Australians considering the switch to EVs to avoid soaring petrol and diesel prices will continue to benefit from the Electric Car Discount (ECD), in a Budget that will help more families step into an electric car.
The Electric Vehicle Council (EVC) said the Albanese Government's decision to continue the Electric Car Discount (FBT exemption) and defer road user charging sent a clear message that EVs help families reduce costs and reliance on expensive, imported fuels.
"This is good news for everyday Australians who are doing the sums on going electric," said Julie Delvecchio, EVC Chief Executive Officer.
"The EVC fought hard to retain the Electric Car Discount and we're glad the Government has listened. Keeping the Discount means more people can continue to access the $3,000 annual savings from lower fuel and maintenance bills by switching to an EV. This is real cost of living relief, particularly for outer suburban households, where people are driving more and spending more at the bowser."
Retaining the Electric Car Discount gives families a pathway to savings
Early reporting suggested the Electric Car Discount was in line to be cut entirely in this year's Budget. Instead, the FBT exemption for EVs will be maintained in full until April 2027, and the majority of EVs will remain eligible for the full discount for another three years.
From April 2027, EV models under $75,000 will retain the full exemption and those between $75,000 and the luxury car tax threshold will receive a 25 per cent FBT exemption. From April 2029, the 25 per cent discount will apply to all eligible EVs below the luxury car tax threshold with no current end date. Popular models from BYD, Tesla and Hyundai will remain fully eligible throughout the transition.
"At a time where petrol is over $2 a litre, switching to an EV is one of the best ways people can confidently save thousands each year. Keeping these savings in place is smart and sensible and gives families the certainty to plan their own EV transition in coming years."
"In choosing to extend the Electric Car Discount and phase it down gradually over time, the Government has listened to our growing industry and chosen a sustainable path forward."
Now is not the time for a road user charge
The EVC has also welcomed the Budget's deferral of road user charging for EV drivers.
"A global fuel crisis is not the time to introduce new taxes on motorists," said Aman Gaur, Head of Legal, Policy and Advocacy at the EVC.
"The EVC supports well-designed, well-timed and equitable road user charging. Any road user charging framework should be introduced only when EVs reach 30 per cent of the national fleet, apply to all vehicles, and accurately price for the health and climate impacts of petrol and diesel cars."
The EVC has warned that introducing a charge on electric trucks in the near term would halt that small but growing market before it gains momentum.
More support needed to help get off petrol cars and trucks
While this Budget has been a good step towards electrifying cars, much more needs to be done across freight and passenger cars.
The EVC welcomes the National Competition Policy reforms to accelerate the uptake of zero emissions heavy vehicles.
"Our trucks account for over a quarter of our road transport emissions and almost entirely run on diesel, making freight one of the largest opportunities for cutting fuel costs and reducing emissions," said Dr Alina Dini, Head of Energy, Infrastructure and Commercial at the EVC.
"Moving to electric trucks boosts productivity and creates cleaner, quieter neighbourhoods. We have advocated targeted incentives that help lower the price premium of electric trucks, and the cutting of red tape preventing more electric trucks getting on the road. We call on the Government to back the commitment to accelerate the uptake of electric trucks with tangible actions that support Australian truckies to make the switch."
The EVC said the Government should turn its attention to supporting low-income workers to unlock the savings of stepping into electric cars.
"Lower income Australians bear the brunt of petrol price increases when driving older and less fuel-efficient petrol and diesel vehicles," said Mr Gaur.
As reported by the economic thinktank, e61, lower income Australians spend proportionally six times as much of their income on transport costs as high income Australians. During a fuel price crisis, the EVC is urging government to help lower income Australians get off expensive petrol cars with incentives to switch into an EV.
"This fuel crisis has uncovered how dependent our country is on imported fuel and it's essential now that the Government take greater steps to help families and business move into electric cars and trucks," said Ms Delvecchio.
About us:
The Electric Vehicle Council is the peak national body representing the electric vehicle industry in Australia. Representing members from across the value chain of the electric vehicle sector, the EVC is a trusted advisor and advocate to governments and decision makers across Australia. Our mission is to drive investment and awareness to accelerate the electrification of transport, for a more sustainable and prosperous Australia.
