Electric incentives: how to save on an EV
The price of the cheapest electric car in Australia is currently double its petrol equivalent.
But within weeks, consumers could unlock over $ 11,000 discounts on their purchases, which would lower costs and, proponents hope, increase adoption of next-generation vehicles.
However, how much they may require will depend on where they buy and register their cars and whether federal opposition parties allow the tax changes to apply.
Industry analysts also argue that action is needed to ensure everyone can access the same discount and ultimately accelerate Australia’s transition to electric vehicles.
University of Canberra associate professor Dr Yogi Vidyattama of the National Center for Social and Economic Modeling welcomes the tax cuts on electric vehicles outlined in last week’s federal budget.
“Hopefully this will help people overcome the first hurdle which is price,” he says. “This is the beginning.”
The budget included details of the $ 345 million discount on electric vehicles, a proposal currently under consideration in the Senate.
It would eliminate the employee benefit tax and 5% import duties for electric and hybrid vehicles that cost less than $ 84,916.
Consumers who buy an electric vehicle at a salary sacrifice could save up to $ 4,700 under this proposal, while employers who buy fleets could save $ 9,000 per car.
According to Dr Vidyattama, the analysis shows that the discount, combined with state government incentives, could convince an additional 10% of Australians to invest in an electric vehicle now rather than later.
“The bottom line is that 10% are middle-income people,” he says.
“It will allow people in areas that don’t usually buy this type of vehicle to buy this vehicle.”
But their purchase decision can also depend on where they live.
All states and territories offer a combination of one-time discounts, stamp duty, and registration discounts to encourage the purchase of more EVs.
The most generous discounts are offered in the ACT, where first-time buyers could unlock savings of up to $ 6,708 if they accepted an interest-free loan offer of $ 4,092.
EV Council data shows NSW drivers are next with savings of up to $ 4,500, followed by Queensland ($ 3,864), Western Australia ($ 3,500), Australia South Australia ($ 3,414) and Northern Territory ($ 2,465) ).
Tasmania only offers a one-time discount of $ 2,000, while Victoria’s $ 3,000 discount is offset by a road use fee that the Electric Vehicle Council estimates will cost drivers $ 1,612 over five years.
Samantha Johnson, chief executive of Polestar Australia, said the combination of incentives could have a “huge impact” on the adoption of electric vehicles in Australia.
However, it advocates a simplified approach to ensure shoppers know exactly how much they can save.
“It’s good that states have been proactive in implementing incentives, but we need a nationalized approach to those incentives,” he says.
“They are very different in each state. It can be confusing for consumers and also for companies to administer.
“(We need) a nationalized approach to any incentive, be it discounts, stamp duties, registration, green loans or insurance subsidies and just to make sure it’s very, very easy for people to understand what they are.”
Ms Johnson said Australian governments must take urgent and decisive action to encourage the adoption of environmentally friendly vehicles, as the country is “far behind the rest of the world”.
Electric cars currently account for 3.39% of new vehicle sales in Australia.
In the UK they account for 16.9% and in Norway 83.7%.
“We have a lot to catch up,” says Ms. Johnson.
“We cannot go at the same pace as other countries. We have to go at a much faster pace to recover ”.
Pavina Adunratanasee, head of intelligent solutions at Iberdrola Australia, says research shows that reducing electric vehicles for consumers is “the most effective short-term lever for increasing sales.”
Speaking at the recent All-Energy conference in Melbourne, he said an analysis of the European, American and Asian markets showed that those with the largest subsidies saw the largest increases in sales.
After the introduction of a $ 10,800 subsidy on electric vehicles in 2020, electric vehicle sales in Germany increased by 260%.
In France, a $ 7,200 grant allowed for a 200% jump.
“We found that there is a direct correlation between purchasing subsidies introduced in various markets (and) sales of electric vehicles,” he said.
But Lindsay Soutar, Greenpeace Australia Pacific’s transport campaign manager, said that while incentives will play a role in the adoption of electric vehicles, changes in national policy could be a more important factor.
An energy efficiency standard, which could penalize carmakers for importing too many high-emission vehicles into Australia, would see more electric car models imported and at a lower cost, Ms Soutar said.
“We know that consumer demand is there and incentives have a role to play, but what is missing is supply.”
“We are very focused on the need for this energy efficiency standard.”
The presentation of the federal government’s National Electric Vehicle Strategy Consultation Paper closes on Monday.