The EV tax space in Australia has been made more complex by yesterday’s Federal Government announcement of a New Vehicle Efficiency Standard from 2025, with accompanying green rebates. Vehicle suppliers – defined under the Road Vehicle Standards Act 2018 as companies that “provide” vehicles to the Australian market, such as car importers - will be incentivised to sell greener and cheaper-to-run vehicles. Eligible vehicles will include EVs, hybrids, and others employing fuel efficient technologies. According to the announcement the NVE Standard will save buyers AUD17k over the life of their newly purchased vehicles.
How will it work? Each supplier would have an average yearly Co2 target (cap) for the collective fleet of new vehicles they supply in Australia. They will receive credits for vehicles that meet or beat the target and receive debits for vehicles which fall short. Suppliers that remain in debit can make it up over the following two years, purchase credits from complying suppliers, or pay a penalty for each gram of Co2 above the target cap. Target caps will be lowered each year, with suppliers needing to reduce new vehicle emissions by over 60% by 2030.
With EV rebates being axed in Victoria, and indeed reversed with a road user tax that is now under constitutional challenge, with the NSW scheme finishing a few weeks ago, and with Queensland’s new car rebate doubled to AUD6k last year, the competitive landscape in the automotive industry has never been more complex. In this highly technical area there will be winners and losers. Understanding the specific design and implementation of the NVE Standard and how it will impact on pricing will be important for suppliers and consumers alike.
Get in touch with Alistair Bridges and Emily Schilling of Moulis Legal’s regulatory team to learn more.