The federal government has announced a review of its electric vehicle (EV) discount, a policy that has benefited almost 100,000 Australian drivers since its introduction in July 2022.
The scheme currently exempts EVs priced below $91,387 from Fringe Benefits Tax (FBT) and offers tariff relief on imports from countries without a Free Trade Agreement with Australia.
Treasurer Jim Chalmers said the policy has exceeded expectations.
“The take-up of electric vehicles over the past few years has exceeded expectations and that’s been good for drivers, good for business and good for the climate,” he said.
“The electric car discount has made EVs cheaper to support early adoption, and the next step is to review the policy as we committed to do when we legislated it.”
Public submissions on the review will be accepted until February 6, 2026. While the government has not indicated whether the discount will be extended or amended, stakeholders continue to highlight its role in boosting EV uptake.
Industry voices support continuation
Rohan Martin, chief executive officer of the National Automotive Leasing and Salary Packaging Association (NALSPA), said the FBT exemption has been crucial in encouraging Australians to switch to electric vehicles.
“It is working exactly as Parliament intended, helping reduce transport emissions, easing cost-of-living pressures, and increasing the availability of affordable used EVs,” he said.
Part of broader emissions strategy
The review follows a series of government measures aimed at lowering vehicle emissions. The National Vehicle Emissions Standard (NVES), introduced on January 1, 2025, imposes penalties on automakers who exceed CO₂ limits, while the recently launched Vehicle-to-Grid Network encourages EV and plug-in hybrid owners to feed electricity back into the national grid.
Prime Minister Anthony Albanese has also floated the removal of the Luxury Car Tax entirely, potentially extending benefits to a wider range of low- and zero-emission vehicles as part of ongoing negotiations on a Free Trade Agreement with the European Union.
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