How is the Australian Government incentivising the transition to electric vehicles in 2024?
4 July 2024
Amelia Nikles-Ralph
Last year, the number of electric vehicles on Australian roads reached a record high of 180,000 – a figure that doubled 2022 numbers.
Despite this growth, we believe that government support at both a federal and state level is crucial to achieving a 100% zero-emission fleet by 2050.
Whether you’re an employer or an employee, you may be wondering what current incentives you are eligible for to aid with the transition to an electric work vehicle.
Throughout this article, we step you through current federal and local initiatives, and then discuss how tax rebates work at the end of the financial year.
Federal Incentives
Firstly, the fringe tax benefits exemption (FBT) cuts the tax for EVs under the luxury car threshold (LCT) for fuel-efficient vehicles ($89,332), with the goal of putting EV prices on par with traditional diesel or petrol cars. The exemption applies to zero or low-emission vehicles purchased under a novated lease arrangement, allowing EVs to be purchased through a pre-tax salary. This reduces an individual’s overall taxable income and makes novated lease options more effective than any other option.
According to advice from the government, “if a model valued at about $50,000 is provided by an employer through this arrangement, our fringe benefits tax exemption would save the employer up to $9000 a year.”
Further, EVs and plug-in hybrids with a lower value than the LCT threshold also have a “free” rate of customs duty, which reduces the cost of import.
State-by-State Incentives for EVs
Benefits vary greatly state by state within Australia, with opportunities often on short timeframes to encourage fast uptake.
Currently, incentives exist only in the Australian Capital Territory, Western Australia, Tasmania, and the Northern Territory.
In the ACT and the NT, discounts are available to reduce the cost of both registration and stamp duty. Instead of the traditional weight-based system, registration cost is based on emission levels, and stamp duty exemptions are offered. Western Australia offers a $3,500 rebate for EVs up to $70,000, and Tasmania similarly provides a $2,000 reduction for both old and new EVs.
Electricity Tax Rebates
The Australian Tax Office (ATO) has made determining whether the employer or employee is responsible for running costs such as the cost of electricity simple.
In response to the complexity of calculating the associated cost of charging work EVs at home, the Australian Tax Office (ATO) finalized their Practical Compliance Guideline (PCG) 2024/2 in March. This guideline offers EV drivers practical ways to ensure electricity costs relevant to company-related activities are correctly accounted for. Notably, the PCG introduced the 4.2 cents per kilometer method, which simplifies the process of calculating the cost of charging electric cars at home – removing the need to keep a detailed logbook.
This new method excludes plug-in hybrids, electric motorcycles, and scooters, and cannot be applied when solar is exclusively used as the power source for the vehicle.
Here at EVOS, we understand that government deduction options and rebate schemes are constantly in a state of flux. Our marketing team is committed to reviewing this information regularly to make sure it’s as up to date as possible.
If you have any questions about upgrading your EV charger fleet or about how to better manage your EV energy, reach out to our friendly sales team at sayhi@evos.com.au
