Electric and plug-in vehicles may be new to the automobile industry, but they’re fast becoming a competitive alternative to traditional cars. Though hybrid, plug-in, and fully electric car sales made up only 1% of total new vehicle sales worldwide in 2016, Bloomberg predicts that those sales will increase to 54% by 2040. Bloomberg’s prediction is aggressive compared to some other models, but one thing is for sure: electric cars are here to stay. So the big question on most consumers’ minds is simple. Why should I buy an electric car over a gas-powered vehicle? Your answer may be one of the many government incentives available. Internationally, governments have increasing environmental concerns. Australia offers electric car buyers some great reasons to ‘go green’ with their automobile choices.
Current EV Buying Incentives in Australia
Australia’s still catching up to the rest of the world when it comes to EV purchase incentives. A few do exist, though, and are easy to use as long as you know about them!
1. Sponsored Financing for EV Purchases
In 2017, Australia announced a partnership with Macquarie Leasing. Its goal was to reduce the cost of financing for electric vehicle purchases. The program gives EV buyers a 0.7 per cent discount on the funding of, and a further 0.5 per cent discount for conventional but eco-friendly cars purchased.
2. Reduced Registration Costs
In Victoria, Australia, electric car owners can look forward to a discount on their vehicle registration costs. The state gives drivers of electric plug-in cars a $100 discount on their annual registration.
In the Australian Capital Territory, electric car owners receive a 20% discount on annual registration costs. The stamp duty for entirely electric vehicles in this territory is reduced to $0, as well.
Suggested Incentives: EV Purchases in Australia Going Forward
Australia only provides a few incentives to EV buyers right now. However, a report compiled by ClimateWorks Australia in 2016 suggests possible improvements to the country’s attitude. The report cites several companies and entities, all wanting to make the country as EV-friendly as possible. Tesla and Renault Australia were some of the co-signatories of the report. The Australian Electric Vehicle Association and the Electric Vehicle Council also pitched in.
Here are a few of those ideas to improve Australia’s future relationship with the electric car industry.
1. Expanded Operating Incentives
Victoria and the Australian Capital Territory give residents financial incentives to ‘go green.’ Likewise, the report suggests federal operating incentives for electric vehicles. These incentives might include reduced registration costs and priority lanes, among other options.
2. Infrastructure Improvement
Electric cars need somewhere to charge. The report suggests an inventory of Australia’s current charging infrastructure, followed by an expansion. Publicly maintained parking areas would have designated EV parking slots with charging stations.
3. Up-Front Incentives
Many countries offer tax credits and rebates for an electric vehicle purchase. Tesla’s American website reports that any vehicle purchased on or before December 31, 2018, will receive a $7,500.00 tax credit from the American federal government.
The report encourages similar tax credits from the Australian government, or perhaps a rebate system for EV purchases. The country could take its example from existing policies elsewhere. Washington, DC recently implemented a sales tax rebate for certain electric vehicle purchases.
4. Government Fleets
The report also suggests that the Australian federal government set a goal for EV uptake within its fleet of vehicles. By adding a visible number of electric cars to its fleet, the government would stand as an example to citizens and encourage more people to purchase electric cars.
Besides visibility, the presence of electric cars for government use could create more charging infrastructure throughout Australia. The report suggests that charging stations for the government fleet could be made available for public use as well.
5. Increased Publication on Vehicle Emissions
The report points out Australia is a signatory of the Paris Agreement. That agreement committed the country to many environmental goals. One of these is a commitment to net zero carbon emissions by 2050.
Electric cars could help Australia reach this goal, and the report suggests that Australia make more public efforts to educate its citizenry. A public campaign might go a long way to inform the public about the harmful effects of carbon emissions and the benefits of electric vehicles on the road.
6. The Luxury Car Tax
This tax is one of the most prohibitive realities of Australia’s current tax law among prospective electric vehicle owners. As it stands, the luxury car tax applies to anyone who imports a vehicle with a value above the LCT threshold. The tax rate for these imported vehicles is 33% on the amount above that threshold.
The report suggests a reduction or elimination of the luxury car tax for electric vehicles. Consumers are subject to the tax because Australia does not manufacture these cars locally, and dealers must import their inventory from out of the country.
We Keep Marching On
As Australia becomes more EV friendly, the co-signatories of the ClimateWorks Australia report hope electric vehicle purchases will rise the way they have in other countries around the world. A warmer reception to electric vehicle purchases may even herald economic perks for the Australian government itself; Tesla said in August 2018 that it might consider building its cars in Australia if the market improved.
Like many technologies, the future of the electric car changes daily. We like to keep an eye on all those advances and innovations. For the latest updates and most exciting news in the world of electric vehicles, keep an eye on our blog.