Electric Vehicles and Novated Leasing

While I am waiting for a new 2012 Toyota Prius to have its novated lease approved I thought I’d share a conundrum that I discovered when doing my research for a new vehicle prior to locking in another Prius.

One option that my wife and I had on the table has to retain the 2008 Toyota Prius and obtain a new all electric vehicle such as the Mitsubishi iMIEV or Nissan Leaf. Unfortunately, the Prius plug-in hybrid is not yet available in Australia so that wasn’t an option. Anyway, as part of the operating cost budgeting you need to estimate how much fuel you will use over the course of the year. For the lease just concluded I made the estimate based upon:

• travelling 25,000km in a year,
• 45 litre tank in the Prius,
• premium unleaded fuel at approximately $1.80 per litre,
• 4.8l/100km average fuel economy.

However, with electric vehicles petrol does not factor in at all but it also seems to confuse things with novated leases. With traditional petrol vehicles, you would have to submit your petrol tax invoices but you would not have that for electric vehicles. When I called up the company that manages my salary package to ask how claiming electricity might work. Unfortunately, there didn’t seem to be an  answer which eventually culminated in referring me to the ATO.

At this stage, I’ve not called the ATO about it given that I ended up choosing a new Prius but it seems like this could be a gap that needs to be addressed for leased electric cars particularly if they become more popular and prices come down. You might need something like a power meter to measure the amount of power used to recharge the vehicle and the corresponding tariff which could already add a huge level of complexity. Admittedly, things could be complicated if a house has a solar panel array that captures enough energy in excess of the household consumption making the recharging of the vehicle cheaper or free but still claimable as a running cost against the lease.

Sure, this may not be a huge issue right now but it has potential to become larger in the future.