SA Govt proposes $3000 EV subsidy, defers mileage tax

electric vehicle being charged. — Photo by Charlotte Stowe on Unsplash.

The South Australian Government has announced a plan to pay $3000 subsidies to 6000 people who buy a new electric vehicle (EV) in the state.

In doing so, the SA Government joins New South Wales, Victoria, the ACT, and Northern Territory in recently lobbying financial incentives on EVs, while Queensland is still finalising its new Zero Emission Vehicle Strategy.

The proposed up-front, time-limited subsidy would be provided to up to 6000 full electric vehicles purchased in South Australia subject to the Government’s new Motor Vehicles (Electric Vehicle Levy) Amendment Bill 2021 passing Parliament.

The Bill, introduced to Parliament on Thursday last week, also extends by up to five years the introduction of the proposed Electric Vehicle Road User charge from 1 July 2022 to 1 July 2027, or when the sale of electric vehicles reaches 30 per cent of new motor vehicle sales in SA, whichever is earlier.

The SA Government received criticism before making this call. The New South Wales Government also delayed the introduction of its road-user charge, whereas Victoria did not – its tax passed parliament in May.

SA Treasurer Rob Lucas said this new subsidy package would bring the total level of state government support for EVs currently on the table to $36 million, doubling the $18.3 million investment made as part of the Electric Vehicle Action Plan, announced in the State Budget 2020-21.

“We are committed to investing to help drive the take-up of environmentally friendly zero and low emission vehicles while ensuring there is a long-term sustainable model for critical road funding,” Mr Lucas said.

“Our proposed new $3000 state government-funded subsidies for new full electric vehicles are expected to provide a further incentive for those motorists who may be considering a purchase of this type.

“The subsidies, which are consistent in value to those offered in Victoria, are contingent on the Bill passing the Parliament and would be introduced at that time. While we accept that looks unlikely at this stage, we remain hopeful.

“We have consulted widely with industry, manufacturers and other interest groups and, as a result of that feedback, have decided to extend the introduction of the proposed Electric Vehicle Road User Charge by up to five years.

“Currently, drivers of zero and low emission vehicles pay little or no fuel excise.

“But ultimately as the State transitions towards a higher concentration of zero and low emission vehicles, there will be a corresponding reduction in the number of motorists paying fuel excise which contributes to vital road funding to help maintain and improve the state’s road network.

“A road user charge is necessary to ensure that all vehicle owners, regardless of what car they drive, contribute to the upkeep of our roads into the future.”

Commenting on the proposal, the Federal Chamber of Automotive Industries – lobby group for Australia’s car brands – called it a “strong statement.”

“The approach of the Government… is consistent with actions being taken across the world to support the introduction of new vehicle technologies that reduce CO2 emissions and meet the mobility needs of a growing number of motorists,” said FCAI chief executive Tony Weber.

“The proposed customer subsidy of $3,000 for electric vehicles provides a positive signal to customers and car companies that this emerging technology is a key part of our transportation future.”

Sales of electric and plug-in hybrid vehicles surged in Australia over the first half of 2021. Their combined market share about doubled compared with last year’s tally.

A total of 7248 EVs were sold in Australia between January and June, according to the Electric Vehicle Council market report, in addition to 1440 plug-in hybrids (PHEV).

This combined 8688 sales equalled 1.57 per cent market share, up from 0.78 per cent share in 2020. Excluding light commercials, the growth stands at 2.0 per cent. More EVs were sold in the first half of 2021 than all of 2020.