Electric Vehicle Council criticizes Productivity Commission's proposal to eliminate EV subsidies
The electric vehicle (EV) industry in Australia is facing a critical juncture, with the Productivity Commission proposing to phase out some federal EV incentives, raising concerns about potential negative impacts on EV uptake.
Julie Delvecchio, the CEO of the Australia's Electric Vehicle Council (EVC), has expressed her concern about the Commission's recommendations, stating they send mixed signals at a crucial time in the electric transition. The EVC, led by Delvecchio, opposes the Commission's recommendation to phase out specific EV incentives, particularly the Fringe Benefits Tax (FBT) exemption for EVs.
Delvecchio criticizes the proposal to remove the Electric Car Discount, likening it to ripping out the charging cable halfway through a trip. She argues that the Discount has been a significant factor in increasing electric vehicle uptake, particularly for fleets and everyday workers who couldn't previously afford to go electric.
The EVC CEO applauds the Commission's recommendation of a new emissions-reduction incentive for heavy vehicles not covered by the Safeguard Mechanism. However, she advocates for increasing EV uptake by expanding purchase incentives like the Electric Car Discount and state-based discounts, rather than removing them.
Tesla, the largest EV brand in Australia, is compensating by providing its own sales incentives to maintain momentum. Despite these efforts by manufacturers and some state governments, the Commission’s suggestion to phase out federal incentives could slow the pace of EV adoption by increasing running costs and prices.
Industry groups like the EVC warn that removing incentives risks slowing EV adoption and increasing costs for consumers. The Commission's report also suggests phasing out the exemption of EVs from vehicle stamp duty and registration discounts for state and territory governments.
The Productivity Commission's report, titled Investing in cheaper, cleaner energy and the net zero transformation, was published recently. The report calls for consistent incentives and faster approvals to support Australia's net zero transformation. Commissioner Barry Sterland stated that the right policy settings can limit the costs of decarbonizing and speed up the approvals for clean energy.
Joshua S. Hill, a Melbourne-based journalist who has been writing about climate change, clean technology, and electric vehicles for over 15 years, has been reporting on electric vehicles and clean technologies for Renew Economy and The Driven since 2012. Hill's preferred mode of transport is his feet.
Despite the concerns raised by the EVC and other industry groups, the Commission's recommendations are part of a broader effort to transition Australia towards a net zero emissions future. Whether these recommendations will be implemented remains to be seen, but one thing is clear: the shift to clean transport is accelerating, and supportive policies are crucial to its success.
Technology plays a crucial role in the EV industry, with initiatives like the Electric Car Discount serving as significant factors in increasing electric vehicle uptake. However, the Productivity Commission's suggestions to phase out federal incentives could potentially slow the technology's adoption, and consequently, the shift to clean transport.
