Premier Chris Minns of the NSW Government has reportedly disclosed that he plans to exclude the electric vehicle subsidies in the state’s new budget.
The Premier’s alarming warning results from the treasury’s claim that its estimated data does not sufficiently proves that EV subsidies accelerate sales in NSW.
NSW’s EV subsidies
The NSW Government currently offers EV buyers a $3000 subsidy for new models that cost below $68,750.
In addition, both new and secondhand EVs with a capped price of $78,000 are exempted from the state’s stamp tax. However, they would be subjected to the anticipated road user tax by 2027.
Interestingly, Premier Minns further indicated that the NSW Government’s plan to revise EV subsidies is largely influenced by the hint that current subsidies could increase EV costs in the state.
“We’ve got a subsidy in place that we think is pushing up the costs of EVs and we’re seeing EVs take up from about two per cent to eight per cent in the marketplace. 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.”
Premier Chris Minns
Premier Minns further noted that the NSW Government is still anticipating the High Court’s decision on Victoria’s EV road user charge as it also aims to implement the same legislation in 2027.
Potential outcomes of withdrawing EV subsidies
Electric Vehicle Council CEO argues that eliminating the EV subsidies from the state’s upcoming budget can significantly impede the growing adoption of low-emission models.
In fact, EV sales grew by more than twofold year-on-year in Australia. Moreover, it accounted for 8.4% of the country’s new car sales in the year’s first six months.
“The mix of state and federal rebates have had a sizeable impact in our market and are finally putting us on track towards being able to achieve emission-reduction targets and they’ve come at a time when petrol prices have gone over $2 a litre. This is the single most effective way of addressing the cost of living – by helping people avoid $2400 a year in fuel costs.”
Behyad Jafari, Electric Vehicle Council CE
For context, the NSW Government aimed to provide 25,000 EV rebates in 2021. Of that total, 7821 rebates were already paid by July 31.
See Also:
- NSW to implement AUD2,200 fine for “ICEing” EV charging stations
- NSW Government’s EV fleets incentives to add another 1,000 EVs
- NSW and Victoria to boost electric vehicles in Australia
- NSW Government declares EV road-user charges to compensate for lost fuel excise revenue
- NSW, Australia to install thousands of EV chargers
The NSW Government’s potential withdrawal of its current EV subsidies can undoubtedly discourage customers from joining the EV shift. In effect, it can interfere with the current EV sales growth in the entire country.
