This is the report of the review of the Electric Car Discount (ECD). The ECD comprises exemptions for eligible zero or low emission vehicles from Fringe Benefits Tax (FBT) and from import tariffs. The immediate goal of the ECD was to reduce the costs of EVs and thereby increase EV uptake. The underlying goals were to reduce transport-related carbon emissions and reduce fuel use across the light vehicle fleet. 

The report looks at the effectiveness of the ECD and whether it should continue. The review was also asked to consider which types of vehicles should attract the ECD. The review recommended that the government consider changes to better manage the costs of the ECD.

Key findings

• The ECD is estimated to have encouraged electric vehicle (EV) sales in its first three years.
• It is estimated that the ECD resulted in around 64,000 additional battery EV (BEV) sales.
• Each additional EV leads to reduced carbon emissions over its lifetime. 
• The revenue costs of the ECD are increasing significantly. 
• Vertical and horizontal inequity concerns about the ECD are prominent. 
• While the ECD appears to have successfully encouraged EV uptake, the changing context in which it operates means, over time, alternative policy approaches may be more fiscally efficient and equitable.