The Albanese Government has released the terms of reference for the statutory review of the Electric Car Discount, a flagship policy credited with rapidly expanding Australia’s electric vehicle market and lowering running costs for motorists.
The review, required under legislation, will examine the operation of the discount over its first three years. Introduced in July 2022, the scheme provides fringe benefits tax and tariff exemptions for eligible electric vehicles as part of the Government’s broader plan to cut transport emissions.
Treasury estimates almost 100,000 vehicles have now benefited from the exemption — a milestone reached “much sooner than expected”. Industry data shows EVs account for around 10 per cent of new vehicle sales, up from less than 2 per cent when the Government took office.
The choice of models has more than tripled, growing from 56 available EVs to more than 160, including around 10 models priced under $40,000 and Australia’s first EV priced below $30,000.
Government ministers say the policy is improving affordability and widening access, particularly in outer metropolitan areas where leasing data shows the strongest uptake.
“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,” Minister for Climate Change and Energy Chris Bowen says.
“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.”
Bowen says the review will help ensure policy settings keep pace with a maturing EV market.
“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.”
The discount works alongside the New Vehicle Efficiency Standard and more than $500 million of federal investment in charging infrastructure.
Treasurer Jim Chalmers says the rapid growth in EV sales demonstrates the policy’s impact.
“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,” Chalmers says.
“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.”
The rising uptake will be reflected in the Mid-Year Economic and Fiscal Outlook, with the value of the tax expenditure for the FBT exemption estimated at $1.35 billion in 2025–26.
The statutory review will be led by the Australian Centre for Evaluation in Treasury and the Department of Climate Change, Energy, the Environment and Water, with input from other agencies.
Its findings will inform future policy to expand EV availability and reduce transport emissions.
Public submissions are open until 6 February 2026, with full details available on the Treasury website.
Automobile Magazine-AU
