Polestar renews calls for the Luxury Car Tax to go

Premium EV challenger brand Polestar has weighed in on the growing speculation around the possible abolishment of the Luxury Car Tax (LCT), with Aussie managing director Scott Maynard declaring it “a tax without a purpose”.

Speaking to carsales this week, Maynard said the local industry the LCT was implemented to protect doesn’t exist anymore and that many a brand would benefit beyond Polestar.

“We don’t have a local car industry to protect,” he said.

“The brands have been calling for that tax to be removed – you don’t see a luxury boat tax or luxury house tax, so it just doesn’t make sense.

“If this is what it takes to get a free trade agreement with the EU over the line, then I think it would be the right concession for the government to make.

“There are many brands that would benefit from this more than our own.”

According to media reports in May, the Prime Minister was/is in discussions with the EU about abolishing the LCT in exchange for better regional access for Australia’s agricultural exports, with such a move set to theoretically slash thousands off the asking prices of dozens of models.

The tax’s impact varies depending on a model’s sticker price, adding 33 cents for every dollar it is over a given threshold: $91,387 for ‘fuel-efficient’ vehicles (that average less than 3.5L/100km) and $80,567 for ‘other’ vehicles (that average more than 3.5L/100km).

A free trade agreement with Europe would be in Polestar Australia’s interest seeing as the 2028 Polestar 7 compact SUV, which is tipped to become one of, if not the most popular model in the brands line-up, will be produced exclusively in Slovakia.

Between now and then however will be the local introduction of the Polestar 5 sports sedan and no doubt more variants of the Polestar 3 and 4 SUVs, all of which stand to benefit from the LCT’s abolishment from a price point of view.

“The price of our cars is a build-up of their cost,” Maynard said.

“If a tax was released from that cost there’d be no need to continue to impose it, to pay a margin – that’s not how we work.

“I don’t want it interpreted as meaning we would then simply take 33 per cent [of the threshold breach] off the price of cars or anything like that, but the cost build-up would remain the same, the pricing packet would remain the same.

“If the cost of our vehicles changes well then that will be reflected in the price; if the tax gets removed, we don’t absorb that, we pass it on.”

Polestar’s enjoyed a reasonable year Down Under thus far with sales up some 23 per cent – off an admittedly low based – compared to the first half of 2024, equating to 1173 deliveries as of June 30.

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