NSW may scrap EV rebates in Australia’s biggest electric vehicle market

NSW could become the second Australian state to put the brakes on electric vehicle incentives after Labor Premier Chris Minns confirmed he was considering scrapping subsidies in the upcoming budget.

His announcement comes after treasury estimates found there was no clear evidence rebates were boosting electric vehicle sales in the state despite their growing popularity.

New electric vehicles less than $68,750 attract a $3,000 subsidy in NSW and new and used EVs up to $78,000 are exempt from stamp duty – but will attract a road user charge from 2027.

Minns said the government would consider changes to electric vehicle rebates after advice showed incentives could be raising vehicle prices.

“We’ve got a subsidy in place that we think is pushing up the costs of EVs and we’re seeing EVs take up from about two per cent to eight per cent in the marketplace,” Mr Minns said on Monday.

“Given all of those moving policy changes, we’re going to have to say something about it in the… budget, which is due in a month’s time, but any government faced with that set of policy circumstances would have to take it into consideration.”

He said the government was also waiting for the outcome of a High Court challenge to Victoria’s electric vehicle road user charge, which would determine if it was an excise and allowed under the Constitution.

The NSW government had committed to introducing a similar charge in 2027.

Electric Vehicle chief executive Behyad Jafari said talk about removing subsidies was premature and likely to cause uncertainty for motorists who were increasingly choosing low-emission vehicles.

Electric car sales more than doubled in Australia over the past year and made up 8.4 per cent of new vehicle sales between January and June, which Mr Jafari said was “a result of policy actions”.

“The mix of state and federal rebates have had a sizeable impact in our market and are finally putting us on track towards being able to achieve emission-reduction targets and they’ve come at a time when petrol prices have gone over $2 a litre,” he said.

“This is the single most effective way of addressing the cost of living – by helping people avoid $2400 a year in fuel costs.”

In 2021, the NSW government committed to delivering 25,000 electric vehicle rebates and had paid out 7,821 of them by July 31.

Other states to offer EV incentives include Western Australia at $3500, South Australia’s $3000, the ACT with zero-interest loans up to $15,000 and Queensland increased its means-tested rebate to $6000 in July.

Victoria became the only state to remove its $3000 rebate in June, with a government spokeswoman saying the scheme would end almost a year earlier than planned as it had “laid the groundwork” to meeting its goal of 50 per cent electric vehicle sales by 2030.

AAP