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Electric Vehicle Council

Electric Vehicle Sector Urges Government Not to Hit the Brakes on Electric Car Discount

Electric Vehicle Council

Key Facts:

* The Electric Car Discount has propelled more than 105,000 additional EV purchases and helped lift EV market share in Australia from 2% in 2021 to 13% today.

* Reduction or removal of subsidies in Germany, Canada and New Zealand saw EV market share backslide in all markets.

* EVC is calling for expansion of incentives - including rebates and GST exemptions - for Australians who can't access novated leasing.


9 February 2026  

The transition to cheaper-to-run, cleaner vehicles for Australian drivers could stall if the Federal Government makes significant changes to tax rules that have supercharged EV sales since July 2022.

In its submission to the Federal Government’s statutory review of the Electric Car Discount, the EVC said the policy has been a game‑changer - propelling more than 105,000 additional EV purchases, tripling the size of the second-hand EV market and delivering up to $3 in economic and health benefits for every dollar invested.

EVC CEO, Julie Delvecchio said the industry welcomed the review of the Electric Car Discount at a time when policy certainty around accelerating EV uptake remained critical to Australia’s 2035 emission reduction targets.

“The Electric Car Discount has helped take Australia from an EV trickle to a real market for people who want to drive cleaner cars and save up to $3,000 each year on fuel and maintenance,” Ms Delvecchio said.

“With EV upfront costs still higher than comparable internal combustion engine cars, tens of thousands of Australians living in outer suburbs - including firefighters, teachers and nurses - could only afford their first EV thanks to the Electric Car Discount.

“The Discount has also stimulated a wave of affordable, off-lease EVs that are now flowing through to the second-hand market, putting them within reach of more everyday Australians.

“However, the job is not done. Australia’s EV adoption needs to accelerate towards the target of 5 million EVs by 2035, and international experience clearly shows that removing demand-side incentives too soon can have a drastic impact on EV uptake.

“We know the risks that come with removing EV incentives too early. Canada and Germany have both recently re-introduced EV subsidies worth $CAD2.3 billion and €3 billion, respectively, after the premature withdrawal of incentives reduced EV sales by up to 12 per cent.

“We look forward to working with the Government to ensure the Electric Car Discount continues to support the growth of EVs which is central to Australia achieving its emission reduction goals”, Ms Delvecchio said.

Electric Car Discount has delivered big results

The EVCs submission highlights the many achievements the Electric Car Discount has delivered:

  • Uptake surge: Removing FBT on eligible EVs has made salary‑packaging dramatically more affordable. EVs jumped from about 1% to 50% of all novated‑lease vehicle orders. Independent analysis attributes more than 105,000 additional EV purchases between 2022 and 2024 to the policy.
  • Broad market impact: EV market share has risen to 13.1% of the total market - a dramatic increase from 2% in 2021 - but there are still fewer than 500,000 EVs in Australia’s 20‑million‑vehicle fleet.
  • Second-hand market stimulus: The Discount has helped to grow the second-hand market for EVs. Data from Pickles Auctions found 49% of second-hand EVs sold in 2025 were fleet and lease vehicles, with average battery health of 96.2%.
  • Environmental and health benefits: Independent modelling shows the Discount delivered $2.25 in economic, environmental and health benefits for every dollar of cost between 2022‑2025, rising to $3 per dollar between 2026‑2030. Benefits include reduced fuel imports, improved air quality, lower health costs and a growing second‑hand EV market.

Risks of winding back support

  • Premature withdrawal stalls progress. When the Electric Car Discount for plug‑in hybrids ended in March 2025, novated‑lease settlements for PHEVs collapsed by 94% within a single quarter, returning to pre‑policy levels.
  • International evidence. Germany’s reduction of EV subsidies saw market share slide from 31% in 2022 to 19% in 2024, prompting a new €3 billion support scheme from January 2026. New Zealand’s repeal of its Clean Car Discount pushed market share down from 27% to 11%.

Policy recommendations

The EVC’s submission urges the Government to ensure that EVs remain affordable for working Australian families and that uptake continues to accelerate towards 5 million EVs by 2035. Key recommendations include:

  • Taper the FBT exemption using objective thresholds linked to EV uptake and emissions targets instead of arbitrary dates.
  • Expand demand‑side incentives to Australians who cannot access novated leasing, such as direct consumer rebates or GST exemptions.
  • Close taxation loopholes for high‑emitting vehicles by reviewing the FBT exemption for heavy utes which has driven significant uptake of high‑emission vehicles; the top four selling utes accounted for more than 153,000 units in 2025, compared with 103,000 battery‑electric vehicles in total.
  • Defer road‑user charging until EV uptake is sustained, and then introduce it universally to all vehicles.

** Read the EVCs full Submission to the Review of the Electric Car Discount here.


About us:

The Electric Vehicle Council is the national peak body representing the electric‑vehicle industry in Australia. Its members span vehicle manufacturers, charging infrastructure providers, energy companies, and financiers. The EVC’s mission is to accelerate the electrification of transport for a sustainable and prosperous future.


Contact details:

Todd Hayward - 0412 205 151