Greens propose LCT increase

The Greens Party has entered the federal election race with a plan to encourage the purchase of electric vehicles (EVs).

One of the elements of the plan is to increase the luxury car tax (LCT) – currently 33 per cent – to 50 per cent for vehicles priced above $100,000.

According to the Greens, adjusting the LCT upward so dramatically – at that price point – will yield $280 million in additional revenue. It will also theoretically turn many prospective buyers away from conventional luxury cars to electric vehicles such as BMW's recently introduced X5 xDrive40e, presuming the Greens' definition of EVs extends to plug-in hybrids.

Otherwise, this plan appears to favour one brand in particular – Tesla. At present, Tesla's Model S is priced above $100,000, and its Model X SUV will be in the same market stratum when local deliveries commence.

"Tesla welcomes any incentive that accelerates the transition to sustainable transport," Tesla Australia spokesman Heath Walker told motoring.com.au this morning. "We would encourage the removal of taxes on electric vehicles, however the package as a whole creates a compelling option for those in the market."

If plug-in hybrids above $100,000 remain at 33 per cent LCT, rather than taxed at the 50 per cent rate proposed in the Greens' plan, there are already a number of models on sale in Australia that would likely benefit from higher sales volumes under the plan – among them plug-in versions of the Porsche Cayenne and Panamera.

Further incentives in the plan for buyers to make the transition to EV ownership include free registration for the first five years after purchasing an EV. This would involve the federal government channeling money to the states and the respective registration authorities.

Additionally, the Greens Party proposes to fund public charging stations for car parks and government facilities at state and government level. This would cost the taxpayer $151 million, according to the plan, but would result in 330 more charging stations around the country. It's not spelled out as such, but the plan hints that all those charging stations will receive plenty of patronage if the party's target of 31,000 EVs on the roads by 2021 comes to fruition.

The plan also rides on $50 million in grants to government and NGO (non-government organisations) to make the break from internal combustion, in favour of EVs. Finally, the party insists that EV manufacturers and component manufacturers for EVs should be offered subsidy through the Automotive Transformation Scheme.

The plan, should it go ahead, is another complication for the prestige sector of the automotive industry in the post-manufacturing era, along with the threat posed by parallel imports.

The Greens' plan cites a Department of the Environment quarterly greenhouse gas report that states Australia's transport sector contributes 17.4 per cent of the nation's greenhouse gas emissions. EVs, plugged into renewable energy, have a role to play in reducing that contribution, the party says.

For buyers not planning to purchase a car above $100,000 – and therefore not affected either way by the Greens' plan – the LCT threshold is set to rise next year to $64,132 (or $75,526 for green cars consuming fuel at or below 7.0L/100km). This will bring marginal savings to the new-car buyer purchasing a vehicle priced just over the current threshold.

The Greens' plan has been uploaded to the party's website.