The Australian Labor Government has taken significant steps to promote the adoption of electric vehicles (EVs) through its Electric Vehicle Strategy and related incentives. Here’s a breakdown of the key points:

Electric Vehicle Strategy: The Labor Government introduced its inaugural electric vehicle strategy in September 2022. This strategy likely outlines the government’s overarching goals and plans for promoting the adoption of electric vehicles, improving EV infrastructure, and reducing carbon emissions from the transportation sector.

Treasury Laws Amendment (Electric Car Discount) Bill: This bill, which passed through the Federal Parliament, aims to incentivize the purchase of electric vehicles. It offers a discount of up to $2000 off the purchase price of battery-electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs). This discount could significantly reduce the upfront cost of these vehicles, making them more attractive to consumers.

Luxury Car Tax Threshold Increase: The Luxury Car Tax (LCT) threshold for low-emission vehicles has been raised to $89,332
for the 2023-24 financial year. The Luxury Car Tax is a tax applied to vehicles with a value above a certain threshold. By raising the threshold for low-emission vehicles, the government aims to reduce the tax burden on these environmentally friendly vehicles, making them more affordable for consumers.

Fringe Benefits Tax (FBT) Savings Increase: The savings under the Fringe Benefits Tax (FBT) for electric vehicles have been increased. For employers, the annual FBT savings have been raised to $9000. For individuals with a salary sacrifice agreement for a $50,000 electric vehicle, the FBT savings amount to $4700 per annum. FBT is a tax applied to non-salary benefits provided by employers to their employees. Increasing the FBT savings for electric vehicles encourages businesses and individuals to choose EVs as part of their company car or remuneration package.

Fringe Benefits Tax (FBT) Exemptions: The government is providing exemptions for Fringe Benefits Tax (FBT) on electric vehicles for fleets and novated leases. This FBT exemption reduces the financial burden for businesses and employees who choose electric vehicles as part of their company cars or salary packaging arrangements.

The FBT exemption applies retrospectively to eligible electric cars first used on or after July 1, 2022. This means that electric vehicles purchased and used within a specific timeframe are eligible for the FBT exemption, encouraging the adoption of EVs over a defined period.

Expiry Date for PHEV Offer: The offer of up to $2000 off the purchase price of PHEVs is set to expire on April 1, 2025. This incentivizes consumers to consider purchasing PHEVs within a specific timeframe, further boosting the uptake of these vehicles.

Overall, these measures demonstrate the Australian government’s commitment to accelerating the adoption of electric vehicles by providing financial incentives and exemptions, making them more accessible and attractive to both businesses and individual consumers.