Victorians get $3000 subsidy for electric cars

The Victorian government is now providing a subsidy of up to $3000 to encourage people to buy electric cars.

Initially applying to new electric vehicles priced below $68,740, Australia’s first significant EV rebate is part of the state government’s pledge to cut greenhouse gas emissions by 45-50 per cent by 2030 and reach net zero emissions by 2050.

A key plank of the $100 million strategy is to have 50 per cent of all new car sales in Victoria to be zero-emissions vehicles by 2030.

To that end, the Victorian government will expand its EV fleet by 400 cars over the next two years, while at the same time spending $19 million on new electric vehicle recharging stations.

For now, the subsidy is limited to 20,000 new EV sales on a first come, first served basis, starting with 4000 vehicles in the first wave.

However, Victorian EV owners are also set to be slugged with a new road user tax, which could undermine the financial benefits of the subsidy.

The proposed user-based EV tax has been labelled “the worst electric vehicle policy in the world” in an open letter by major players in the industry, including Volkswagen, Uber and Environment Victoria.

Expected to be enacted into legislation soon, the EV tax will introduce road usage fees of 2.5 cents per kilometre for full-electric vehicles, while plug-in hybrid electric vehicles (PHEVs) will be hit with a 2.0c/km charge.

The sweetening $3000 EV subsidy is now available and applies to the final invoice prior to payment, which is deducted from the full drive-away price.

New electric cars on sale in Australia for under $68,740 include:
Hyundai IONIQ – from $48,970 (plus on-road costs)
Hyundai Kona Electric – from $60,740 (plus ORCs)
MG ZS EV – from $43,990 (drive-away)
MINI Electric – from $55,650 (plus ORCs)
Nissan LEAF – from $49,990 (plus ORCs)
Nissan LEAF e+ – from $60,490 (plus ORCs)
Renault Kangoo ZE – from $49,990
Tesla Model 3 – from $66,900 (plus ORCs)

There are believed to be only about 7000 EVs on the road in Victoria, and some 20,000 in Australia. EVs currently account for only 0.3 per cent of total new vehicle sales across the Aussie market, not including Tesla cars (which aren’t included by the US car-maker in official stats).

What’s need to make EVs popular in Australia?

Victoria’s move has been widely applauded by industry and environmental groups, although many have said it will simply only negate the damaging effects of the state’s proposed EV road-user tax.

“This is exactly the kind of momentum we need in Australia if we want to join the rest of the world in embracing the transition to electric vehicles,” said Electric Vehicle Council (EVC) CEO Behyad Jafari.

“Reaching a target of 50 per cent electric vehicle sales by 2030 is a positive and reasonable target. It will take work, but with industry, government and community working together, we can achieve this and unlock the many benefits that come with it.”

Nissan Australia’s national manager of electrification and mobility, Ben Warren, told the ABC: “The challenge with a road user charge is, in isolation, it seems like a penalty to electric vehicle owners and drivers. But when you offset that with incentives and different measures it will at least get back to a neutral starting point.”

State opposition MP Georgie Crozier lashed the government over its contradictory policies, saying “they’re taxing you on one hand and providing a rebate on the other”.

“It just demonstrates that the government has really misjudged this policy again. It's another demonstration of policy on the run,” she said.

Federal Chamber of Automotive Industries (FCAI) CEO Tony Weber said: “The incentives package for electric vehicles is consistent with actions being taken by governments across the world. However, it does bring into question the decision of the Victorian government to also introduce legislation that targets a road user charge on electric and plug-in hybrid vehicles.”

The FCAI chief, who represents all the major car-makers, proposed a different road tax that would “address all vehicle users regardless of the type of vehicle they drive, how often it is driven and the purpose of the travel”.

He also said the FCAI “has concerns over the ambitious target of 50 per cent of new vehicle sales in Victoria being electric vehicles by 2030” and warned that governments “should focus on CO2 emissions targets rather than mandating specific technologies”.

“The aim is to reduce CO2 emissions from vehicles. Governments should focus on targets, not technologies,” said Weber.

“If governments set the targets, the car-makers will deliver the range of vehicles into the market that achieve environmental outcomes and meet the needs of Australian motorists.”