Amid ongoing efforts to accelerate the transition to cleaner mobility, the Albanese Government's Electric Car Discount has been identified by the nation's peak body for novated leasing as influencing electric vehicle (EV) adoption, emissions outcomes and affordability trends in Australia.

In its submission to Treasury's review of the Electric Car Discount, also referred to as the EV fringe benefits tax (FBT) exemption, the National Automotive Leasing and Salary Packaging Association (NALSPA) outlined the outcomes it attributes to the policy across several areas.

- Accelerating EV uptake: The policy has been associated with the addition of more than 100,000 EVs to Australian roads to date and an increase in battery electric vehicle (BEV) market share from 1.4% in 2021 to 8.3% in 2025.

- Reducing transport emissions: Emissions reductions of between 160,000 and 200,000 tons of CO2-e per year have been estimated, based on EVs sold with support from the policy.

- Improving BEV affordability and access: The discount has coincided with broader model availability, an average reduction in vehicle prices of 8.6%, and a six-fold increase in second-hand BEV sales since the policy was introduced.

- Providing cost-of-living relief: The measure has been linked to changes in household transport costs through lower upfront vehicle costs and reduced ongoing running expenses, particularly among outer-suburban working households.

NALSPA chief executive Rohan Martin said the Electric Car Discount had produced outcomes aligned with its stated policy objectives.

"The Electric Car Discount was introduced to increase EV uptake, reduce emissions and improve affordability, and it has produced measurable outcomes in these areas," Martin said.

The policy has been associated with wider access to lower-emission vehicles. However, Australia's BEV market share remains approximately 40% lower than that of comparable economies, indicating ongoing gaps in adoption.

"The policy initially aimed to add around 5,000 EVs to Australian roads in its early years, but more than 100,000 EVs have been added to date. The Electric Car Discount has seen higher uptake among outer-suburban families and is estimated to account for at least half of all EVs sold in Australia," Martin said.

Amid continued cost-of-living pressures, the Electric Car Discount has been identified by NALSPA as having a role in influencing household vehicle purchasing decisions by lowering upfront and ongoing transport costs.

"This is currently the main policy supporting EV uptake. Incentive-based measures are commonly used to encourage early adoption of new technologies, as seen previously with rooftop solar and home battery systems," Martin said.

According to NALSPA, consumers have reported that factors such as vehicle pricing, charging availability and range concerns would have prevented EV adoption in the absence of the discount. The policy has been identified as an influencing factor in purchase decisions and subsequent changes in vehicle choice.

"The Electric Car Discount is generating economic, environmental and health impacts that exceed its fiscal cost," Martin said.

Despite these outcomes, challenges remain. Australia continues to record lower EV market share than several international peers, and transport emissions are projected to become the country's largest source of emissions by 2030. The Climate Change Authority has stated that a twenty-fold increase in EV numbers would be required within the next decade to meet national climate targets.

"Meeting these targets will require continued policy intervention, including measures such as the Electric Car Discount," Martin said.