Quick Read
- Polestar Australia urges the government to maintain EV incentives amidst a pending review of the subsidy scheme.
- The FBT exemption, introduced July 1, 2022, benefits EVs below the $91,387 LCT threshold, saving novated lessees substantial amounts.
- Scott Maynard, Polestar Australia’s MD, argues the government is falling behind its 50% EV penetration goal by 2035.
- EV market share grew from 3.8% in 2022 to 8.3% in the past year, with light vehicles surpassing 10% EV share.
- Polestar suggests re-evaluating billions in subsidies for combustion vehicles, particularly diesel dual-cab utes, instead of cutting EV support.
SYDNEY (Azat TV) – Polestar Australia has issued a strong call to the Australian government to maintain its existing electric vehicle (EV) incentives, particularly the Fringe Benefits Tax (FBT) exemption, amidst an ongoing review of the subsidy scheme announced last December. The EV-only automaker argues that altering these policies now would prematurely undermine efforts to accelerate EV adoption and hinder the nation’s ambitious climate goals.
Since its introduction on July 1, 2022, the FBT exemption has applied to electric vehicles priced below the Luxury Car Tax (LCT) threshold for fuel-efficient vehicles, which is set at $91,387 for the 2025-26 period. This policy has offered substantial annual savings for novated lessees, with an estimated 100,000 EV buyers benefiting from the scheme to date.
A Call for Continuity Amidst Review
Scott Maynard, Managing Director of Polestar Australia, emphasized that now is not the time for changes to the current FBT relief settings. He highlighted the government’s target of achieving 50 percent electric vehicle market penetration by 2035, noting that current trends indicate Australia is falling behind this crucial objective. While the electric vehicle market share has seen growth, rising from 3.8 percent of new vehicle sales in 2022 to 8.3 percent in the past year, Maynard contended that this progress is still insufficient to warrant modifying a program that is only just beginning to yield results.
Maynard expressed confusion over concerns that the program might be overspent, especially when its outcomes have yet to meet initial expectations. He suggested that any perceived issue with funding might stem from an initial under-budgeting of the initiative rather than an actual over-expenditure relative to its intended impact. He further reinforced his position by pointing out that the share of electric vehicles in the light vehicle market has already surpassed 10 percent and continues its upward trajectory, making the case for maintaining the program even stronger.
Re-evaluating Combustion Vehicle Subsidies
Instead of considering cuts or alterations to electric vehicle incentives, Maynard proposed that the government should redirect its focus towards re-evaluating subsidies for combustion vehicles, particularly diesel-powered dual-cab utes. These vehicles currently qualify for FBT exemptions under specific conditions, which often require drivers to meticulously document their usage to ensure compliance.
He argued that addressing the substantial government backing for dual-cab utes, which has amounted to billions of dollars, would represent a more effective and responsible use of public resources than reconsidering support for the nascent electric vehicle market. Maynard highlighted a notable market dynamic, stating that Australia is currently selling one and a half times more dual-cab utes than there are tradespeople, suggesting a potential misalignment of government incentives with genuine economic needs.
Polestar, as an EV-only brand, directly benefits from the existing FBT exemptions, as both its Polestar 2 liftback and Polestar 4 mid-size SUV models fall below the LCT threshold. This positioning allows the company to capitalize on the current policy landscape, reinforcing its advocacy for the program’s continuation.
Implications for Australia’s EV Future
Maynard urged the government to shift its attention towards the substantial expenditures on conventional vehicles rather than jeopardizing the emerging electric vehicle market. He underscored the numerous benefits EVs offer Australians, including more varied choices, lower running costs, enjoyable driving experiences, and clear environmental advantages. Preserving these incentives, according to Polestar, is critical for fostering a competitive and sustainable automotive landscape in Australia.
Polestar Australia’s intervention underscores the critical juncture at which Australia’s EV policy stands, highlighting the tension between fiscal prudence and the long-term strategic imperative of decarbonizing the transport sector, with the outcome of the government’s review poised to significantly shape the pace of EV adoption.