Polestar urges crackdown on ute tax perks

The federal government should axe tax cuts for diesel and luxury utes rather than electric vehicles (EVs), the local Polestar boss has declared.

Polestar Australia CEO Scott Maynard was speaking as the federal government commences a required 2026 statutory review into the Electric Car Discount.

Since 2022, the policy has provided a valuable Fringe Benefits Tax (FBT) exemption for electric vehicles (EVs) priced below the luxury car tax threshold when purchased via a novated lease.

The tax break has helped around 100,000 Australians buy an EV or plug-in hybrid (PHEV) since it was introduced.

However, the tax break has also cost the government significantly more than originally forecast.

“The government’s published goal is to see 50 per cent of the market buying electric vehicles by 2035,” Maynard said.

“They are nowhere near that, and they are not tracking towards that.”

“I fail to see how the program could be overspent when the results are underdone. The two simply don’t line up. It would suggest it was under-budgeted from the start.”

Maynard oversaw a 38.6 per cent rise in Polestar sales in Australia in 2025, driven largely by the new Polestar 4 SUV.

Although popularity has increased amongst EVs, the local boss says this should not be used as justification for axing the exemption.

Instead, Maynard argued that utes are better candidates for tax reform because they also receive FBT discounts, and more expensive models can exploit a loophole in the luxury car tax.

“If the government is seeking to rationalise its expense through FBT subsidies I feel strongly that it should be looking at the money it is investing in the sale of dual cab utes before it looks at electric vehicles,” Maynard said.

“We don’t think twice about the billions of dollars the government is sinking into the sale of dual cab utes, to the point we are selling 1.5 times the utes that we have tradespeople.”

“That would seem to me to be a much easier win that going after a corner of the market that’s doing good things.”

Automotive lobby groups also back Maynard’s view on the exemption review, arguing for its retention.

Meanwhile, Maynard expressed his conditional support for a road user charge, which is being proposed to maintain revenue as EV numbers rise and petrol sales – and therefore fuel-tax receipts – decline.

“A road user charge still should consider the substantial benefits that an electric vehicle brings to an Australian motorist over a petrol or diesel vehicle and consider not just what they're doing in terms of a maintenance requirement on Australian roads, but what they're contributing to the air quality of our cities, towns and rural landscapes,” he said.

The review into the Electric Car Discount is being led by the Australian Centre for Evaluation, which is located within the Commonwealth Treasury, with the Department of Climate Change, Energy, the Environment and Water also contributing.

If you want to get involved, written submissions can be made until February 6 here. Findings are expected by mid-2027.

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