More Australians will be able to access electric vehicles after a landmark deal was reached between the Federal Government and Senate crossbenchers this week, writes Uma Singh.
The Greens and independent senator David Pocock agreed to support Labor’s bill to make EVs cheaper and more accessible to people seeking cleaner and greener modes of transport.
The “Treasury Laws Amendment (Electric Car Discount) Bill 2022” was passed in the Senate, meaning EVs are set to become cheaper in Australia and government fleets will become fully electric.
Under the new scheme, battery electric, hydrogen fuel cell and plug-in hybrid vehicles will be exempt from import tariffs and fringe benefits tax, making the vehicles more affordable for employers to include in salary packages, and encouraging fleet owners to make the switch to EVs.
“These changes are a win for motorists, a win for businesses and a win for climate action,” said Treasurer Jim Chalmers after the passing of the bill.
The new policy could cut the price of some electric vehicles by up to $9000 for businesses, or $4700 for individuals buying a car through salary sacrifice. Savings will be backdated to July 2022, applying to cars retailing below the fuel-efficient luxury car tax threshold of $84,916.
“This is a landmark moment for EV policy in Australia,” said Electric Vehicle Council chief executive Behyad Jafari.
“It is a powerful demonstration of how far we have come in just a few short years.
“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, cutting pollution and an enjoyable driving experience.
“Making new EVs easier to buy will turbocharge the creation of a strong secondhand market for EVs, which is vital for affordability.”
Jafari says new fuel efficiency standards are also imperative to addressing emissions and keeping Australia on the path to greater EV uptake.
“If the Federal Government combines this bill with new fuel efficiency standards, we will soon see a market develop in Australia through which everyone will be able to enjoy the benefits of EVs,” he said.
“By achieving stronger EV uptake, we will significantly lower Australia’s carbon emissions and reduce our precarious dependence on foreign oil.
“On behalf of the electric vehicle sector, I congratulate the government and the crossbench senators for striking this deal in the national interest.”
The Greens and Pocock expressed reservations about the tax cuts applying to plug-in hybrid vehicles, and they included crucial amendments before passing the bill, including phasing out support of petrol-based hybrids on 1 April, 2025, and prioritising zero-emissions EVs in government fleet procurement policy.
“I welcome the government’s constructive approach to meeting me in the middle and excluding plug-in hybrids after 1 April, 2025,” said Pocock.
“This provides fleet companies with certainty and allows the government to deliver on their promise of delivering charging infrastructure during the next three years.”
The Greens and Pocock admit the tax cuts will initially benefit “mostly wealthier Australians” but acknowledge increasing fleet uptake of EVs will enhance the future secondhand electric vehicle market.
“The government fleet will go electric, and when these cars are sold secondhand, it will help bring down the cost of EVs for everyday people,” said Greens leader Adam Bandt.
“The Greens have fast-tracked electric vehicles, and the opportunity is [there] to broaden access to clean, efficient technology of the future.”