EV discount changes

Australia’s electric vehicle (EV) discount, which currently exempts fringe benefits tax (FBT) for eligible models, will undergo changes starting April 2027. The government will reduce the FBT exemption to 25 percent for EVs priced between $75,000 and $91,000, while models under $75,000 retain full relief until April 2028. By April 2029, all eligible EVs under the luxury-car tax threshold (currently $91,387) will receive a 25 percent FBT discount. The Electric Vehicle Council (EVC) welcomed the decision, calling it a cost-of-living measure that benefits everyday Australians. CEO Julie Delvecchio stated the full FBT discount until April 2027 provides financial relief, while a 25 percent discount for three years ensures continued accessibility. She emphasized the importance for outer suburban households, where higher fuel costs make EV savings critical. The National Automotive Leasing and Salary Packaging Association (NALSPA) advised Australians to act before April 2027 if purchasing an EV priced between $75,000 and $91,000. CEO Rohan Martin noted that 85 to 90 percent of EV novated leases fall under $80,000, meaning most buyers won’t face immediate changes. However, he warned that delays could exclude buyers from the discount, as seen with plug-in hybrid vehicles. NALSPA highlighted that volatile fuel prices and global supply disruptions have increased demand for EVs as a cost-effective alternative. The government’s phased approach balances cost-of-living relief with long-term fiscal responsibility, Martin said. Over 100,000 Australians have already benefited from the EV discount, reducing upfront costs and lowering fuel expenses. The EVC and NALSPA urged Australians to consider novated leasing or salary sacrifice as affordable ways to transition to EVs. With fuel prices remaining unstable, the discount helps households cut emissions and reduce reliance on imported oil. Both organizations emphasized the need for timely action to secure the best possible savings.