EV industry powers down tax talk amid surging sales

Electric vehicle sales have surged to record highs, but advocates warn it shouldn’t be used as an excuse to impose taxes and cut incentives.

Australians bought 29,244 new battery electric vehicles in the three months to June 30, up from 17,901 sales in the March quarter.

It was a 63.37 per cent sales increase, with electric vehicles climbing from 6.29 per cent to 9.31 per cent of all new car sales in the June quarter, according to the Australian Automobile Association.

The sales surge comes as momentum builds for a road user charge to fund maintenance as more people switch to electric vehicles and the fuel excise falls.

But the Electric Vehicle Council says the result was short of what’s needed for a self-sustaining market, and the federal government should not withdraw incentives or impose taxes.

“We’re still in the early stages of the transition,” chief executive Julie Delvecchio said.

“Electric vehicles need to make up at least 30 per cent of all new car sales in Australia before governments can responsibly consider withdrawing incentives or imposing taxes.”

The Productivity Commission recently recommended phasing out the Commonwealth Fringe Benefits Tax exemption for electric vehicles and imposing a road user charge.

But the council argued current policies and the tax incentive had fuelled growth in electric vehicle sales in recent years.

“These proposed changes will abruptly stall the shift to (electric vehicles), which benefit everyone through lower energy bills and cleaner air,” Ms Delvecchio said.

“With transport set to become Australia’s largest emissions source by 2030, it’s essential to keep supporting and motivating Australians to choose electric vehicles.”

Treasurer Jim Chalmers says he is working with the states and territories on a possible road user charge, but has no time frame on the issue.

“The status quo on this won’t work in 10 or 20 years’ time because fewer people will be driving petrol cars and more people electric vehicles, and we still need to fund the roads,” he said on Wednesday.

“But people shouldn’t anticipate that there will be a change very soon.”

Total light vehicle sales were up 10.42 per cent in the June quarter

Internal combustion engine vehicles dominated overall sales, with 226,306 units sold, up 9.90 per cent from the March quarter total of 205,911.

But their market share fell slightly from 72.37 per cent to 72.03 per cent.

Combined battery electric and plug-in hybrid vehicle sales were 41,146 units, representing 13.1 per cent all new car sales for the June quarter.

They are up 37 per cent from the same time last year, when 30,028 battery electric and plug-in hybrid vehicles were sold, representing 9.59 per cent of sales.

Hybrid sales fell slightly, from 47,014 to 46,732, down 0.6 per cent.

The increased range of electric vehicles on the market, more affordable models and the growing number of charging options were boosting their appeal, NRMA spokesman Peter Khoury said.

“People are still in the market for new cars and they’ve just got more variety than we’ve ever had before,” he told AAP.

Aaron Bunch
(Australian Associated Press)