benefit is still classified as a reportable fringe benefit (RFBA). This appears on your income statement and can affect income-tested obligations like HECS-HELP repayment thresholds, Family Tax Benefit calculations and the Medicare Levy Surcharge. It does not change the overall advantage of the novated lease in most cases, but it is something to model before committing. A good finance broker will walk you through this.
Standard Car LoanIf you are self-employed, a contractor, or your employer does not offer salary packaging, a standard secured car loan is the most straightforward way to finance an EV. You borrow the purchase price, the vehicle is used as security, and you make regular repayments over a set term (typically three to seven years) at a fixed or variable interest rate.
Because EVs hold their value increasingly well in the Australian market and the range of eligible models has expanded significantly, many lenders on our panel now offer competitive rates on EV car loans. Some lenders also offer discounted "green loan" rates for electric and low emission vehicles, which can bring your interest rate down below what you would pay on a standard vehicle loan.
Chattel Mortgage (For Business Use)If you are buying an EV primarily for business purposes (whether you are a sole trader, in a partnership, or operating through a company), a chattel mortgage through a small business loan structure can be a tax-effective option. You own the vehicle from day one, the lender holds a mortgage over it as security, and the interest on the loan plus depreciation of the vehicle can be claimed as business deductions.
This is particularly relevant for small business owners who may not have access to novated leasing but still want a structured, tax-effective way to finance an EV for work.
Consumer Finance and Personal LoansFor buyers who want flexibility without tying the loan to the vehicle as security, an unsecured personal loan is another option. Rates are typically higher than a secured car loan, but there is no risk of the vehicle being repossessed if your circumstances change. This can suit buyers purchasing a used or older EV that may not qualify for a secured loan with some lenders.
Popular EVs to Finance in 2026 (and What They Cost)The range of electric vehicles available in Australia has grown rapidly, and prices have come down considerably. Here are some of the most popular models being financed right now, all sitting well below the $91,387 FBT threshold for novated lease eligibility.
The Tesla Model Y remains Australia's top-selling EV. Pricing starts from around $60,300 before on-road costs, it offers strong resale values, and Tesla recently extended its warranty to five years with unlimited kilometres for new purchases in 2026. The new six-seater Model Y L has also arrived in Australia earlier than expected.
The BYD Sealion 7 has emerged as a serious mid-size SUV competitor, recording over 1,300 sales in February 2026. BYD also offers the Atto 3, the Dolphin, and the budget-friendly Atto 1, which is now Australia's cheapest new EV and recorded its highest ever monthly sales in February.
The Zeekr 7X made an impressive debut with 628 sales in its second month on Australian roads. Other strong options include the MG4, the Polestar 2, the Hyundai Ioniq 5, the Kia EV6 and the Geely EX5. New models are arriving throughout 2026, including electric utes and larger SUVs from brands like BYD, Toyota and Subaru.
EV Wait Times: What to Expect Right NowWith EV demand surging on the back of the fuel crisis, wait times on some popular models have stretched. Here is a rough guide as of late March 2026.
Tesla Model Y delivery estimates have pushed out to around two to four months for some variants. Order holders report being quoted May or June 2026 for orders placed in February. Tesla has also confirmed that Full Self-Driving (FSD) Supervised will be available as a subscription in Australia and New Zealand for customers who order after 31 March 2026, which may accelerate orders ahead of the cutoff.
BYD models generally have stronger supply pipelines and shorter waits. Many models have stock available for near-immediate delivery or within a few weeks, depending on the variant and colour.
For most other brands, the general market average sits at one to three months. Niche or newly launched models may stretch to four to six months. The post-pandemic supply crunch has largely eased, but the current demand spike means popular configurations can sell out quickly.
Getting your finance pre-approved before you order is one of the smartest moves you can make. It means you are ready to settle as soon as the vehicle arrives, and it gives you clarity on your budget before you commit. Our team can help you get pre-approved quickly so you are not scrambling when the call comes that your car is ready.
The FBT Exemption Review: Should You Wait or Act Now?This is the question we are hearing more than any other right now, and the answer depends on your situation. But here are the facts.
The government's formal review of the Electric Car Discount policy commenced on 6 February 2026. The review is due to report by mid 2027, but a decision to continue, change or scrap the FBT exemption can be made at any time during this 18-month window. There is no guaranteed end date, but there is also no guaranteed continuation.
