Electric Car Discount delivers transport emissions decline

A drop in transport emissions, driven by rising electric vehicle uptake, proves the Electric Car Discount is working and imperative to meeting Australia’s climate targets, the nation's peak novated leasing body said.

New data published by the Department of Climate Change and Energy shows that transport sector emissions fell 0.4 per cent in the year to September 2025.

This is the first time emissions from transport have decreased year-on-year since the COVID pandemic.

Minister for Climate and Energy Chris Bowen confirmed electric vehicle sales have tripled in the past three years to make up more than 13 per cent of all new cars sold in 2025.

National Automotive Leasing and Salary Packaging Association (NALSPA) chief executive Rohan Martin said the drop in transport emissions is highly encouraging.

“The Electric Car Discount is proving its worth - it’s the biggest driver of EV uptake in Australia and is a key force behind the transport emission reductions we're now starting to see,” Mr Martin said.

“The Federal Government’s Electric Car Discount is doing exactly what it was originally designed to do - make EVs more affordable for more Australians so that uptake increases and emissions decline.

“Half of all new EVs sold in Australia today are with the help of the Electric Car Discount. Many everyday working Australians living in the outer suburbs simply wouldn’t be making the switch to electric cars without the discount.

“Decarbonising the transport sector is a huge challenge, especially the private car fleet which is very sticky, so this decline in emissions is highly encouraging. It's an undeniable signal that the Albanese Government is on the right track with its co-joined demand and supply side policies.

“The Federal Government’s New Vehicle Efficiency Standard is bringing in the supply and its Electric Car Discount is bringing in the demand. Australia needs both measures in place for a sustained period of time to keep driving down transport emissions and reach our nation's climate targets.

"The policy is also good for the hip pocket during huge cost-of-living pressures. EVs are cheaper to run and thanks to the policy, cheaper to own. Families living in the outer suburbs of our cities show the biggest uptake and are gaining the most from this policy.

“The Climate Change Authority says half of all the light vehicles sold over the next decade must be electric if Australia is to meet its 2035 emissions target. Australia won’t be able to meet its emissions target without the very incentive that is making EVs more affordable and actually getting working Australians to purchase them.

“More than one in ten new cars sold in Australia are now electric but globally, it's one in four. Australia has come a long way with EV uptake in a short amount of time, but catching up with the rest of the world will require sustained effort and the policies to match."

Analysis by Magenta Advisory shows the Electric Car Discount added an extra 105,500 EVs on Australian roads between 2022 and 2024. Those vehicles are estimated to be avoiding between ~160,000 and 200,000 tonnes of CO₂-e each year, with the emissions benefit growing as fleet turnover continues.