Electric vehicle subsidies scrapped late last year should be restored in the upcoming state budget, Motor Trade Association says

There’s a new push to restore – and expand – electric vehicle subsidies in this year’s state budget, but an industry group warns sales could be about to slow.

Electric vehicle subsidies axed last year should be restored in the state budget, the peak automotive body says – and the scheme should be expanded to other zero and low emission vehicles.

The Motor Trade Association says that despite growing local sales of electric vehicles, international data in markets such as the United Kingdom and United States had showed slowing uptake.

Motor Trade Association chief executive Darrell Jacobs. Picture: MTA

Chief executive Darrell Jacobs said, with cost of living front of mind for all households, affordability remains one of the top considerations for South Australians when purchasing their next vehicle, and could also affect sales.

“At a time when electric vehicles still command a price premium, consumer incentives must remain if we are to drive our decarbonisation,” chief executive Darrell Jacobs said.

In its 2024-25 budget submission, the MTA has argued the $3000 subsidy for electric vehicles valued below $68,750 should be reinstated.

The incentive was introduced by the former Liberal government in October 2021 but cut by Labor in December’s Mid-Year Budget Review.

Only about 2500 of the originally-planned 7000 subsidies had been claimed at the time.

The MTA is also pushing for a $2000 incentive for plug-in hybrid vehicles and $1000 for traditionally hybrids.

Mr Jacobs said South Australia was challenged by its unique distance and geography, which mean hybrids “must form part of our strategy”.

He said the incentives would help the state cement its position as a nation-leader in decarbonisation of transport.

“Whether through solar, wind or battery uptake, South Australia has always been at the forefront of efforts towards net-zero,” he said.

Treasurer Stephen Mullighan said the electric vehicle subsidy was no longer necessary given Commonwealth and other initiatives to drive electric vehicle sales.

“The Commonwealth incentives are significant; for a $70,000 electric vehicle the Fringe Benefits Tax exemption could provide a $12,000 benefit to an employer, plus the benefit of removing the 5 per cent import tariff on certain vehicles could deliver a benefit in excess of $3000 per vehicle,” he said.

He said the decision to axe the state-based incentive with consistent with what has happened in NSW and Victoria – and EV sales continued to increase.

“The Malinauskas government has also abolished the EV tax, introduced under the former Liberal government, which would have slugged a typical motorist travelling 15,000km each year an extra $375 per year,” he said.

The state budget will be delivered on June 6.