Australia’s finance boom: $6 billion in 2024 as electric and hybrid vehicle funding surges
16 June 2025
Demand for low-emissions vehicles is surging, with over $6.17 billion in electric and hybrid vehicle finance delivered in 2024—a 50% year-on-year jump, according to new data from the Australian Finance Industry Association (AFIA).
This financing boom supported the purchase of 104,835 electric and hybrid vehicles, up from just 64,288 in 2023—an extraordinary increase that underscores a clear shift in how Australians choose to move.
AFIA’s latest Electric Vehicle & Hybrid Finance Report shows that consumers and businesses alike are embracing lower emissions vehicles, despite ongoing challenges in infrastructure and policy. Hybrid vehicles continue to lead adoption, with 60,083 hybrids financed in 2024 compared to 44,752 fully electric vehicles.
AFIA CEO Diane Tate said the figures reflect the practical decisions Australians are making as they transition towards cleaner transport.
“Hybrid vehicles remain a popular choice for customers who want to make the move into lower emissions transport, but don’t have easy access to charging infrastructure or still rely on the convenience of petrol back-up for travelling longer distances. This choice is sensible for many Aussies, particularly while public and private charging infrastructure improves,” Ms Tate said.
“At the same time, we’re seeing steady and growing confidence in fully electric vehicles. Our members are making it easier for both households and businesses to make the switch.”
Commercial finance is powering the transition, accounting for the majority of growth in 2024. AFIA members financed 82,617 commercial vehicles, up 62% from 51,560 in 2023. Novated leasing remains a major driver, representing nearly 70% of all transactions.
“Finance is critical to turning good intentions into real outcomes. It removes upfront cost barriers and gives more Australians access to vehicles that are cleaner, cheaper to run, and increasingly affordable,” Ms Tate said.
Commercial finance is powering the transition, accounting for the majority of growth in 2024. AFIA members financed 82,617 commercial vehicles, up 62% from 51,560 in 2023. Novated leasing remains a major driver, representing nearly 70% of all transactions.
These findings align with a recent AFIA-commissioned report by Deloitte Access Economics, The Role of the Finance Industry in the Transition to Sustainable Transport, which identifies key barriers to EV and hybrid vehicle uptake, including underdeveloped charging infrastructure, fragmented policy settings, and the phasing out of financial incentives.
“The finance industry is already doing the heavy lifting to fund Australia’s transition. 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,” Ms Tate said.
“To provide Aussies with options that suit their transport needs, we must bring back the FBT exemption for plug-in hybrids, fast-track public and private charging infrastructure projects, introduce upfront discounts and price subsidies that have proven to be effective overseas, and raise awareness of how household energy models will change in the future, and thus support economic and energy transition.”
Additional Data: Early 2025 Shows Impact of FBT Policy Change
While 2024 closed with record-breaking numbers, early 2025 has already revealed the sensitivity of the market to policy shifts. Following the announcement of the end of the Fringe Benefits Tax (FBT) exemption for hybrids and plug-in hybrid electric vehicles (PHEVs), vehicle sales in this category saw a sharp decline in April 2025.
Hybrid new business value dropped by 47.2 per cent, and the volume of hybrid vehicles financed fell by 40 per cent compared to March 2025. This downturn followed a rush of consumer activity in March, as buyers moved quickly to secure vehicles ahead of the policy change—sending hybrid new business more than doubling year-on-year during that month.
“These figures further highlight the role that financial incentives and policy consistency play in accelerating or hindering Australia’s transition to lower-emissions transport,” Ms Tate said.
“This has been an effective policy from the government, who set out to increase the number of EVs on our roads by making them easier to afford for Australians.
“The decrease in PHEVs being financed after losing the exemption shows that the policy is still required to drive lasting changes in consumer purchasing behaviour.”
NOTES
Hybrid vehicles are powered by both a petrol-fuelled internal combustion engine and a battery-powered electric motor that can work either independently or simultaneously. Hybrid vehicles recharge their batteries through regenerative braking. Plug-in hybrid vehicles are powered primarily by an electric motor and will only use its internal-combustion engine as a back-up should your electric motor’s battery run out of power. They can be recharged by plugging into an external power source. Plug-in hybrid vehicles also have a larger battery capacity, allowing them to travel further on electric power alone.
MEDIA CONTACT
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ABOUT AFIA
AFIA is the only peak body representing the entire finance industry in Australia.
We represent over 150 members, including banks, finance companies, fintechs, providers of vehicle and equipment finance, car rental and fleet providers, and service providers in the finance industry. We are the voice for advancing a world-class finance industry and our members are at the forefront of innovation in consumer and business finance in Australia. Our members finance Australia’s future.
We collaborate with our members, governments, regulators, and customer representatives to promote competition and innovation, deliver better customer outcomes and create a resilient, inclusive and sustainable future. We provide new policy, data and insights to support our advocacy in building a more prosperous Australia.
See the PDF version of this Media Release here.
View the report in full here.