The Hon Jim Chalmers MP, Treasurer
The Hon Chris Bowen MP, Minister for Climate Change and Energy
The Albanese Government has released the terms of reference for the statutory review of the Electric Car Discount.
This policy has helped deliver a car market with more choice and cheaper to run cars for more Australians and has helped motorists slash their emissions and fuel bills for good.
The discount has applied since July 2022, providing a fringe benefits tax exemption and tariff exemption to eligible cars to kick start take up of electric vehicles and help reduce transport emissions in the longer term as part of the Government's broader climate action agenda.
When we came to office, the market for electric vehicles was nascent, with EVs accounting for less than 2 per cent of new vehicle sales in Australia.
Today, industry data show electric vehicles comprise around 10 per cent of new vehicle sales and Treasury estimates almost 100,000 vehicles have benefitted from the fringe benefits tax exemption, with this milestone achieved much sooner than expected.
When we came to Government, there were 56 EVs on the market - now there are over 160.
There were only two EVs under $40,000 - now there are around 10 and, for the first time, one model under $30,000.
New EVs that weren't on the market in Australia before include affordable family SUVs and a price competitive 4x4 ute.
It's no surprise that leasing data shows the strongest uptake of the Electric Car Discount is in outer suburbs like Baulkham Hills in NSW, Werribee in Victoria, and Springfield in Queensland.
The Electric Car Discount works in concert with our New Vehicle Efficiency Standard and over $500 million investment in charging infrastructure. Together, these policies are providing easier access to cheaper to run cars for the Australian market that consumers around the world have enjoyed for years.
The strong uptake of the Electric Car Discount will be reflected in the Mid-Year Economic and Fiscal Outlook (MYEFO), with the value of the tax expenditure for the FBT exemption for electric vehicles estimated to be $1.35 billion in 2025-26.
As required by the legislation, the review will consider the operation of the electric car discount over the first three years it has been in place.
The Australian Centre for Evaluation, in Treasury, and the Department of Climate Change, Energy, the Environment and Water will conduct the review in collaboration with other relevant Commonwealth agencies.
The review's findings will help inform broader policy development on how to continue expanding electric vehicle choices for more Australians and bring transport emissions down.
