NSW announce new EV policy: $3,000 rebate, $0 stamp duty. States doing the heavy lifting without federal EV direction

    Image source: Plugshare

    This morning the residents of New South Wales are waking to the news that their state Government has announced a new electric vehicle policy. At an estimated cost of $500 million, EV adoption will be increased with a new $3,000 rebate on EVs under $68,000, up to 25,000 vehicles.

    Stamp duty on those EV sales which meet that criteria (up to $78,000), will also be reduced to $0. The plan is set to be introduced in this week’s state budget and in effect by September 2021.

    If we use the most popular EV in Australia as an example, A Tesla Model 3 SR+ currently attracts stamp duty costs of A$2,325. If we take the current Drive Away Price of a Model 3 SR+ at A$67,798 and apply the $3,000 rebate and $2,325 saving in Stamp Duty ($5,325 total saving), you could be into a Tesla for just A$62,473.

    EV owners in NSW will also get a couple of other perks, which includes the use of car pool lanes, something we’ve seen work successfully overseas, as well as access to priority charging spots.

    “We’re charging up the nation to make NSW the Norway of Australia when it comes to electric vehicles.“

    Environment Minister. Matt Kean

    The $3,000 rebate on EVs, matches in value, what Victoria recently introduced, and with more EVs on the way, expected in this price bracket, like the Hyundai Ioniq 5, a $3,000 discount from the state would certainly go a long way and ultimately could help sway buyers.

    It would be great to see the Federal Government step in and also offer EV incentives, which occurs regularly overseas, helping reduce the up-front cost of an EV purchase, while allowing owners a lower cost of ownership over the life of the vehicle and help achieve emission reductions in our transport sector.

    NSW will also spend more than $30 million on upgrading the state government’s car fleet with electric vehicles, which are likely to be on-sold within five years and spurring the secondhand market. This is great news for those who aim to buy an EV for their next vehicle but see EVs as something still out of their price bracket.

    “With new cars staying on the road 15 years on average, the vast majority of new cars sold in NSW need to be EVs by 2035 to achieve net zero emissions by 2050,”

    Environment Minister. Matt Kean

    NSW moving to distance-based charging

    Now for the bad news. NSW will also introduce an distance-based charging, which mirrors the controversial Victorian model. Copying the same 2.5c per km rate for EVs, and 2c for plug-in hybrids, NSW’s implementation of the scheme is dramatically different than Victoria’s which starts July 1st.

    NSW plan won’t apply the distance-based charging (or EV tax) until 2027, more than 5 years from now, or once electric vehicles make up 30% of new car sales, whichever comes first. This shows that New South Wales gets it. Replacing the lost revenue from the fuel excise will become an increasingly difficult challenge for Governments around the world and a distance-based charge is certainly a way to resolve that.

    By delaying the introduction of the charge, they allow EV adoption to grow from the <1% adoption we have now, to close to one-third of new car sales, introducing the charge will help replace that revenue. By then the battery costs should have dropped significantly and the price of an EV be at or below the comparable ICE alternative.

    What’s also important is to announce the distance-based charging now and give car buyers a long time to get used to the idea, meaning it won’t be a surprise and should be less politically challenging to introduce at the time. Nobody likes new taxes, but if this becomes seen as the same cost of driving applied differently, then I think it can work, as long as state Governments don’t jack the price from 2.5c/km, if they have budget holes to fill.

    This is also an interesting shift in revenue models by the states. Previously the Government would collect the fuel excise on every litre of petrol or diesel, then return it (or a portion of) to the states. With this new model to charge EV owners (soon to be all vehicle owners), they receive the income directly.

    Via SMH.

    Jason Cartwright
    Jason Cartwright
    Creator of techAU, Jason has spent the dozen+ years covering technology in Australia and around the world. Bringing a background in multimedia and passion for technology to the job, Cartwright delivers detailed product reviews, event coverage and industry news on a daily basis. Disclaimer: Tesla Shareholder from 20/01/2021


    1. That’s because you drive a “gas guzzler”. Mine works out at 2.75cents/km at my average fuel efficiency of 6.5L/100km, so the 2.5cents/km is quite fair.
      The argument was never about not paying a fair share of tax, but about the timing of it – charging this tax will slow down the adoption of EVs right at its infancy.

      Since the new tax won’t come in until 2027 when EVs should have become established in the market, this is quite a good policy.
      Dropping Stamp Duty in place of the new tax also makes sense as EVs currently pay more stamp duty due to their higher initial price.
      New rebates will also drive faster EV adoption leading to more choice at the second hand market, especially when the Govt fleet vehicles get on-sold.

      It’s not as nice as the NZ incentive, but a genuine incentive nonetheless and one that strikes a good balance. It has incentives, taxes to replace future losses from fuel excise, and investments for the infrastructure EVs badly need.

      Now if only they added a training budget to train more mechanics to service EVs…

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