Electric car charging, showcasing EV incentives savings

Government Incentives for Electric Vehicles: What You Need to Know

With the global shift towards sustainability, electric vehicles (EVs) are quickly becoming the future of driving. In Australia, the government has introduced a range of incentives to make EV ownership more affordable and appealing. These incentives, combined with the tax benefits of novated leasing, make now the perfect time to consider switching to an electric vehicle.

In this article, we’ll explore the various government incentives available for EVs, how they can help you save money, and how novated leasing can maximise your savings even further.

Why is the Australian Government Supporting Electric Vehicles?

The Australian government is committed to reducing carbon emissions, and increasing EV adoption is a key part of this strategy. By making EVs more affordable, the government aims to:

  • Reduce greenhouse gas emissions from transport.
  • Encourage manufacturers to bring more EV models to Australia.
  • Support the transition to renewable energy sources by promoting EV charging infrastructure.

These goals are backed by a mix of federal and state-based incentives, making EVs a practical and cost-effective choice for Australian drivers.

Federal Government Incentives for EVs

The federal government offers several incentives to encourage EV adoption. These include:

1. Fringe Benefits Tax (FBT) Exemption

As of 1 July 2022, the Australian government has exempted certain electric vehicles from Fringe Benefits Tax (FBT) when they are provided as part of a novated lease. To qualify:

  • The vehicle must be an electric, plug-in hybrid, or hydrogen fuel cell vehicle.
  • The vehicle’s retail price must be under the luxury car tax threshold for fuel-efficient vehicles (currently $89,332 in 2024).

This FBT exemption means significant tax savings for both employees and employers, making EVs even more affordable under a novated lease arrangement.

2. GST Savings

When you lease an EV through a novated lease, you avoid paying GST on the purchase price and running costs. This reduces the upfront cost of the vehicle and lowers your ongoing expenses.

3. Import Tariff Exemptions

To make EVs more accessible, the federal government has removed the import tariff (usually 5%) on certain EVs, further reducing their purchase price.

State and Territory Incentives for EVs

In addition to federal initiatives, Australian states and territories offer their own incentives to encourage EV adoption. Here’s a breakdown of what’s available in each region:

1. New South Wales (NSW)

  • Rebates: Up to $3,000 for EVs priced under $68,750.
  • Stamp Duty Exemption: EVs priced under $78,000 are exempt from stamp duty.
  • Toll Discounts: EV owners receive discounted tolls on NSW roads.

2. Victoria

  • Subsidies: Up to $3,000 for EVs priced under $68,740.
  • Registration Discounts: EVs enjoy a 50% discount on registration fees.

3. Queensland

  • Rebates: $3,000 for EVs priced under $58,000.
  • Discounted Registration: EV owners benefit from reduced registration and CTP insurance costs.

4. South Australia

  • Subsidies: $3,000 for EVs priced under $68,750.
  • Registration Exemptions: EVs receive free registration for the first few years.

5. Western Australia

  • Rebates: $3,500 for EVs priced under $70,000.
  • Infrastructure Investments: The WA government is heavily investing in EV charging networks.

6. Tasmania

  • Stamp Duty Exemptions: EVs are exempt from stamp duty.
  • Registration Discounts: Reduced registration fees for EVs.

7. Australian Capital Territory (ACT)

  • Stamp Duty Exemption: No stamp duty on EVs.
  • Free Registration: EVs are exempt from registration fees for two years.
  • Low-Interest Loans: EV owners can access low-interest loans for purchasing vehicles and installing chargers.

8. Northern Territory

  • Stamp Duty Discounts: Reduced stamp duty for EVs.
  • Registration Discounts: Lower registration fees for EVs.

How Novated Leasing Maximises EV Incentives ?

Combining government incentives with novated leasing offers even greater financial benefits. Here’s how:

1. Tax-Free Payments

Through a novated lease, you pay for your EV and its running costs with pre-tax income, reducing your taxable salary and saving money on income tax.

2. GST-Free Leasing

Avoid paying GST on the purchase price of the EV and its running costs, further lowering the overall cost of ownership.

3. FBT Exemption

The federal government’s FBT exemption for EVs amplifies the savings of novated leasing, especially for eligible electric vehicles priced below the luxury car tax threshold.

4. Simplified Costs

Novated leasing bundles all EV-related expenses—lease payments, charging costs, maintenance, and insurance—into one simple monthly payment, making budgeting easy.

Which Electric Vehicles Qualify for Incentives?

Not all EVs are eligible for government incentives, so it’s important to choose a vehicle that meets the criteria. Some popular models that qualify include:

  • Tesla Model 3: A premium EV with variants under the luxury car tax threshold.
  • Hyundai Ioniq 5: A versatile EV with excellent range and affordability.
  • Kia EV6: Stylish and well-equipped, with models meeting incentive requirements.
  • BYD Atto 3: A budget-friendly EV with great features.
  • MG ZS EV: An affordable entry-level EV perfect for novated leasing.

Always check the vehicle’s price and eligibility for incentives before making your decision.

Charging Infrastructure: A Key Incentive for EV Ownership

The Australian government is also investing heavily in EV charging infrastructure to support the growing number of electric vehicles on the road. Initiatives include:

  • Fast Charging Networks: Funding for ultra-fast chargers along major highways and regional areas.
  • Home Charger Grants: State-specific programs offering rebates or grants for installing home charging stations.
  • Public Charging Discounts: Many states offer free or discounted charging at public stations.

These investments make owning an EV more convenient than ever, further boosting their appeal.

How to Get Started with an EV Novated Lease ?

If you’re ready to take advantage of government incentives and novated leasing benefits, here’s how to get started:

  1. Choose an Eligible EV: Select a vehicle that meets federal and state incentive criteria.
  2. Work with a Novated Leasing Provider: Providers like One Car Group can guide you through the process, ensuring you maximise your savings.
  3. Bundle Running Costs: Include expenses like charging, insurance, and servicing in your lease.
  4. Enjoy the Savings: Take full advantage of government incentives and tax benefits while driving your new EV.

Conclusion

The Australian government’s incentives for electric vehicles, combined with the benefits of novated leasing, make EV ownership more affordable and accessible than ever. Whether you’re looking to save money, reduce your carbon footprint, or future-proof your driving, now is the perfect time to make the switch to an electric vehicle.

Ready to drive electric and save? Contact One Car Group today for a free consultation and see how novated leasing can help you maximise government incentives and drive into the future.