The ‘Powering Australia’ Plan and EV Discounts

As part of its ‘Powering Australia’ initiative, the Australian Federal Government unveiled a national strategy aimed at boosting the availability and adoption of electric vehicles (EVs) in order to achieve a national target of zero emissions by 2050.

The market for EVs is expanding rapidly, with an increasing variety of makes and models, accompanied by a continuously growing charging infrastructure.

Moreover, the government has introduced the Electric Car (EV) Discount for novated leases, presenting an ideal opportunity to save on the purchase of an EV.

Here’s how the EV Discount operates: Eligible battery-electric vehicles (BEVs), hydrogen fuel cell electric vehicles (FCEVs), and plug-in hybrid electric vehicles (PHEVs) are exempt from fringe benefits tax (FBT) payments up to the Luxury Car Tax threshold of $84,916.

To qualify, the vehicle must be brand new and not have been used prior to July 1, 2022.

Consequently, novated leases for EVs differ from those for traditional fuel-powered vehicles, as they do not include a post-tax component in the payments. This distinction can result in significant annual savings amounting to thousands of dollars.

It’s important to note that plug-in hybrid vehicles will only be eligible for the EV Discount until April 1, 2025. However, existing leases will maintain their FBT exemption until the conclusion of the lease term.

In a separate move, the government has also eliminated the 5% import tariff exemption previously granted to certain imported EVs.