The electric car rebate bill is expected to pass after being backed by MPs, with Australian car buyers set to benefit.
The Australian government is expected to introduce legislation that will cut thousands of dollars in federal taxes from the price of electric vehicles, hydrogen fuel cell cars and plug-in hybrids. after the proposed law was backed by smaller parties and independent MPs earlier today.
The bill aims to incentivize the adoption of zero- and low-emission vehicles and eliminates import duties on new cars sold for less than the luxury car tax threshold — which is currently $84,916 — and exempts those vehicles from the Fringe benefit tax.
The discounts will and could affect dozens of models from Cupra, Ford, Hyundai, Kia, Mazda, Mercedes-Benz, MG, Mitsubishi, Nissan, Polestar, Renault, Tesla and Volvo potentially saving Australians up to $4700 a year for those who wrap their car under contract.
Employers could also save up to $9,000 annually by making changes to the FBT.
The policy could cost the government $4.5 billion in tax revenue over the next decade, according to modeling by the Parliamentary Budget Office Age.
However, the rebate will end for plug-in hybrid vehicles, which can run on both battery and petrol, from April 1, 2025, due to the addition of a “sunset” clause that will accelerate sales of electric vehicles (EVs). target.
“This is a milestone for EV policy in Australia,” said Behyad Jafari, CEO of the Electric Vehicle Council, in a statement following the announcement.
“This legislation will enable thousands more Australians to get behind the wheel of an electric vehicle, where they can reap the benefits of lower fuel bills, less pollution and a more enjoyable driving experience,” he said.
“Facilitating the purchase of new EVs will accelerate the creation of a strong used EV market, which is critical to affordability.”
When the bill was first introduced in July 2022, the government cited emissions and rising fuel costs as reasons for the policy.
“The transport sector is one of the fastest growing sources of emissions in Australia and increased adoption of electric vehicles can have a significant impact on our efforts to combat climate change,” said Treasurer Jim Chalmers and Minister for Climate Change and Energy Chris in a joint statement Bowen said at the time.
“Importantly – as families grapple with rising fuel costs – promoting more affordable electric vehicles to the market is an important step to address transportation costs in the medium term and build resilience to global oil prices,” the statement said.
“This legislation will encourage greater adoption of electric cars and help reduce traffic emissions.”
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