Subsidies were introduced in September 2021 and provide a rebate of up to $3,000 on vehicles with dutiable values up to $68,750; stamp duty will also be waived for eligible vehicles worth up to $78,000.
However, according to Mr. Minns’ analysis, subsidies aren’t having the desired impact of increasing electric-vehicle sales and actually pushing prices upward due to increased demand caused by subsides.
“Our subsidy appears to be pushing up costs for electric vehicles (EVs) and we have seen them take hold in the marketplace at about 2-8%,” explained Minns.
“Given all of these policy shifts, we need to address it in our budget for fiscal 2017 – which is due next month – just as any government facing similar policy circumstances must consider them carefully.”
If the New South Wales government decides to slash electric-car subsidies, it would mark a second state action within months – after Victorian’s $3,000 subsidy for zero emissions vehicles was quietly eliminated in July due to lower-than-anticipated take-up rates.
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New South Wales government officials are waiting for the results of Victoria’s high court challenge against their controversial EV road-user charge to decide if NSW will implement their own electrified car road user fee by 2027 or not.
The Zero and Low Emission Vehicle road-user fee (ZLEV) requires owners of electrified vehicles to record the mileage travelled each year and pay an annual tax in addition to vehicle registration costs.
Some have criticized the ZLEV as unfair to electric-vehicle owners who already pay more for their vehicles than traditional petrol or diesel cars. But Victoria government officials defended their charge saying it’s necessary for maintaining road networks.
Decisions on whether or not to end New South Wales electric-car subsidies can be complex. On one hand, they contribute to driving up prices of new vehicles while increasing uptake of these eco-friendly cars which help lower greenhouse gas emissions.
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New South Wales government must consider these factors carefully when making its decision.
New South Wales government must consider more factors than just Mr. Minns’ arguments when making its decision regarding electric vehicle subsidies. They include impact analysis on state economy (estimated at costing an estimated $100 million annually) as well as environmental implications (electric vehicles produce zero emissions therefore helping reduce air pollution through subsidies).
New South Wales government officials will make an important decision regarding electric-car subsidies in the coming months, closely watched by other states and territories as well as automotive industry stakeholders.
