Australia’s road to electric vehicle (EV) take-up has been a slow one, blocked by high costs and low availability, stifling the opportunity for the market that came with increased demand. This week a bill was introduced to Parliament that could be a game changer for businesses, but does little to assist the public in the upfront costs of an EV. 

The Treasury Laws Amendment (Electric Car Discount) Bill 2022 was put before the House of Representatives with the goal of making EVs more attainable and more attractive to the Australian public. 

The bill is part of Labor’s election promise to make EV’s more affordable and reduce overall emissions by exempting them from several taxes. 

So far, Australia’s EV takeup has been lacklustre, amounting to just two per cent of the Australian new car market. 

Monash Energy Institute tax law expert Dr Diane Kraal insists that tax tweaks are the way towards moving the market closer to reflect Norway's EV takeup of 74 per cent, with current expenses too high. 

Fleet managers told us the total cost of owning an EV can be twice that of an equivalent car,” Dr Kraal said. 

The strategy is based around incentivising EVs in the work environment through corporate fleets, so that they can begin to trickle into the second-hand market. 

“There is a lack of business site charging infrastructure for EVs. But statistics show that most employees park at home every night, so home charging is a solution to increasing fleet EVs. There are challenging barriers to home-charging fleet EVS, such as tax imposts on driving a car home to charge, home charger costs, and the use of home energy to charge,” Dr Kraal said. 

According to Dr Kraal, making EVs fully exempt from Fringe Benefits Tax (a 47 per cent tax on some electric cars that are provided through work for private use) if they are provided by an employer will propel the industry. 

Under the Labor’s Electric Car Discount election promise, EVs will be exempt from both Fringe Benefits Tax and import tariffs (a five per cent tax on some imported electric cars).

EV chargers have been installed in larger towns around the Western Plains with more to come, but take-up hasn’t necessarily matched the rise in chargers, which are instead seen as a drawcard for tourists who now have the capacity to venture beyond the chargers of the city. 

While the proposed tax cuts could prompt business fleets and in the long term see some EVs enter the second hand market, there is little to make the cars more affordable to the public.

The bill will need to pass the House of Representatives and the Senate before becoming law.