NSW Premier considers axing electric-car subsidies

The Premier of New South Wales has claimed electric-car subsidies are driving up the price of new vehicles as automakers aim to maximise profit from the in-demand vehicles – prompting the State Government to consider pulling the plug on its rebates.

Since 1 September 2021, buyers of battery-electric and fuel-cell hydrogen-electric cars in New South Wales have been offered a rebate of $3000 on vehicles with a dutiable value of up to $68,750, which included dealer delivery and optional extras but before registration and government costs.

Stamp duty has also been waived for eligible vehicles worth up to $78,000.

However, New South Wales treasury estimates have showed the incentives were not increasing electric-car sales in the state – and State Premier Chris Minns has claimed the rebates are actually pushing up electric-vehicle prices.

MORE: How to apply for electric car discounts and rebates in Australia

According to the Australian Associated Press – via The Driven – Mr Minns suggested the state’s electric-car incentives could be repealed after next month’s budget, just two years since they were introduced.

“We’ve got a subsidy in place that we think is pushing up the costs of EVs [electric vehicles] and we’re seeing EVs take up from about two per cent to eight per cent in the marketplace,” Mr Minns said.

“Given all of those moving policy changes, we’re going to have to say something about it in the… budget, which is due in a month’s time, but any government faced with that set of policy circumstances would have to take it into consideration.”

Should the New South Wales government repeal its electric-car incentives, it will be the second state to do so in as many months – following the Victorian government’s decision to quietly axe its $3000 zero-emissions vehicle subsidy in July 2023, due to a lower-than-expected take-up rate.

The New South Wales government is also reportedly awaiting the results of a High Court challenge against Victoria’s controversial electrified car road-user charge to determine whether NSW will proceed with plans to introduce its own in 2027.

In Victoria, the road-user charge – known formally as the Zero and Low Emission Vehicle road-user fee (ZLEV) – requires owners of electrified vehicles to record the number of kilometres travelled each year, and pay a tax on that distance in addition to vehicle registration costs.

From 1 July 2023, Victoria’s road-user charge was increased from 2.6 to 2.8 cents per kilometre, while the tax for plug-in hybrid vehicles – which is paid in addition to the fuel excise for any petrol used by these vehicles – went up from 2.1 to 2.3 cents per kilometre.

In New South Wales, the previous State Government had announced it would charge fees of 2.5 and 2 cents per kilometre for electric cars and plug-in hybrids respectively – though this is expected to be increased as the figures were intended to be pegged with inflation.