There are three main incentives currently available to help reduce the cost of EVs. These include the luxury car tax threshold changes, fringe benefits tax (FBT) exemptions and customs duty removal on EVs.
Electric cars have traditionally been on the expensive end when compared to petrol and diesel cars. Over recent years, electric vehicle (EV) incentives have helped increase the uptake of EVs in Australia.
Incentives vary from state to state and can change with time. If you’re looking at making the switch to an EV, knowing these incentives may make your decision a bit easier.
We discuss the incentives currently available on a federal level in Australia, along with any state-specific ones that can help bridge the gap in EV prices.
National federal EV incentives
1. Higher luxury car tax threshold
Luxury car tax (LCT) applies to more expensive vehicles with values over the LCT threshold. For petrol and diesel vehicles, it applies to any car that’s above the $76,950 luxury car tax threshold for the financial year 2023-24.
For more fuel-efficient cars like EVs, the threshold is set at a much higher rate of $89,332 for the financial year 2023-24. Any EV above this price will have LCT that needs to be paid to the Australian Taxation Office (ATO).
2. FBT exemptions
As of 1 July 2022, the Federal Government has implemented a FBT exemption for eligible EVs. This FBT saving could make electric cars more appealing to employers and employees, helping increase the uptake of EVs in company fleets.
This incentive will be reviewed by the government in 2027, so anyone interested in this scheme should seek further independent advice to make the most of it until then.
3. Customs duty removal
Customs duty is a tax that’s applied to imported goods, depending on their value and country of origin.
As of 1 July 2022, EVs and plug-in hybrids with a value lower than the LCT threshold have a “Free” rate of customs duty. This helps reduce the cost of bringing EVs into Australia, further reducing the prices drivers pay for vehicles that are cleaner for the environment. There are some exceptions to this rule, for more information download the Australian Customs Notice (PDF, 1.34 MB).
State and territory EV incentives
Incentives for EV drivers differ depending on the state you live in. See what incentives are currently available to you and what’s on the horizon.
Queensland
Queensland currently leads the way in state EV incentives with the government announcing the Queensland zero emission vehicle rebate scheme.
This rebate of $6,000 is applied to EVs purchased from 21 April 2023 that are under $68,000.
Residents must also have an annual household taxable income of under $180,000 to take advantage of this rebate.
This means that eligible Queenslanders can buy an MG4 electric hatchback for under $40,000 driveaway, at current prices.
Another incentive available is a discount for EVs registered in Queensland. Registration costs for different vehicle types can be found on the Queensland transport registration costs page.
Queensland vehicle registration duty is also lower on hybrid and EV registrations, helping Queenslanders save when buying an EV.
New South Wales
If you purchased an eligible EV in New South Wales before 1 January 2024, you could receive a rebate or stamp duty refund.
The NSW government is now focusing on grants to increase the number of EV chargers in the state. This is part of the NSW Government’s EV public charging master plan.
Australian Capital Territory (ACT)
The ACT has several incentives on offer for EV drivers that range from reduced registration fees to interest-free loans.
ACT currently offers no registration fees for up to two years on EVs purchased by drivers in the territory. However, from 1 July 2024, the ACT is expected to move to an emission-based system that would provide lower registration fees to drivers in the territory if they choose to drive an EV.
The motor vehicle duty exemption is another incentive that helps reduce the price of buying and registering an EV. To be eligible you must hold an ACT Driver Licence and garage the vehicle in the ACT.
An interest-free loan of up to $15,000 is a unique incentive for drivers looking at buying an EV as part of their sustainable household scheme. For more details, see Climate Choices Sustainable Household Scheme.
Victoria
Victorian EV buyers can get $100 off their registration every year. More details can be found on the VicRoads zero and low emission vehicles website.
Tasmania
As part of the Electric Vehicle Rebate program, EV buyers in Tasmania can receive $2,000 off the price of an eligible battery EV.
South Australia (SA)
Drivers of EVs in South Australia can get an exemption from car registration costs in SA for up to three years if the vehicle’s purchase price is under $68,750. Vehicles need to be registered by 30 June 2025.
Western Australia
Residents in Western Australia are eligible for the WA Zero Emission Vehicle (ZEV) rebate. This rebate is offered to those looking at buying a battery-powered EV. The scheme provides 10,000 drivers with up to $3,500 as part of the rebate.
The scheme is expected to last until 10 May 2025, if the available rebates haven’t been taken up by drivers in the state before then.
Northern Territory (NT)
Residents can get free registration for new and used EVs in the NT.
There’s also a stamp duty concession of $1,500 on EVs valued under $50,000. This would mean a further saving on some of Australia’s most affordable EVs such as the MG4 and BYD Dolphin
Take notice of changing incentives
Designed to help drivers get behind the wheel of a cleaner car sooner, EV incentives across the country are constantly changing. With many affordable models on the way, drivers have more opportunities to take advantage of incentives currently available to them.
If you are considering making the switch to an electric vehicle, check out the Allianz EV Hub for info and resources to help give you a head start on your EV journey.
Allianz Comprehensive Car Insurance provides cover for electric vehicles
Disclaimer
This article has been prepared by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL234708 ("Allianz"). In some cases, information has been provided to us by third parties and while that information is believed to be accurate and reliable, its accuracy is not guaranteed in any way.
Any opinions expressed constitute our views at the time of issue and are subject to change. Neither Allianz, nor its employees or directors give any warranty of accuracy or accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in this article.
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