Labor releases terms of reference for electric car discount review
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The news: The Albanese government has released the terms of reference for the statutory review of the electric car discount.
The context: The review will consider the operation of the electric car discount over the first three years it has been in place.
The Australian Centre for Evaluation, in Treasury, and the Department of Climate Change, Energy, Environment and Water will conduct the review in collaboration with other relevant Commonwealth agencies.
The review is seeking submissions from the public, with submissions closing on 6 February 2026.
The discount has applied since July 2022, providing a fringe benefits tax exemption and tariff exemption to eligible cars to support take‑up of electric vehicles and help reduce transport emissions in the longer term as part of the government’s broader climate action agenda.
Treasury estimates that almost 100,000 vehicles have benefitted from the fringe benefits tax exemption, with electric vehicles now comprising around 10% of new vehicles sales.
Leasing data shows the strongest uptake of the electric car discount is in outer suburbs like Baulkham Hills in NSW, Werribee in Victoria, and Springfield in Queensland.
The electric car discount works in concert with the government's new vehicle efficiency standard.
Treasury said the Mid-Year Economic and Fiscal Outlook will show the value of the tax expenditure for the fringe benefits tax exemption for electric vehicles is estimated to be $1.35 billion in 2025-26.
What they said: "We want more Australians to have more choice of cheaper to run cars that save them money at the bowser – and our policy settings are encouraging this," said Minister for Climate Change and Energy Chris Bowen.
"Since coming to government our suite of policies, including the electric car discount, investing in more charging and the delivery of our long overdue new vehicle efficiency standard, have seen more brands enter the market and demand for lower emitting vehicles increase, especially in the outer suburbs.
"We’ll keep refining our policies to make sure that we have the right settings to help more Australians into cheaper to run cars as the market matures over time."
Treasurer Jim Chalmers commented: "The take up of electric vehicles over the past few years has exceeded expectations and that’s been good for drivers, good for business and good for the climate.
"The electric car discount has made EVs cheaper to support early adoption and the next step is to review the policy as we committed to do when we legislated it.
"This is all about supporting Australians to make the switch to more efficient vehicles and ensuring we have the right settings in place for the transport sector over the long term."
The source: Treasury media release
