Cupra buyers plug in

CUPRA Formentor buyers are opting for the plug-in hybrid electric version of the SUV in record numbers, with the VZe PHEV model now outselling the VZx performance option.

The Spanish brand’s plug-in hybrid SUV previously accounted for “one in five” sales, but now attracts “more than double” that number thanks largely in part to tax benefits being passed on by the federal government.

The Fringe Benefits Tax (FBT) exemption currently applies to plug-in hybrid models and means that a customer who takes on a Formentor VZe through a novated lease program may actually end up with lower repayments for their $64,990 +ORCs SUV than if they were to opt for the base model Formentor V ($51,990 +ORCs).

The legislation, however, is currently scheduled to change from 1 April 2025, whereby PHEV models will no longer “be considered a zero or low emissions vehicle under FBT law”.

Jeff Shafer, Cupra Australia product and marketing manager, said the brand knows there are buyers who are choosing plug-in hybrid tech because of the financial incentives - and he wants to assure customers there will be stock available up until the cut-off point.

“The current timing - April 1st next year - is when the FBT finishes up on plug-in hybrids, but there's also some commentary about what's going to happen in that space.

“I think there's a few variables that we'll have to take into consideration but I think that not everybody is in the position where a BEV is right for them today. And I think plug-in hybrids are a solution for some people in their circumstances. Particularly when you have 100 kilometres of EV range you're very much in that space (of 'largely' electric driving),” he said, referring to the updated Formentor PHEV which will see a big battery capacity upgrade to allow a claimed 100km of EV driving, as well as 50kW DC fast-charging capability.

However, for current Formentor (and Leon) plug-in hybrid models, AC is the only charging option, but for many, that’s all they will need, as the car is primarily designed to be charged at home or work, with the EV range - 58km for Formentor, 67km for Leon - offering enough for the daily commute.

“Charging is much easier in terms of the smaller battery which means that you're not necessarily looking for a (charging station) always or even, for example, with our office, we've got AC charging available to staff to charge at work so we can have an employee plug in a hybrid, charging up while at the office. Even if they're renting, even if they don't have off-street parking at home, they can still actually get the benefits of charging in a way that's probably more practical than full BEV,” he said.

Ben Wilks, Cupra Australia brand director, said that customer feedback has shown that Cupra buyers understand the technology and the benefits that can be seen for using primarily EV driving, with petrol as an option for longer drives.

“What the real world experiences of these owners is, is fantastic fuel economy, so the opportunity for 50 kilometres of EV range or thereabouts means the average daily commute can actually be accommodated with that car, charged from a household power point overnight,” he said.

“The real-world economy that people are experiencing with that car is fantastic and it makes a really compelling argument. So we've also made sure that we've got enough orders of that car available so that we can still land vehicles this year to meet the demand that we're experiencing for the plug-in hybrid. I think that will still be a really important car for us for this year, and up until (the end of March 2025).

Following on from that, Mr Shafer commented that the current planned cut-off for PHEV FBT exemption could be a sales dip, as demand for that powertrain technology may dry up once the tax regime changes.

“It’s a variable that we will be keeping an eye on. I don't think that it will be any surprise if the FBT exemption finishes on the current timing, that there'll be a market reaction in the months following,” said Mr Shafer.

“But I think what you can see from a lot of these cases where subsidies or incentives end, there's a dip, it's quiet for a little while, and then picks back up.

“So I think by the time we're moving those new (facelifted Formentor and Leon) plug-in hybrids in the market, some of that downturn will have passed and new customers will be coming into the marketplace that weren't necessarily considering the 'before and after' situation and they're really looking at the plug-in hybrids in a sense of what makes sense for them in terms of balancing efficiency and their individual circumstances.

Of note, the brand has confirmed its plans for a novated leasing option for customers, as it currently doesn’t have such a choice. Instead, the company offers a finance package for buyers that includes a guaranteed future value and a weekly repayment calculator on the brand’s stock site.

Mr Wilks said he can’t confirm the exact number of novated leases on Formentor, but the plug-in hybrid mix for the brand’s own financial offering is around 10 per cent, meaning “a lot more people financing in a different way (through external finance businesses and leasing companies).”

However, Mr Wilks pointed out that Cupra will continue to offer sharp deals on in house finance.

“With Cupra Choice, the guaranteed future value program, this is on our website every day. As of the 1st of May 2024, our campaign goes live with 1 per cent finance on Formentor,” he said.

“I really encourage people to jump back to our website, jump on the stock list and look at those prices – the dollars per week with a guaranteed future value over three years at a 1 per cent  interest rate. It's a very compelling offer for customers.

“Equally, customers are also looking at our and our cars via novated leases and that's an exciting place for us to play and that's why we've got the opportunity with Formentor VZe.

You can expect more PHEV models in the coming years, too, with the updated Formentor and Leon, not to mention the potential addition of the Leon Sportstourer PHEV, and the Terramar PHEV.

Mr Shafer said the increasingly electrified range is in line with the brand’s broader plans to be fully electric by 2030.

“We're still looking at around the end of the decade, so 2030, in terms of converting our range (to be full EV).”

“We've got the Terramar coming next year, which is our final new model launch that includes any form of an ICE engine - it has a plug-in hybrid,” he said.

“So it's still on that electrification journey, but we don't have any plans beyond Terramar for new combustion models.

When it comes to full EVs, Cupra currently offers the Born electric hatchback, which will be joined by a new VZ version in 2025, and the all-new Cupra Tavascan electric SUV will also join the ranks next year.