Hyundai and Kia EV buyers to be subsidised: New backing from federal government to lop interest rates on loans
Hyundai and Kia EV buyers are being offered federal government support that will help lower the cost of their purchase.
A new $60 million commitment from the Clean Energy Finance Corporation (CEFC) will be used to reduce finance rates for eligible customers through Hyundai Capital Australia, covering selected fully electric models from Hyundai and Kia priced below the luxury car tax threshold.
Thise models include the Hyundai Inster, Kona Electric, Elexio and Ioniq 5 and the Kia EV3, EV4, EV5 and EV6.
For buyers, the benefit comes in the form of cheaper loan rates rather than a vehicle discount.
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Eligible customers can receive interest rate reductions of between 0.5 and 1.0 per cent on their finance. On a typical $70,000 loan over five years, a 1.0 per cent reduction could save more than $1900 in interest.
The program is funded by the CEFC but delivered via Hyundai’s in-house finance arm, meaning the savings are applied directly to the customer’s loan.
CEFC Executive Director – Debt Markets, Richard Lovell, said reducing finance costs was one of the more practical ways to make EV ownership more accessible.
“By cutting finance costs, we’re not only making these vehicles more accessible, we’re also supporting technologies like vehicle-to-grid, which can turn EVs into mobile batteries and strengthen our energy system,” he said.
Hyundai Capital Australia Chief Executive Officer Donglim Shin said cost remained a key barrier for many buyers considering an EV.
“Working with the CEFC allows us to offer discounted finance on eligible Hyundai Motor Group EVs, making electric vehicle ownership more achievable for Australian customers,” he said.
While the Hyundai and Kia deal is new, CEFC involvement in EV finance is not. The organisation has been backing discounted EV lending programs for years, including a $100 million partnership in 2017 with Macquarie Group through its leasing arm to reduce the cost of financing electric and plug-in hybrid vehicles for businesses and consumers.
It also follows a separate initiative announced in late 2024, where the CEFC supported a low-interest EV loan scheme with the Commonwealth Bank of Australia aimed at cutting borrowing costs for new and used electric vehicles and home charging equipment, particularly for essential workers and lower-income earners.
According to the Climate Change Authority, Australia would need more than five million battery electric passenger vehicles on the road by 2035 to meet emissions reduction targets, with roughly half of all new vehicle sales between now and then needing to be electric.
Since its inception, the CEFC says it has supported finance for more than 17,000 EVs worth over $1 billion, as well as electric trucks, buses and fleet vehicles as part of its broader clean transport investment strategy.
New EV sales broke through the 100,000 annual barrier in 2025. In a static market, this grew BEV’s share slightly from 7.4 per cent to 8.3 per cent.
