Plug-in hybrid sales soar amid last-minute rush to claim tax cuts

The Federal Chamber of Automotive Industries (FCAI) VFACTS report for the first half of 2024 shows plug-in hybrid vehicle (PHEV) sales are up nearly 130 per cent compared to last year – and there's a good reason for the increase.

RELATED: Best-selling plug-in hybrid cars in Australia during the first half of 2024

Business buyers are seizing on a runout deal of sorts, ahead of major changes to fringe benefits tax (FBT) laws that will affect plug-in hybrid vehicles.

Currently, plug-in hybrid vehicles are exempt from paying the FBT if they are priced under $89,332, no matter how much the vehicle is used for personal use. However, under changes announced by the Australian Taxation Office (ATO) in March 2024, PHEVs will no longer be considered zero- or low-emissions vehicles from April 1, 2025. Fully electric vehicles will still be exempt after the cut-off date.

The FBT is "a tax paid by employers on certain benefits provided to their employees, or their employees' family or other associates". This applies to work cars that are made available for private use, from tradie utes to fleet vehicles, to cars acquired via a novated lease.

Technically, employers pay FBT, but it can be passed on to employees.

"Although the liability of the tax lies with the employer, that cost can get passed on to the employee if the employer chooses to do so," Mark Chapman, Director of Tax Communications at H&R Block, previously told Drive.

"If the cost is passed on, it’s paid out of employees' after-tax earnings, so ultimately it could mean less salary for employees."

Despite the changes to FBT rules, the ATO claims you can continue to claim the exemption if "use of the plug-in hybrid electric vehicle was exempt before 1 April 2025", or if "you have a financially binding commitment to continue providing private use of the vehicle on and after April 1st, 2025".

With time running out to claim the FBT exemption on plug-in hybrids, it appears businesses and employees are now rushing to acquire PHEVs as employee and fleet vehicles.

If you're tempted to jump on the bandwagon, here are some of the most affordable PHEVs you can buy on the new and used market right now to capitalise on plug-in hybrid tax cuts.

The MG HS Plus EV is one of the most affordable new PHEVs on the Australian market. Boasting a 1.5-litre turbocharged petrol engine and a 90kW electric motor for combined outputs of 189kW and 370Nm, MG claims the HS Plus EV can achieve fuel consumption as low as 1.7L/100km, with up to 63km of electric-only range on a full charge.

The 16.6kWh battery can be recharged to 100 per cent at the maximum rate (using a wall charger) in around 4.5 hours. Meanwhile, a 240-volt home wall socket should take around eight hours.

The MG HS Plus is also backed by a seven-year/unlimited-kilometre warranty, which also covers the battery.

As standard on the HS Plus EV, you get a 10.1-inch touchscreen with Apple CarPlay/Android Auto, a 12.3-inch digital instrument cluster, adaptive cruise control, lane-keep assist, blind-spot monitoring and autonomous emergency braking.

Drive currently has over 70 HG HS Plus examples listed on our marketplace, with used and demo models starting from as low as $31,790 and new options starting at $45,990.

The plug-in hybrid version of the 2024 Eclipse Cross starts at sub-$50,000, and you can choose between three trim levels: the ES, Aspire and Exceed.

As opposed to other affordable PHEVs, the Eclipse Cross uses two electric motors instead of one, meaning you have more power to run the car at a higher speed under electric-only power. These motors combine with a 2.4-litre petrol engine that drives the front wheels, while there is one electric motor on each axle (front and rear) – meaning the Eclipse Cross PHEV is all-wheel drive.

Mitsubishi claims fuel economy of as low as 1.9L/100km, but this will depend on your style of driving. If you're commuting less than 50km a day, then Mitsubishi also claims you can get away with using electric-only power.

Featured across all trim levels is an 8.0-inch infotainment screen with Apple CarPlay and Android Auto, forward collision warning and autonomous emergency braking with pedestrian detection, lane-departure warning, blind-spot warning, lane-change assist, rear cross-traffic alert, adaptive cruise control, automatic headlights, and rain-sensing wipers.

Drive currently has plenty of PHEV Mitsubishi Eclipse Cross examples for sale on our marketplace, with used and demo models starting from as low as $40,880 and new options starting at $47,790.

The all-new BYD Sealion 6 landed in Australia earlier this year, offering another entry into the PHEV market for under $50,000.

Powered by a 1.5-litre four-cylinder petrol engine combined with the DM-i BYD hybrid system, the Sealion 6 Dynamic is good for a combined 160kW and 300Nm. Stepping up to the Sealion 6 Premium brings a turbocharged version of the 1.5-litre and increased outputs of 238kW and 550Nm.

Focusing solely on the base model Dynamic, which costs under $50,000, BYD claims that it can drive up to 1092km on a single tank of petrol and around 80km of electric-only driving on a full charge.

As standard, you get a rotating 15.6-inch infotainment screen with Apple CarPlay and Android Auto, a 12.3-inch digital instrument display, autonomous emergency braking, lane-departure warning and assist, blind-spot warning, rear cross-traffic alert, adaptive cruise control, and a 360-degree camera.

The Sealion 6 is covered by a six-year/150,000km vehicle warranty, and eight-year/160,000km high-voltage battery warranty.

The BYD Sealion 6 range includes two models: the front-wheel-drive (FWD) Dynamic, which costs $48,990 plus on-road costs, and the all-wheel-drive (AWD) Premium, which costs $52,990 plus on-road costs.

The Mitsubishi Outlander remains the top-selling plug-in hybrid in Australia. With pricing starting from sub-$60,000 brand-new, the model also has a long history in the country meaning you have plenty of second-hand models to choose from.

Using a similar drivetrain to the Eclipse Cross, the Outlander uses two electric motors instead of just one. These electric motors combine with a 2.4-litre petrol engine that drives the front wheels, while an electric motor is connected to each axle, allowing for on-demand AWD. With the combination of the two, Mitsubishi claims a fuel consumption of around 1.4L/100km and up to 61km of electric-only range on a full charge.

The size is the main difference between the Eclipse Cross PHEV and the Outlander PHEV. The Outlander PHEV comes with five or seven seats, and has larger overall dimensions.

Featured across all trim levels is Apple CarPlay and Android Auto, forward collision warning and autonomous emergency braking with pedestrian detection, lane-departure warning, blind-spot warning, rear cross-traffic alert, adaptive cruise control and automatic headlights.

The cheapest new Outlander PHEV starts at $57,290 (plus on-road costs). But the used market is plentiful, with 2014-year models starting from as low as $18,000.

In a market dominated by small and mid-sized SUVs, Peugeot offers the 308 GT Sport PHEV, one of the more affordable options in the sporty side of the PHEV market.

The 1.6-litre four-cylinder petrol turbo engine powers the front wheels with help from an 81kW electric motor to produce a combined output of 165kW. This setup is mated with an electronic eight-speed transmission.

Peugeot claims the 308 PHEV uses 1.3L/100km and has a 60km electric-only range on a full charge.

The equipment found in the 308 PHEV is similar to the rest of the range: a 10-inch infotainment system with Apple CarPlay and Android Auto, crash avoidance, cross traffic alert front/rear, brake assist, collision warning, lane keep, parking assistance and a plethora of cameras surrounding the car.

Peugeot currently has an offer running until the end of July to jump into a 308 GT Sport PHEV for $59,990 driveaway. If you are looking to purchase one after the end of the month, the usual price is $64,990 (plus on-road costs).