North Shore locals love electric cars. But how do we make them more affordable for everyone?

Sydney's North Shore has some of the highest uptake of electric vehicles in the country; but even in an area that is one of the nation's wealthiest, finding the funds to purchase a brand new EV can be tough. 

A tax scheme in place since 2022, while limited in its range, has worked to incentivise further uptake of electric vehicles in Australia. 

But now, with the scheme under review, industry groups and politicians have raised concerns about its potential removal.

What is the tax scheme? 

• Fringe Benefit Tax is a tax paid by employers on certain benefits provided to their employees. 

• This might include covering the cost of public transport, reimbursement of expenses, or most significantly here, leasing a company vehicle.
  
  

• Since July 2022, company cars that are zero or low emissions (not including luxury vehicles) have been exempted from this tax.

• Employees will typically pay for these leases via salary sacrificing (reducing their taxable income). Depending on the car, this can result in thousands in savings for the employee.

How does it lower prices?

The immediate benefits of this tax go toward a relatively small group of Australians who are in a position to lease a vehicle from their company. 

But the secondary effect of the scheme is putting more electric vehicles into Australia, boosting our second-hand market when these new cars are sold on. 

• According to Brendon Green, a General Manager at Pickles Auctions, many of the second hand electric cars he’s resold come from company large fleets of cars purchased under the tax scheme.

Green told the Lorikeet that companies will typically hold on to a car for two to three years, during which it may have one or multiple drivers, before onselling to a second-hand dealer such as Pickles. 

He said that the market for second hand electric vehicles picked up considerably between 2024–25.

Michael, a salesperson at the Artarmon Omoda Jaecoo dealership told the Lorikeet that the tax break had been incentivising many local buyers, including those purchasing fleets. 

Fleets? For larger businesses or government organisations, electric vehicles may be purchased in large quantities to save money. These are called fleets.

Local representative: Member for Warringah, Zali Steggall, told the Lorikeet that winding back the tax scheme would be “unfortunate”. 

• According to data from the Road and Maritime Services, New South Wales’ highest proportions of electric vehicles are found in the LGAs of Ku-ring-gai and Mosman.

Steggall said that the tax break was an important incentive for the creation of a second-hand market, which would in turn create an “ecosystem where EVs become more affordable for more people”.

“There's clearly an advantage for the government to have more and more people go to electric vehicles. That puts less pressure on our fuel reserves”, she said.

Industry body: Julie Delvecchio, the CEO of the Electric Vehicle Council has argued that any changes to the scheme would deny Australians savings.

“EVs are cheaper to run and don’t face the same exposure to global oil shocks,” she said.

Who's against it? One factor potentially influencing Labor to remove the tax scheme is a report handed down by the Productivity Commission, which raised concerns about its cost effectiveness. 

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