Considering their effect on reducing fossil fuel emissions, electric vehicles are becoming more available around the world and the Australian government is looking to increase their uptake here in our country.
As it is, just 1.5 per cent of cars sold in Australia are electric or plug-in hybrid compared with 17 per cent in the UK and 85 per cent in Norway. It’s clear that we can certainly build on the number of Aussies going electric and with the huge numbers of us saying we’d consider buying electric for our next car, an incentive may just be all we need to make it happen.
With no electric cars available in Australia for under$40,000 and just five available for under $60,000, the cost to go electric is a major consideration when you compare pricing elsewhere. As an example there are more than 25 electric models available in the UK for under AU$60,000!
It’s with this in mind that at a National Press Club address earlier this year, The Minister for Industry, Chris Bowen announced that theGovernment will introduce concessions for Electric Vehicles effective from 1July 2022 to make them more affordable for Australians (while reducing climate emissions).
• Import Tariff reduction of 5% on electric vehicles costing less than $77,565; and
• FBT exemption for electric vehicles that are provided through work for private use.
“The Electric Vehicle Council estimates that a $50,000 model (such as the Nissan Leaf) will be more than$2,000 cheaper as a result of removing the import tariff.”
“If a $50,000 model is provided through employment arrangements, Labor’s fringe benefits tax exemption will save employers up to $9,000 a year. Often FBT is passed on to employees –and those employees will benefit directly from Labor’s policy.”
The proposals would seem to be win-win for we as taxpayers, enabling us to save on tax while doing something positive for the environment.
Other positives to end-users are pretty clear, with examples like the estimates on the Nissan Leaf showing a saving of $30 per week in running and maintenance costs.
In addition, with the potential removal of FBT from electric vehicles, this could produce a significant revival in salary sacrificing of cars for employees and become a feature of tax planning going forwards.
Not only will the concessions benefit end-users, the cut-off will hopefully also encourage manufacturers to import and supply more affordable electric models in Australia, giving the industry as a whole reason to pivot slightly to meet demand.
If you’re considering your next asset purchase and would like advice on concessions like the Electric Vehicle Discount, speak with theAttune team today on 1300 866 113 or send us an email to start the conversation.