Polestar Australia has called on the Australian government to abandon its long-standing electric vehicle (EV) incentives after announcing in December last year that its EV subsidy system would be reviewed.
As of July 1, 2022, electric vehicles priced below the Luxury Car Tax (LCT) threshold for fuel efficient vehicles ($91,387 for 2025-26) will be exempt from the Fringe Benefits Tax (FBT), potentially saving novated lessees thousands each year.
The Australian Treasury estimates that around 100,000 electric vehicle buyers have benefited so far. After the review promised when the rebate was passed, the government could terminate, renew or change the system.
According to Polestar Australia managing director Scott Maynard, “this is not the time to change attitudes towards FBT facilitation for electric vehicles”.
“The government’s published target is for 50 percent of the market to buy electric vehicles by 2035. They are far from that, and they are not on track to get there,” he said.
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“I don’t understand how the program could be overspent when the results are too low; the two just don’t fit together. So yes, it would suggest that the problem here is that the budget was too low to begin with.”
The share of electric vehicles in the Australian new vehicle market has undoubtedly increased since the system was introduced almost four years ago. In 2022, electric vehicles accounted for only 3.8 percent of the market and last year the share of the overall market excluding heavy commercial vehicles was 8.3 percent.
“It’s great to see that the share of electric vehicles in the light vehicle market has now risen to over 10 per cent this year and continues to rise,” Mr Maynard added.
“That’s great, but at the first signs of success I don’t think it’s time to dismantle or even change the program.”
Instead, Mr Maynard called on the Government to look at sales incentives for internal combustion engine vehicles such as: B. to deal with diesel-powered crew cabs, which may be eligible for FBT exemptions if the vehicles provided to employees by employers are only used for “limited private use”.
Therefore, drivers must keep accurate records to prove their work vehicle is not being used “as a family taxi” or “for personal weekend trips” – according to the Australian Taxation Office – in order to be eligible for the FBT exemption.
“If the government is looking to rationalize its spending through FBT subsidies, I strongly believe it should first look at the money it is investing in dual cab sales before looking at electric vehicles,” Maynard said.
“We all accept that electric vehicles now offer Australian drivers ample choice, lower running costs and vehicles that are fun and easy to own, and we all accept that the cleaner air they give us brings tangible and measurable health benefits, but we don’t think twice about how many billions of dollars the government is pouring into double cab sales, so we now sell one and a half times as many vehicles as tradespeople.”
“We sell these things with an FBT subsidy for prices in excess of $200,000. That seems to me to be a much easier win than focusing on a part of the market that’s doing good things but not enough of them.”
Of course, as a pure electric vehicle brand, Polestar benefits from FBT exemptions, as both the Polestar 2 liftback and the Polestar 4 mid-size SUV (but not the Polestar 3 large SUV) are priced below the LCT limit.
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