South Australia to introduce EV subsidy

South Australia looks set to become the latest state to introduce a financial rebate for buyers of new electric vehicles – and to delay its road user tax.

Under a new Motor Vehicles (Electric Vehicle Levy) Amendment Bill due to be tabled in parliament today, the Festival State would provide a $3000 subsidy for some 6000 EV purchases.

The move mirrors similar incentives already announced by NSW, Victoria, the ACT and the Northern Territory.

Following 12 months of industry consultation, the SA bill also includes a controversial road user charge that will gradually offset the fuel excise tax as more consumers take-up EVs – to the effect of 2.5c/km.

It is understood the South Australian bill will include also a 2.0c/km charge for plug-in hybrid vehicles – meaning those owners would be slugged a road-user charge as well as the fuel excise tax.

However, unlike Victoria’s plan to bring in the road user charge immediately – a decision that is being contested by a petition to Victorian parliament – South Australia’s equivalent will not come into effect until July 2027 or when EVs comprise 30 per cent of all new vehicle sales in the state.

The Festival State approach aligns with the existing NSW policy (albeit without stamp duty exemption), which recently helped the state top the Electric Vehicle Council’s national rankings for EV-friendly states.

But the South Australian bill needs to be passed by parliament and state treasurer Rob Lucas admits that “looks unlikely at this stage” due to continued opposition from Labor and The Greens, who have called for alterations to the proposal.

The fineprint of the bill is due to be revealed in full early next week.

The Federal Chamber of Automotive Industries has welcomed the South Australian plan, but car-makers have offered mixed reviews apparently based on how their model ranges would be affected.

Mitsubishi Australia marketing and operations director Rob Nazzari warned the SA proposal would ultimately penalise buyers of plug-in hybrid vehicles, of which Mitsubishi is a strong proponent with PHEV versions of its Outlander and Eclipse Cross.

“We remain concerned about the impact of the proposed tax on our customers,” Nazzari told carsales.

“We need to strike the right balance to ensure that the luxury end of the EV market is not incentivised at the expense of the increasingly popular and family-friendly PHEVs that will ultimately play a critical role in the transition to a low-carbon future for every-day South Australians.

“If PHEV consumers end-up paying more in taxes and charges than consumers purchasing a regular, combustion engine vehicle, the unintended consequence could mean a delay in the uptake of EVs and pushing-out our low-carbon future for the mainstream consumer.”

Volkswagen Group Australia, which currently doesn’t offer any EVs or PHEVs but continues to study the viability of the VW I.D. family of electric models already available in Europe, was more supportive of the South Australian proposal.

VGA managing director Michael Bartsch said the proposal served to emphasise the “inertia of the federal government”, which he believes is yet to meaningfully get behind EVs in our marketplace.

“The states and territories are left to pursue individual policies on the most profound change to personal mobility in 100 years,” Bartsch said.

“NSW has devised a world-class strategy to encourage uptake of zero-emissions vehicles. Nor would South Australia implement a road user charge on EVs until 2027 or until these comprise 30 per cent of sales.”

Bartsch, whose company will introduce a range of plug-in hybrid models under the Cupra brand by mid-2022, also fired a shot at the Victorian government’s road user tax, which affects both EVs and PHEVs but not regular hybrids such as those available across Toyota’s range.

“Lack of federal leadership, however, has allowed the Victorian government to go rogue with a plan predicated on taxing EVs before they comprise even one per cent of the market,” he said.

“Victoria’s token rebates do not change the fact that new plug-in hybrid EVs are double-taxed under the road user charge and the fuel excise, while antiquated 1990s ‘self-charging’ hybrids are exempted.”