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The federal government has announced there will be a statutory review into the Electric Car Discount.
News of a review could mean the government is considering pulling the whole scheme.
Costs have blown exponentially due to the high uptake of eligible vehicles. The Australian Financial Review stated the policy will cost $1.35 billion this financial year – 15 times more than originally forecast.
With the government expecting five million EVs on the roads by 2035, now could be seen as the right time to cut the scheme entirely.
There is no official timeline on when the review will be completed, but it expected to be sometime next year.
The otherwise known as the Fringe Benefits Tax (FBT) electric vehicle exemption came into effect in July 2022.
For eligible cars, it provides a Fringe Benefits Tax and tariff exemption for vehicles imported from countries Australia does not have a Free Trade Agreement with, for example, the European Union.
The incentive applies to new battery-electric vehicles, up to a total cost of $89,332.
It provides some significant benefits for people by reducing taxable income substantially.
FBT is charged to the employer by applying a 47 per cent tax to a grossed-up 20 per cent of the car’s value.
According to a release published by the Treasury, the review will examine the operation of the electric car discount.
It was partially rolled back in April of this year to exclude plug-in hybrid vehicles, which have become increasingly popular in Australia.
According to the latest VFacts data, PHEVs were the standout performer across passenger, SUV and light commercial segments in November, up 83.3 per cent compared to this time last year.
All-electric vehicles have also started to pick up some serious uptake in Australia, with 110 different models in the market in 2025.
Sales of EVs are on the upward trend as well, accounting for 9.1 per cent of sales in November, up from 6.5 per cent in 2024.
Those numbers exclude that of big EVs sellers such as Tesla, with the Model Y being one of the best selling cars in September and October.
Polestar has also seen a modest boost in sales in recent months.
