EV transition – The Federal Chamber of Automotive Industries has said that the Federal Government should retain targeted demand-side incentives for battery electric vehicles (BEVs) to support Australia’s transition to lower transport emissions.
In its submission to Treasury’s review of the Electric Car Discount. The FCAI said measures such as the Fringe Benefits Tax (FBT) exemption remained an important complement to the New Vehicle Efficiency Standard (NVES), which is a supply-side measure.
FCAI chief executive Tony Weber said that sales results have shown that the FBT exemption has played an important role in encouraging consumers to purchase an electric vehicle.
“Manufacturers have responded to the NVES by expanding the range of BEVs available. With more than 100 models now on sale,” Mr Weber said.
“Supply-side regulation alone will not deliver the transition. Consumer demand must also be supported. If Australia is to meet its emissions reduction objectives in an affordable and practical way.”
“The Federal Government must consider other forms of demand side incentives if it removes the FBT exemption. These incentives can support the ambitious targets of the NVES by encouraging more Australians to adopt battery electric and other forms of low emissions vehicles.
EV transition slowing down
BEVs accounted for 8.3 per cent of new vehicle sales in 2025. Demand is sensitive to upfront cost, total cost of ownership and access to charging infrastructure.
“As NVES targets tighten over coming years. Changes to demand-side incentives must be carefully designed. To improve accessibility and avoid undermining consumer confidence,” Mr Weber said.
International experience shows that abrupt removal of incentives can lead to declines in electric vehicle uptake.
The FCAI recommends that the Federal Government:
- continue demand-side incentives to complement the NVES
- ensure any reform of the FBT exemption improves accessibility for consumers
- extend tariff exemptions to include electrified light commercial vehicles
The FCAI’s submission can be viewed here
