FBT-Free Electric Cars

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FBT-Free Electric Cars 


New legislation before Parliament, if enacted, will make zero or low emission vehicles FBT-Free. We explore who can access the concession and how.

Electric vehicles (EV) represent just under 2% of the new car market in Australia but it is a rapidly growing sector with a 62.3% jump in new EV registrations between 2020 and 2021.


Making EVs FBT-Free is just the first step in the Government’s plan to make zero and low emission vehicles the car of choice for Australians, focusing on affordability and overcoming “range anxiety” by:  

  • Cutting import tariffs
  • Placing EV fast chargers once every 150 kilometers on the nation’s highways
  • Creating a national Hydrogen Highways refueling network, to deliver stations on Australia's busiest freight routes
  • Converting the Commonwealth fleet to 75% no-emissions vehicles

It is on this last point, fleet cars, that the FBT exemption on EVs is targeted. In Australia, business account for around 40% of light vehicle sales according to a research report by Griffith and Monash Universities. However, EV sales to business fleets comprised a mere 0.08% of the market in 2020. The Government can control what it purchases and has committed to converting its fleet to no-emission vehicles, but for the private sector, there is a wide gap between the total cost of ownership of EVs and traditional combustion engine vehicles. It’s more expensive overall and the Government is looking to reduce that impediment through the FBT system.


Considering an electric vehicle?

Our accountants can help you understand the ins and outs of electric vehicles and Fringe Benefits Tax.


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