Polestar slams government over potential EV incentives facing the axe

Anthony Albanese’s latest move has sent one of Australia’s biggest industries around the bend and they are now fighting back.

A top electric vehicle brand has accused the government of “conveniently ignoring” massive tax concessions handed to fuel-hungry utes, while considering cuts to electric vehicle incentives in the name of cost-efficiency.

In response to the Productivity Commission’s recommendation to scrap Fringe Benefits Tax (FBT), Polestar Australia’s managing director Scott Maynard said the government is targeting the wrong policy if it’s serious about reaching net-zero transport emissions.

“The FBT exemption for electric vehicles is a necessary exemption to drive uptake,” he said.

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Forget the dog, Albo and Jim have EV tax concessions on their mind.

Maynard explained that EVs still make up “just under 7 per cent” of new car sales, below the government’s projections, so “it should still be within the budgeted range”.

The FBT exemption, introduced in 2022, currently allows EV vehicles under approximately $90,000 to be purchased through novated leases tax-free, saving buyers thousands.

However, the Productivity Commission recently labelled the FBT exemption “duplicative” alongside the New Vehicle Efficency Standards (NVES), but Polestar says the two work together – not against each other.

“The NVES fines car brands that are unable, or unwilling, to alter their product offering to Australian new car buyers to include more low-emission and zero-emission vehicles,” he said.

“The FBT exemption, by comparison, rewards motorists for making the transition to electric vehicles, which have ended up on sale directly as a result of the NVES policy.

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A owner recharging his Polestar 3. Picture: Supplied

OH, THE IRONY

Maynard described the system as a necessary “push” and “pull”, with NVES pressuring automakers to supply greener vehicles, and FBT incentives helping customers afford them.

Polestar said the irony is that while EV tax breaks are under scrutiny, guzzling trucks continue to enjoy taxpayer support and distort the market.

“We are supportive of tax breaks for tools of trade vehicles, such as single-cab utes; however, it’s clear we have gone well beyond what’s reasonable when dual-cab utes are disproportionately represented in our top-selling vehicle lists,” Maynard said.

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Polestar Australia’s managing director Scott Maynard has taken aim at the government’s mixed messaging on emissions, calling for urgent tax reform to support electric vehicles. Photographer: Andrea Francolini

According to the Australian Institute, there are at least 1.5 times as many utes as tradies in Australia, suggesting that many are being bought for private use – not as genuine work tools.

“More than 600 American pick-up trucks were registered in July alone. With many variants priced well over $100,000, there is no case to continue supporting these trucks with FBT exemptions and Luxury Car Tax concessions,” Maynard said.

“It’s clear that tax concessions are distorting the popularity of these vehicles, which are being subsidised by taxpayers.”

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Electric vehicles are being asked to do the heavy lifting on emissions yet incentives are under threat. Picture: supplied

Maynard added that the tax perks have been in place for 24 years, and removing them does not mean that the government does not support tradies.

“The product development of these vehicles has shifted toward luxury cars and away from tool-of-trade vehicles. This change – and the generous concessions provided over more than two decades – represents an opportunity for reform,” he said.

NO MORE GIVEAWAYS

Polestar is urging the Treasurer to consider which handouts reduce emissions and which are simple giveaways.

“The agenda here seems clear, save taxpayers money by reducing unnecessary handouts. With CO2 targets looming large and public interest in reducing our carbon footprint, now would be the time to prioritise electric vehicles,” Maynard said.

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Despite their growing size and emissions, dual cab utes continue to benefit from tax breaks. Pictured – Ford Ranger XLT, Toyota HiLux SR, Isuzu D-Max X-Terrain. Picture: Supplied

Maynard also warned against introducing road-user charges too early in the transition to EVs, saying such a move could slow adoption.

“Think carefully about a road user charge to ensure we don’t stall the good work being done on the transition to electric vehicles. This needs to be part of a wider review and reform of charges levied against Australian drivers,” he said.

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Originally published as Polestar slams government over potential EV incentives facing the axe