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A Federal Government entity has spent $60 million to reduce the finance rate of Hyundai and Kia electric vehicles – but not other models.
The Federal Government has spent $60 million to reduce the finance rate on electric vehicle purchases – but the discount will only be available for eligible Hyundai and Kia models.
Federal Minister for Climate Change and Energy Chris Bowen said the Clean Energy Finance Corporation (CFEC), a Federal Government entity, has "committed up to $60 million to partner with Hyundai Capital Australia".
Hyundai Capital Australia is the in-house financing arm of Hyundai Motor Company Australia, offering financial products to its customers as well as sister brand Kia.
The discounted finance rates, which will range between 0.5 per cent and 1.0 per cent, will be available for Hyundai and Kia electric vehicles priced below the current Luxury Car Tax threshold of $91,387.
The Kia EV5 was Australia's fourth-highest-selling electric vehicle in 2025, however, other electric vehicles from the Korean companies struggled against more affordable competition, mostly from Chinese brands.
In a media release, Mr Bowen said a 1.0 per cent discount on a $70,000 electric-car loan would save "more than $1900 in interest costs" over five years.
"This CEFC investment will help lower the cost barrier for households and small businesses, making EV ownership more accessible," the minister said.
The Federal Government continues to offer a fringe benefits tax (FBT) exemption for electric vehicles in novated leases – if they are below the luxury car tax threshold – which is estimated to result in lost tax revenue of $1.35 billion for the current 2025-26 financial year.
It is 18 times higher than the original forecast of $70 million, and the policy is now under federal review.
The FBT exemption for plug-in hybrid electric vehicles (PHEVs) below the Luxury Car Tax threshold ended on April 1, 2025.
Import tariffs for electric vehicles built in countries without a Free Trade Agreement with Australia – such as European built models – and priced below the Luxury Car Tax Threshold were also removed under the Federal Government's Electric Car Discount policy.
Jordan is a motoring journalist based in Melbourne with a lifelong passion for cars. He has been surrounded by classic Fords and Holdens, brand-new cars, and everything in between from birth, with his parents’ owning an automotive workshop in regional Victoria. Jordan started writing about cars in 2021, and joined the Drive team in 2024.
