Industry plea over EV incentives
The new-vehicle industry in Australia is calling on the federal government to retain targeted, demand-side incentives for battery electric vehicles (BEVs) to support the move to lower transport emissions.
The Federal Chamber of Automotive Industries (FCAI) has made its comments in a submission to Treasury’s review of the electric car discount.
It says measures such as a fringe benefits tax (FBT) exemption remain an important complement to the new vehicle efficiency standard (NVES), which is a supply-side measure.
Tony Weber, chief executive, adds that sales results have shown the FBT exemption has played a key role in encouraging consumers to purchase an EV.
“Manufacturers have responded to the NVES by expanding the range of BEVs available, with more than 100 models now on sale,” explains Weber, pictured.
“Supply-side regulation alone will not deliver the transition. Consumer demand must also be supported if Australia is to meet its emissions reduction objectives in an affordable and practical way.
“If the FBT exemption is removed, then the federal government must consider other forms of demand-side incentives that can support the ambitious targets of the NVES by having more Australians in battery electric and other forms of low-emissions vehicles.”
Weber notes BEVs accounted for 8.3 per cent of new vehicle sales in Australia last year but demand is sensitive to upfront cost, total cost of ownership and access to charging infrastructure.
“As NVES targets tighten over coming years, any changes to demand-side incentives must be carefully designed to improve accessibility and avoid undermining consumer confidence,” he says.
The FCAI has highlighted to government officials that international experience shows any removal of incentives can lead to declines in EV uptake.
It is recommending the federal government continue demand-side incentives to complement the NVES, ensure any reform of the FBT exemption improves accessibility for consumers and extend tariff exemptions to include electrified light commercial vehicles.
