While most of Australia is busy debating the best way to cook a Christmas prawn or planning their January coastal escape, there is a much quieter—but far more expensive—conversation happening in Canberra.

If you’ve been “thinking about” an electric vehicle for a while, the next 30 days are arguably the most critical window for your bank account since the EV discount was first introduced in 2022.

At EV Evolution, we’re seeing a surge in “Festive Finance” inquiries for one specific reason: The Federal Government has officially put the EV Fringe Benefits Tax (FBT) exemption on the chopping block for review.

With submissions for this review set to close in early February 2026, the “Golden Age” of EV tax breaks is entering a period of massive uncertainty. Here is why your 2026 New Year’s resolution needs to happen in January.

The “100k Club” and the $1.35 Billion Reality

First, let’s look at why this is happening. The Electric Car Discount Act has been a roaring success—far more successful than the government originally predicted.

As of late 2025, Treasury data shows that almost 100,000 Australians have taken advantage of the FBT exemption. When this policy started, the government expected it to cost about $110 million. Instead, the “tax expenditure” for the 2025-26 financial year alone is estimated at a staggering $1.35 billion.

In plain English? The government is helping so many people save money that it’s starting to hurt the budget. This is why the Statutory Review was launched on December 12, 2025.

The Clock is Ticking: Why February 6 Matters

The Australian Treasury and the Department of Climate Change have opened the floor for public submissions. The deadline is February 6, 2026.

This review will determine:

1. Whether the FBT exemption should continue at all.
2. If it does continue, which vehicles will remain eligible.
3. If the price cap (currently the Luxury Car Tax threshold of $91,387) should be lowered.

The EV Evolution Warning: While we hope the incentives stay, the sheer cost of the program suggests that “tweaks” are coming. If the review leads to a decision to wind down the program or lower the cap, those who haven’t locked in their lease could miss out on the greatest tax-saving opportunity in the history of the Australian car market.

Why January is Your “Action Month”

You might be thinking, “If the review closes in February, I have time.” Not necessarily.

In the world of novated leasing and FBT, the date you “hold and use” the vehicle is everything. To guarantee your exemption under the current rules, you want your vehicle delivered and your lease signed before any legislative changes are introduced post-review.

January is the month to act because:

• Delivery Lead Times: While shipping is faster than in 2023, most EVs still take 2–6 weeks to deliver. Ordering in January ensures you are “on the road” before the review findings are debated in Parliament.
• EOFY Preparation: The FBT year ends on March 31. Locking in a lease in January gives you a clean run into the new tax year with your savings already automated.
• The PHEV Precedent: Remember what happened with Plug-in Hybrids (PHEVs)? Their FBT exemption was axed on April 1, 2025. Those who missed the deadline by even a day lost out on thousands. We don’t want to see BEV (Battery Electric Vehicle) buyers face the same “cliff edge.”

The Math: What’s Actually at Stake?

To understand why the “Festive Finance” push is so real, you have to look at the numbers.

A novated lease on a $60,000 EV (like a Tesla Model 3 or a BYD Sealion 7) currently allows you to pay for the car, the insurance, the tyres, and even the electricity using 100% pre-tax income.

The Saving Comparison (Estimated):

• Standard Car Loan: You pay with “after-tax” money. You might spend $320+ per week on the car and running costs.
• FBT-Exempt Novated Lease: You pay with “pre-tax” money. Your take-home pay might only drop by $220 per week.

Over a four-year lease, that $100-per-week difference adds up to over $20,000 in tax savings. If the FBT exemption is removed or altered, that $20,000 “discount” effectively disappears.

Your 2026 Strategy: 3 Steps to Secure Your Saving

If you want to ensure your next car is a tax-effective asset rather than a liability, follow the EV Evolution 2026 Strategy:

1. Check the LCT Threshold: Ensure the EV you want is under $91,387 (the fuel-efficient Luxury Car Tax threshold for FY 25/26). If it’s even a dollar over, you won’t get the FBT exemption.
2. Get a Quote in January: Don’t wait for the beach tan to fade. Get a novated lease quote now so you can see the impact on your specific salary.
3. Prioritize “In-Stock” Models: If you are worried about the Feb 6th deadline, look for brands with local inventory (like Tesla, BYD, or MG) rather than special orders that might arrive too late.

Conclusion: Don’t Let the Review Catch You Out

The Federal Government’s review is a sign of how far the EV market has come. We’ve reached the point where so many Aussies are going electric that the tax breaks are “too successful.”

But for you, the individual driver, 2026 is about one thing: Locking in your lifestyle upgrade while the government is still footing part of the bill.

Enjoy your festive season, but don’t let the fireworks distract you from a $20,000 saving opportunity. Make January the month you move from “maybe” to “managed lease.”

🤖 Ask Our AI: Get the FBT Facts Now

FBT law is complex, and the 2026 review adds a layer of uncertainty. Should you wait? Should you buy outright? How does the “Reportable Fringe Benefit” affect your HECS or child support?

Don’t spend your holidays scrolling through 80-page Treasury documents.

Start a conversation with the EV Evolution AI chatbot! Our AI is updated with the latest December 2025 review announcements and tax thresholds.

Ask our AI chatbot anything about the FBT exemption review & EV tax breaks 2026, such as:

• “What are the specific terms of the February 2026 FBT review?”
• “Will my EV still be FBT exempt if the law changes mid-lease?”
• “Is the BYD Sealion 08 likely to stay under the LCT threshold in 2026?”
• “How much could I save on a novated lease if I sign in January vs. waiting until July?”

Click the chat icon to speak with our AI thought partner and secure your financial future before the February deadline.

About EV Evolution

EV Evolution is the leading online platform dedicated to Australian electric vehicle owners and enthusiasts. We foster a vibrant community, delivering essential EV news and insights, and enhancing user engagement through our innovative, AI-powered chatbot for dynamic discussions. Our mission is to empower Australian electric vehicle owners and enthusiasts by fostering a vibrant, AI-driven online community that connects, informs, and advances the nation’s electric vehicle landscape.