Australia Electric Car Discount Review Signals EV Policy Shift

On October 30, the Australia Electric Car Discount review emerged as a key policy milestone as the federal government outlined plans to formally assess the scheme’s effectiveness. Announced on December 12, 2025, the review evaluates how the incentive has influenced electric vehicle adoption, affordability, and emissions reduction since its launch in mid-2022.
Introduced to support the transition to cleaner mobility, the Electric Car Discount removed fringe benefits tax and import tariffs on eligible electric vehicles. This policy intervention has reshaped buying behaviour, lowered ownership costs, and broadened the range of electric models available to Australian consumers.
Australia Electric Car Discount and Its Market Impact
Since implementation, the Australia Electric Car Discount has played a decisive role in scaling electric vehicle penetration. Electric vehicles now account for roughly one in ten new vehicle sales nationwide, marking a significant shift in Australia’s automotive landscape.
Key outcomes linked to the policy include:

• Nearly 100,000 vehicles purchased under the tax exemption framework
• Expansion of EV model availability to more than 160 options
• Increased presence of lower-priced electric vehicles
• Strong uptake across outer suburban regions where running costs matter most

These developments highlight how fiscal incentives can influence mainstream vehicle purchasing decisions rather than remaining confined to early adopters.
Australia Electric Car Discount Review Scope and Objectives
The statutory review will assess the first three years of the Australia Electric Car Discount, focusing on its economic, environmental, and distributional impacts. The evaluation will help determine whether the policy remains fit for purpose as the EV market matures.
Areas under consideration include:

• Cost implications for government revenue
• Equity of benefits across income groups and regions
• Contribution to emissions reduction targets
• Alignment with future transport and industrial strategies

The estimated fiscal cost of the scheme is projected at approximately AUD 1.35 billion in the 2025–26 financial year, making the review a critical input for long-term budget planning.
Public Consultation and Future Policy Direction
As part of the Australia Electric Car Discount review, the government has invited public and industry submissions until February 6, 2026. Insights gathered through this process are expected to inform broader electric vehicle policy, transport decarbonisation strategies, and incentive design going forward.
The findings are likely to shape how Australia balances affordability, fiscal responsibility, and emissions goals as electric vehicles move closer to mass adoption.