- The PHEV exemption will be phased out in 2025.
- Federal government fleet to go electric
- FBT exemption for fleet
The federal government has pushed a compromise through the Senate to deliver on its election promise of incentives to make electric cars affordable.
Labour’s bill was blocked by a crossbench objection to the inclusion of plug-in hybrids (PHEV).
Greens senators and the independent senator for the ACT, former rugby union player David Pocock, agreed a deal to end the exemption on PHEVs in April 2025. More than EV driving range for rural buyers.
Some car companies expect 2025 to be an inflection point where EVs pass the cost of internal combustion engine (ICE) vehicles, though COVID-19 may put a premium on that.
The government has agreed to buy vehicles with internal combustion engines only where absolutely necessary. EV lobbyists often tout the idea that a government fleet of EVs would spur the creation of a second-hand market, which would help buyers who can’t afford a new car.
Greens lower house MP Adam Band agreed, claiming the policy as a victory for his party, which made the final amendments to clear the way through the Senate. “The government fleet will go electric and this will help bring about when these cars are sold second-hand. [down] EV value for everyday people,” he said.
Senator Pocock echoed Bandit’s sentiments. “Tackling high EV prices requires bold and decisive action.”
The policy is expected to reduce the price of cars like the BYD Atto 3, MG ZS and Nissan Leaf by between $1000 and $2000 for retail buyers, with import charges eliminated. Fleets will see huge discounts in the form of Fringe Benefits Tax exemptions. The government said earlier this year that car sacrifices could save up to $4700 for employees and up to $9000 for businesses.
The bill is dated July 1, 2022, and the concessions are in addition to the available concessions offered by states. The exemption applies to vehicles under the luxury car tax threshold of $84,916
Opposition estimates the bill costs $4.5 billion over the next decade, though it’s unclear whether the incentives will last that long.
Labour’s Jim Chalmers, speaking on the package, said: “The Government has worked in good faith with the crossbench on the amendments. These changes are a win for motorists, a win for business and a win for climate action.”
The policy win comes after a positive week after the COP27 climate summit in Egypt, with other countries praising the new government for making it easier to act on climate than the previous one.
“This is a historic moment for EV policy in Australia. It’s a powerful demonstration of how far we’ve come in just a few short years,” said Electric Vehicle Council Chief Executive Bahad Jafri.
“This bill will allow thousands more Australians to get behind the wheel of an EV where they can access the benefits of lower fuel bills, reduced pollution, and a more enjoyable driving experience.
“Making it easier to buy new EVs will turbocharge the creation of a robust second-hand market for EVs, which is vital to affordability.
“If the federal government combines this bill with new fuel efficiency standards we will soon see a market develop in Australia where everyone can enjoy the benefits of EVs.
“By achieving strong EV uptake we will significantly reduce Australia’s carbon emissions and reduce our precarious dependence on foreign oil.”