Businesses will buy EVs if discount bill passes, survey says

Small businesses might become big buyers of electric vehicles if the government removes fringe benefits tax on EVs.

Some 40 per cent of SMEs say they will buy an EV in the next 15 months, but only if the Electric Vehicle Discount Bill passes into law, according to a survey of 210 SME owners by Small Business Loans Australia.

The bill removes fringe benefit tax from battery, hydrogen, and plug-in hybrid cars so long as they cost less than $84,916 per vehicle.

A fringe benefit is something extra an employee gets from their employer on top of their usual wage, and the employer is responsible for covering the tax on those extra benefits each year.

Removing the tax on certain cars would mean an EV valued at about $50,000 – of which treasurer Jim Chalmers admits there are few in Australia – would save companies up to $9000 a year per car.

Zero emissions or bust

The bill was introduced to Parliament in late July but has been held up by the Greens and ACT senator David Pocock, who wants only zero-emissions vehicles to be included. Pocock says including plug-in hybrids, which use a petrol engine, amounts to a new fossil fuel subsidy.

Grattan Institute data shows cars are typically on the road in Australia for 15 years and to meet the country’s emissions targets almost all new cars sold need to be zero emissions by 2035.

With the right incentives however, small businesses could be prompted to move faster on decarbonising their vehicle fleets.

The survey showed two-thirds of SMEs would buy an EV at some stage if the bill passes.

The remainder said they wouldn’t invest in one at all, whether there was a tax incentive or not. These businesses to have fewer than 10 employees.

States of EV interest

Victorian businesses are more likely to buy an EV at some point if the bill passes, followed by New South Wales and South Australia. Businesses in Western Australia and Queensland were found to be least likely to choose an EV, although the numbers were still healthy with 62 per cent and 58 per cent saying they’d take a look if the bill passes.

“The federal government understands that the price of electric vehicles has been a major barrier to their adoption in Australia,” said Alon Rajic, founder and managing director of Small Business Loans Australia.

“Our research suggests that the removal of this barrier will have an enormous positive influence on business purchase decisions.

“It also indicates that Australian business owners support realistic government efforts to achieving net-zero emissions – so much so, that they would get financing on their vehicles in a climate of fast-rising interest rates.”