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EV tax rebate loses power as costs overload scheme
The phased rollback will save the budget $1.7 billion over four years and is aimed at cheaper models as EV sales keep rising.
- On Tuesday, Treasurer Jim Chalmers and Energy Minister Chris Bowen announced a phased tightening of electric vehicle tax breaks, limiting full fringe benefits tax exemptions to EVs costing $75,000 or less from April 2027.
- The tax discount, initially forecast to cost about $90 million, ballooned to an estimated $1.35 billion this financial year, prompting the adjustment as Labor attempts to rein in the $36.8 billion budget deficit.
- Vehicles above $75,000 but below the luxury tax threshold will receive a 25 per cent discount instead of full exemption. Bowen said the changes encourage manufacturers to offer more affordable EV models.
- Existing lease agreements will be grandfathered, allowing current participants to remain exempt until their terms end. Bowen predicted EV uptake will remain strong as consumers shift toward more affordable models.
- The Productivity Commission previously criticized the incentive as the most costly policy for reducing carbon emissions, costing up to $20,084 per tonne of CO2 abated. By April 2029, all EVs below the luxury tax threshold will face a permanent 25 per cent discount.
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Total News Sources19
Leaning Left6Leaning Right2Center2Last UpdatedBias Distribution60% Left
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60% Left
L 60%
C 20%
R 20%
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