FLEETDRIVE
PHEVs in Australia Post-FBT Concession: Down, But Not Out
WORDS BY REDBOOK AUSTRALIA
With the removal of Fringe Benefits Tax( FBT) concessions for Plug-in Hybrid Electric Vehicles( PHEVs) on April 1, 2025, Australia’ s vehicle market faces a pivotal shift. While much of the narrative around new energy vehicles( NEVs) has centred on the ascendancy of Battery Electric Vehicles( BEVs) and Hybrid Electric Vehicles( HEVs), the future of PHEVs remains less certain— yet potentially more relevant than it appears at first glance.
Market Transition: NEVs Rise as ICE Declines
RedBook forecasts show Australia’ s NEV penetration will surge from just 8 % in 2021 to 35 % by the end of 2025. Internal Combustion Engine( ICE) vehicles are expected to fall to 65 % market share, down 27 percentage points in just four years. The biggest gainers have been HEVs, jumping 13 points, while BEVs and PHEVs gained 9 and 5 points respectively.
However, BEV growth appears to be flattening, particularly as supply catches up with demand, pushing prices down and margins tighter. Meanwhile, HEVs continue to find favour among cost-conscious and infrastructure-aware consumers.
PHEVs, though growing more slowly, could be at the start of a second act – especially in Australia’ s regional and rural contexts, where charging infrastructure lags behind urban centres.
The Regional Case for PHEVs
RedBook’ s outlook points to a persistent role for PHEVs, and that argument gains strength when factoring in Australia’ s geography. In many regional cities and rural areas, fast-charging infrastructure remains underdeveloped, and range anxiety continues to deter potential BEV buyers. PHEVs offer a practical compromise:
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