Electric vehicles are expected to become cheaper in Australia this year as part of a new federal deal that was agreed upon by the government and the Greens. 

The agreement will cut taxes on eco-friendly cars, give battery electric vehicles priority in commonwealth fleets, and limit subsidies applied to controversial plug-in hybrid electric cars. 

While some electric vehicle advocates called the policy a “landmark moment” for transport, other environmental groups said that more has to be done to stop the country from falling behind the rest of the world. 

During the election, Labor pledged to cut fringe benefits tax on low-emission vehicles to encourage fleet owners and employers to replace petrol vehicles with greener alternatives. 

However, the laws looked set to be blocked by the Senate crossbench because they would cut the price of plug-in hybrid vehicles that feature petrol engines.  

The new deal will see the price of battery electric, hydrogen fuel cell and plug-in hybrid vehicles slashed by $4700 for individuals or up to $9000 for businesses, with savings backdated to July.  

But tax cuts for hybrid vehicles will be short-lived, with Greens party leader Adam Bandt revealing their support will be phased out on April 1, 2025. 

Priority will also be given to battery electric vehicles in government fleet procurement by removing hybrids in all but exceptional circumstances. 

“The Greens have fast-tracked electric vehicles,” Mr Bandt said. 

“The government fleet will go electric and when these cars are sold second-hand, it will help bring the cost down of EVs for everyday people.” 

He said it showed the government could be pushed into going “further and faster on climate” through innovation. 

Greens Senator Sarah Hanson-Young said the government should use the two-year window for phasing out plug-in hybrid support to build more charging stations and speed up Australia’s transport transition. 

“The government needs to come to the party with the other policy measures needed to ensure people have the opportunity to charge, to recharge and to afford that infrastructure,” she said. 

Senator David  Pocock, who proposed the “sunset clause” on discounts for plug-in hybrids, said it was important to lower the price of electric cars but he did not want to see the second-hand market flooded with hybrid vehicles still using petrol engines. 

“My position is that plug-in-hybrids are a fossil fuel technology that should not be subsidised by taxpayers in this bill,” he said. 

“This bill provides tax incentives to mostly wealthier Australians through fleet vehicles, which will create a much-needed second-hand EV market in a few years’ time.” 

Electric Vehicle Council chief executive Behyad Jafari said the deal would also help lower Australia’s carbon emissions and “reduce our precarious dependence on foreign oil”. 

“This is a powerful demonstration of how far we’ve come in just a few short years,” he said. 

Greenpeace Australia Pacific senior campaigner Lindsay Soutar said the agreement was “a step in the right direction” but said the government could do more to increase competition and lower prices. 

“While the world is racing ahead in the adoption of electric vehicles, in Australia this year only 3.39 per cent of new vehicle sales were electric,” she said. 

With AAP

Eliza Sayon

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Eliza is a content producer and editor at Public Spectrum. She is an experienced writer on topics related to the government and to the public, as well as stories that uplift and improve the community.

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