If the exemption is retained, JET Charge forecasts around 195,000 EV and PHEV sales in 2026 at 15% market share. Without it, they predict sales would drop to about 167,000 units at 13% market share. That tells you the market considers the exemption a significant driver of demand, and its removal would have a measurable impact on the value proposition of novated leasing an EV.
If you are an employee whose employer offers salary packaging and you are considering an EV, the case for acting sooner is strong. Locking in a novated lease while the FBT exemption is in place secures that benefit for the full term of the lease, even if the policy changes later. Waiting could mean missing the window entirely.
For buyers financing through a car loan or chattel mortgage, the FBT review is less directly relevant. The financial case for an EV through those channels is driven primarily by fuel savings and running cost advantages, both of which are getting stronger by the week as petrol prices remain elevated.
This Is Not Just About Saving Money. It Is About Removing Risk.The 2026 fuel crisis has taught Australia a lesson that many drivers will not forget in a hurry. Our fuel supply chain is fragile, import-dependent and exposed to conflicts we have no control over. The Strait of Hormuz crisis has shown that a single geopolitical event on the other side of the world can send petrol prices soaring past $2.50, empty hundreds of service stations, and put farmers, freight operators and everyday commuters under serious financial stress within days.
An electric vehicle does not make you immune to every economic shock. But it does remove the single biggest variable cost in most household transport budgets, and it replaces it with something predictable, domestic and increasingly affordable. Whether you charge from the grid, from rooftop solar, or a mix of both, you are no longer at the mercy of global oil markets.
And with EV prices falling, more models arriving, and finance options that can save you thousands per year in tax through a novated lease or deliver competitive rates through a standard car loan, the barriers to entry are lower than they have ever been.
Frequently Asked QuestionsCan I finance an EV if I am self-employed?
Yes. Self-employed Australians can finance an EV through a chattel mortgage, a standard car loan or a personal loan depending on their circumstances. While the FBT exemption through a novated lease is only available to employees whose employer offers salary packaging, there are still strong financial reasons to choose an EV as a self-employed buyer, including lower running costs and potential green loan discounts.
What happens if the FBT exemption is scrapped?
If you have already locked in a novated lease on an eligible EV while the exemption is in place, the benefit applies for the full term of that lease. If the exemption is removed before you start a lease, the novated lease structure is still available but the FBT savings would no longer apply to new arrangements. This is why timing matters.
Are there EVs available under $40,000?
Yes. The BYD Atto 1 (also known as the Seagull) is now available in Australia and is the cheapest new EV on the market, starting from around $25,000 to $30,000 depending on the variant and on-road costs. The BYD Dolphin Dynamic starts from around $38,890 drive-away. Both sit well below the FBT threshold and are popular choices for novated leasing.
How much does it cost to charge an EV at home?
Based on average Australian electricity rates, home charging an EV typically costs between 3 to 6 cents per kilometre. For a driver doing 15,000 kilometres per year, that works out to around $450 to $900 per year in electricity. If you have rooftop solar and charge during the day, the cost can be significantly less. Compare that to petrol at current prices, where the same distance would cost between $2,250 and $3,300 per year or more.
Do I need a special home charger?
You can charge most EVs from a standard household power point (albeit slowly). Most EV owners install a dedicated wall charger (Level 2) for faster and more convenient home charging. The cost of a home charger and installation typically runs between $1,500 and $3,000, and some state incentives may help offset this cost. The charger itself cannot be included in a novated lease, but the electricity cost of charging can be.
Is now actually a good time to buy an EV?
From a financial standpoint, the combination of record high fuel prices, the FBT exemption still being available (for now), a wider range of affordable models, improving charging infrastructure, and lower running costs makes 2026 one of the strongest value propositions for EV ownership Australia has seen. The key risk is waiting too long and potentially losing access to the FBT exemption if the government review leads to changes.
Ready to Explore Your EV Finance Options?Whether you are looking at a novated lease to maximise your tax savings, a car loan with a competitive rate, or a business loan for your business, the team at Australian Finance & Loans can help you compare options across 50+ lenders and find the right fit for your situation.
We are an independent brokerage. We do not sell our own products. We compare the market and work for you.
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