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Electric vehicles to charge ahead with federal budget incentives

With entry-level EVs such as Nissan’s Leaf priced about $49,990 before on-road costs, the strategy has worked in the United States and Europe, where overall fleet emissions regulations have flooded the used-car market with early-generation electric vehicles or plug-in hybrids from fleets. EVs are expected to reach price parity with petrol cars by the mid 2020s.

New economic analysis of the industry, to be published next week, has calculated the average Australian electric vehicle driver already pays more tax, across federal and state charges, than a combustion engine driver – despite avoiding fuel excise.

The analysis, by Ernst & Young for the Electric Vehicle Council, found the technology would provide a net government revenue benefit of $137 a vehicle each year, and $8763 over a 10-year lifespan.

In addition it found electric vehicle drivers make a significant contribution to the economy by lowering pollution and boosting collective respiratory health.

Council chief executive Behyad Jafari said the research dispelled the argument that when someone replaced their petrol engine vehicle with an electric car they reduced their tax because they no longer paid the fuel excise.

“Instead of toying with the idea of punishing people for buying electric vehicles by charging them additional taxes, the rational thing for government to do would be to pull out all the stops to encourage transport electrification,” Mr Jafari said.

“But slamming the brakes on electric vehicles, when they are capable of delivering so much economic benefit, would be extremely stupid policy.”

Industry advocates have blamed Australia’s lag in new EV sales compared with First World markets such as the US and Europe on the long distances between capital cities, a lack of emissions regulations and the lack of incentives at a federal level.

EY’s Asia Pacific climate change and sustainability leader, Matthew Bell, said the analysis showed the significant value electric vehicles could create for Australia, including the government.

“What will be lost in fuel excise and GST revenue is more than made up for in savings on strategic fuel reserves, leasing and the significant health and environmental benefits,” Dr Bell said.

Energy and Emissions Reduction Minister Angus Taylor said Australians should be able to choose which type of car they drive and the government would support them.

He was a fierce critic of the federal opposition’s 2019 election policy for a 50 per cent target of electric vehicles among new car sales by 2030.

“We are backing a range of technologies, not picking one winner. This follows our ‘technology not taxes’ approach to reducing emissions,” Mr Taylor said.

The federal government’s Future Fuels Fund, to be administered by the Australian Renewable Energy Agency, will provide the funding over four years to reduce barriers to businesses choosing new vehicle technology for fleets, enhance public infrastructure and maximise co-investment in new vehicles across agencies, industry and state governments.

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