Keeping a full tax exemption for electric vehicles until next year will help more households adopt the vehicles.
And the Electric Vehicle Council (EVC) believes the 2026-27 Federal Budget’s decision to retain the Electric Car Discount (or Fringe Benefits Tax exemption) and defer a tax for drivers is a positive sign.
“This is good news for everyday Australians who are doing the sums on going electric,” said Julie Delvecchio, council’s chief executive officer.
“The EVC fought hard to retain the Discount and we’re glad government listened.
“Keeping the Discount means more people can continue to access the $3000 annual savings from lower fuel and maintenance bills by switching to an EV.”
(The council is the peak national body representing the electric vehicle industry.)
“This is real cost of living relief, particularly for outer suburban households, where people are driving more and spending more at the bowser,” she says.
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KEEPING THE EXEMPTION
The FBT exemption will remain in full for all cars until April 2027 before a partial phase-out starts, the council says.
From April 2027, EVs under $75,000 will retain the full exemption but those worth from $75,000 up to the luxury car tax threshold will get a 25% exemption. From April 2029, the 25% discount will apply to all EVs below the luxury tax threshold.
“At a time where petrol is over $2 a litre, switching to an EV is one of the best ways people can confidently save thousands each year,” Delvecchio says.
“Keeping these savings in place is smart and sensible and gives families the certainty to plan their own EV transition in coming years.”
The council also welcomes the Budget’s deferral of a road user tax for EV drivers.
“A global fuel crisis is not the time to introduce new taxes on motorists,” says Aman Gaur, head of Legal, Policy and Advocacy at the Council.
“Any road user charging framework should be introduced only when EVs reach 30% of the national fleet, apply to all vehicles, and accurately price for the health and climate impacts of petrol and diesel cars.”
The EVC warns that introducing a tax on electric trucks in the near term would halt that small but growing market before it gains momentum.
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