Auto industry welcomes ALP’s EV pledge

UPDATED 01/04/2021 2:00pm: Shadow energy minister Chris Bowen yesterday defended Labor's EV incentives, saying that while they won't mean "everyone could afford one", the axing of import duty for EVs priced under about $77,500 would reduce the price "by about $2000 on a $50,000 Nissan LEAF" and that axing FBT would cut the price by a further $8700 for business and fleet buyers, which represent 50 per cent of the Australian new-vehicle market.

ORIGINAL ARTICLE PUBLISHED 31/03/2021: Australia’s auto industry has welcomed the Labor party’s pledge to cut taxes on electric vehicles if it wins the next federal election.

If elected, Labor has promised it would eliminate import tariffs on EVs priced under $77,565 – the current luxury car tax threshold for ‘green’ vehicles – and exempt them from fringe benefits tax in an effort reduce retail prices and increase fleet purchases of EVs.

The tax cuts will reportedly cost $200 million in lost revenue over three years but there is no forecast on the increase in number of EV sales.

The Federal Chamber of Automotive Industries (FCAI), which represents auto brands in Australia, today said the move would incentivise the uptake of EVs in Australia.

“It is refreshing that we can now start to have meaningful discussion about increasing the number of low-emission vehicles on our roads and the subsequent improvement to our national environmental performance, customer choice and communities through this technology,” said FCAI chief executive, Tony Weber.

“Australia is lagging the rest of the world when it comes to a long-term vision for the continued penetration of low-emission vehicles. The automotive sector has seen around the world that strong signals around targets, good infrastructure policy and incentives from national governments contribute to positive outcomes on low-emission vehicle introduction.

“The ALP announcement gets the topic back onto the policy agenda and that is critical right now. Positive signals like this can encourage global car brands to increase the choice of low-emission vehicles available in our market which in turn increases the adoption of electrified vehicles available to customers.

“We will be pleased to work alongside any government in their efforts to introduce positive policy directions for the increase of the best technology vehicles that are available to Australians.”

In the absence of EV incentives or a CO2 tax from the federal government, the FCAI and its members last year introduced their own Voluntary CO2 Emissions Standard targets for 2030.

But figures released last week showed that average CO2 emissions across all new light commercial vehicles and heavier-duty SUVs remained at 218g/km in 2020 (well above the target of 197g/km) while passenger cars and lighter SUVs emitted 150g/km – 4g/km less than the target.

“The automotive sector is ready and willing to participate when it comes to a direction on emissions reduction and the adoption of world’s best vehicle technology,” continued Weber.

“I encourage all policy-makers across the country to work with the industry so our market for zero- and low-emission vehicles matches the rest of the world rather than being a distant follower.”

Most notably, along with overseas demand, the lack of EV incentives Down Under has slowed the local introduction of Volkswagen’s ambitious EV strategy, which includes 75 new models and one million sales by 2025, until at least 2023.

“How encouraging it is that the future of mobility is being taken seriously. Like all importers we eagerly await Labor’s full EV strategy,” said Volkswagen Group Australia spokesman Paul Pottinger.

Opposition leader Anthony Albanese unveiled the ALP's new EV policy today, three years after Labor said EVs would account for 50 per cent of cars on Australian roads by 2030 if it won the 2019 federal election.