Australia’s Electric Car Discount has helped add more than 100,000 electric vehicles to the national fleet, accelerating EV uptake while cutting emissions and easing cost-of-living pressures, according to the National Automotive Leasing and Salary Packaging Association (NALSPA).
The Electric Car Discount exempts eligible electric vehicles from fringe benefits tax (FBT), significantly reducing costs for novated lease customers.
EV uptake and emissions gains
Since the scheme’s introduction, battery electric vehicle market share has risen from 1.4 per cent in 2021 to 8.3 per cent in 2025.
NALSPA estimates EVs sold under the program are reducing emissions by between 160,000 and 200,000 tonnes of CO2-e emissions annually.
NALSPA chief executive Rohan Martin said the policy has exceeded expectations.
“The Electric Car Discount was introduced to drive up EV uptake, drive down emissions and make EVs more affordable, and it has been a remarkable success for the government on all fronts,” Mr Martin said.
Affordability and household impact
NALSPA said the discount has improved affordability by expanding model availability, reducing average prices by 8.6 per cent and driving a six-fold increase in second-hand EV sales since the policy began.
Mr Martin said the policy is delivering practical cost-of-living relief, particularly for outer-suburban households.
“The policy aimed to add around 5000 EVs to Australia’s roads in its initial years, but its success to date has meant that it’s delivered more than 100,000 EVs and counting,” he said.
“The Electric Car Discount is most popular with outer-suburban families and it is estimated it is responsible for at least half of all EVs sold in Australia today.”
Market still trails overseas peers
Despite the growth, NALSPA said Australia’s EV market share remains about 40 per cent below comparable economies, highlighting the need for continued support.
“With significant cost-of-living pressures persisting, the Electric Car Discount is more important than ever,” Mr Martin said.
“Many Australians tell our members that they simply wouldn’t have made the switch without the EV discount, as barriers like price, charging, and range anxiety persist.”
Meeting climate targets
Mr Martin compared the policy’s impact to incentives that drove early adoption of rooftop solar and home batteries, arguing similar support is needed to normalise EV ownership.
He said Australia risks falling further behind as transport emissions continue to rise.
“The Climate Change Authority says we need 20 times more EVs on the road within the decade to meet Australia’s climate targets,” Mr Martin said.
“Australia cannot overcome these challenges without the Electric Car Discount, which is doing the heavy lifting on our country’s EV transition.”
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