Rebates and tax cuts urged for EVs as petrol prices hit $4 a litre

Keeping tax cuts for electric cars and reintroducing state-based rebates could help more Australians avoid rising petrol prices and should be treated as a national security issue.

Automotive groups issued the call to governments on Friday as fuel prices reached almost $4 a litre in some parts of Australia and conflict in the Middle East continued to strain worldwide oil supplies.

Encouraging more motorists to adopt electric vehicles would not only help to extend Australia’s fuel reserves, they say, but could also accelerate progress towards 2035 environmental targets.

The call comes after sales figures revealed a record number of Australian drivers invested in EVs during February, and as the federal government reviews the Electric Car Discount introduced in 2022.

The discount removes fringe benefits tax from the price of some electric cars purchased through novated leases, and has been used by more than 114,000 Australians – significantly more than anticipated.

While critics have argued the discount should be discontinued, Electric Vehicle Council chief executive Julie Delvecchio said worldwide fuel volatility proved the opposite.

“Every time there is a conflict in oil-producing regions, Australians pay the price,” she said.

“The latest spike underscores a simple truth: as long as Australia relies on imported oil, households remain exposed to global shocks beyond our control.”

As well as retaining the tax discount, Ms Delvecchio said state governments should reinstate rebates offered for the purchase of electric cars to help households reduce their spending.

“Electric vehicles help families cut their transport costs by up to $3000 a year, and most of that saving comes from avoiding the cost of petrol, which is currently over $2 a litre,” she said.

“Supporting EV uptake is not just climate policy or industry policy, it’s national security policy.”

Submissions into the Electric Car Discount review closed on February 6 but recommendations are not expected until 2027.

Australia’s national petrol stockpile sat at 36 days’ supply, Energy Minister Chris Bowen said, as well as 34 days worth of diesel.

Retaining a tax cut for electric cars could help to extend that supply, National Automotive Leasing and Salary Packaging Association chief executive Rohan Martin said, as well as lowering carbon emissions.

“Helping more Australians afford cleaner, cheaper-to-run cars makes sense,” he said.

“More EVs are in the national and household interest.”

Electric cars made up 11.8 per cent of new car purchases in February, according to figures from the council and Federal Chamber of Automotive Industries, up from 5.9 per cent in 2025.

AAP