Labor to deliver cheaper EVs with new green policy push

The Labor Party has unveiled its EV policy vision for Australia, with the Federal Opposition vowing to reduce taxes and tariffs to make electric ownership cheaper and more accessible.

In a policy announcement that Australia’s Electric Vehicle Council says will “help Australia catch up”, the Labor Party’s pledge includes exempting electric vehicles from import tariffs and from the Fringe Benefits Tax.

“Australians want to make the switch to electric vehicles, but the lack of leadership nationally has limited their options,” says EV Council chief executive, Behyad Jafari. 

“This policy would encourage car manufacturers to import and supply more affordable electric models in Australia. This makes it a win for the environment and a win for fairness.

“This is the type of sensible action that has been taken by world leaders from all sides of politics. It is proven to work by making electric vehicles more affordable for more Australians.”

At the core of the pledge is a plan to remove import tariffs on electric vehicles, which can 5 percent of the retail price, depending on where that vehicle is imported from. It would be better news for mainstream brands rather than the premium players, however, given the given the exemption would only apply to vehicles under the luxury car threshold for fuel efficient vehicles, which is $77,565 in 2021.

The Nissan Leaf and upcoming Leaf e+, for example, is imported from the UK, and Australia’s Electric Vehicle Council estimates a potential saving of around $2000 if the import tariff was removed. 

The second part of Labor’s proposal – announced this morning by Federal Opposition Leader Anthony Albanese – is to remove Fringe Benefits Tax on EVs that are provide via an employer but used for personal use.  That tax can scale up to 47 per cent, and using the Nissan Leaf as an example again, the Electric Vehicle Council estimates savings of up to $9000 over the lease life of a vehicle.

The final prong in this morning’s policy announcement is a new $200m program to install 400 community batteries that the Labor party says would deliver charging access to up to 100,000 households. The focus for the program would primarily be apartment blocks not currently equipped with charging infrastructure.

“It’s encouraging news,” says MG Australia’s Danny Lenartic, whose company last year launched Australia’s most affordable electric vehicle, the MG ZS EV. 

“EVs are starting to be taken seriously, and it’s another reason to believe. (This policy) absolutely can help with the penetration of EVs in Australia.”

Interestingly, the federal policy to encourage the uptake of EVs in Australia sits in stark contrast to the state Labor Government in Victoria, where a new road tax on EV use is being rolled out. From July 1, EV owners will pay 2.5 cents, and hybrid owners will pay two cents, per kilometre travelled.