Most electric cars currently available in Australia will still be eligible for the full Electric Car Discount, meaning crucial cost of living relief for everyday Australians, under staged modifications announced by the Federal Government today.
The Electric Vehicle Council has welcomed the Federal Government's announcement on the Electric Car Discount, describing the outcome as a win for Australian families who will continue to have access to the full Discount for the majority of EVs for the next three years.
EVC Chief Executive Julie Delvecchio said the decision gives Australians a clear pathway to ditch petrol costs and the certainty to act now – with no changes taking effect until April 2027.
"This is good news for everyday Australians who are doing the sums on going electric," Ms Delvecchio said.
"The Albanese Government and Minister Bowen have listened and shown they understand EVs are a cost-of-living measure. This decision means most electric cars in Australia will remain eligible for the Electric Car Discount, allowing people to save thousands on their annual fuel bills.
"This is especially important for outer suburban households – which are strongly represented in EV leasing uptake – where people drive more and spend more on fuel. Keeping EVs accessible means real savings where it matters most."
Key changes
Under the updated settings:
- No changes will apply until 1 April 2027
- From April 2027:
- EVs priced up to $75,000 will continue to receive the full FBT exemption
- EVs priced between $75,000 and the fuel-efficient LCT threshold (currently ~$91,000) will receive a 25% FBT discount applied to the full vehicle value
- From April 2029:
- All eligible EVs under the LCT threshold will receive a 25% FBT discount, with no current end date
Existing arrangements will be grandfathered, ensuring current EV drivers and leaseholders are unaffected.
Stability for households and industry
The EVC said the extended timeline will continue to support Australians facing cost-of-living pressures and provide financial sustainability for the incentive.
"Electric vehicles are increasingly a cost-of-living solution, saving households around $3,000 per year in fuel and maintenance," Ms Delvecchio said.
"Crucially, most EVs on the market – including popular models from BYD, Tesla and Hyundai – will remain eligible for the full exemption until 2029."
Supporting Australia's 2035 targets
The Council said the Government's decision reflects the importance of maintaining demand-side incentives to complement the National Vehicle Efficiency Standard which is bringing increased supply of affordable EVs to Australia.
These two policies are critical to hitting Australia's target of five million EVs on the road by 2035, in line with advice from the Climate Change Authority.
"Today's decision protects our progress toward the 2035 target and keeps it ambitious but within reach," Ms Delvecchio said.
"From our perspective, the priority is simple – keep policy stable, scale charging infrastructure, and remove barriers so more Australians can switch."
The Council will continue to work closely with the government to monitor EV uptake and ensure policy settings evolve in step with the market.
