Federal Budget 2022: How to save $9000 on an electric car

The cost of buying an electric vehicle in Australia is being slashed at the same time fuel excise is set to soar by more than 50 per cent. Here’s how you could save thousands on your next car.

The cost of an Electric Vehicle will be slashed but government revenues from fuel excise will soar by more than 50 per cent in just four years, Tuesday night’s Budget papers reveal.

While the petrol excise added just a bit more than $5 billion to government coffers in 2021/22, thanks to a temporary cost-of-living discount, it is expected $7.65 billion will be raised by the 2025/26 financial year.

Motorist groups including the Australian Automboile Association have called for a review of the fuel excise, as an ever-increasingper centage of cars on the road are either Electric Vehicles (EVs) or hybrids.

Making good on an election promise, the Albanese government announced it would scrap the Fringe Benefits Tax and import tariffs payable on EVs, a move which is expected to bring the cost of an average EV down by $4700 for an individual and $9000 for an employer.

The cost of an average Electric Vehicle will be down by about $9000. Picture: Getty Images

Budget papers show government income from the 5 per cent luxury car tax will fall by an expected $2.4 billion next financial year.

An additional $275 million was allocated for the construction of 117 EV and hydrogen-cell refuelling stations along majorfreight routes.

While Labor stuck to its pre-election script on EVs for its first Budget, another key promise – that family power bills would come down by $275 per year by 2025 – was not mentioned by Treasurer Jim Chalmers in his Budget speech.

While some industry analysts have warned power bills could spike by as much as 30 per cent because of Russia’s invasion of Ukraine, the Budget papers said the government’s ‘Rewiring the Nation’ program would “drive down power prices”.

While the key projects under Rewiring the Nation had already been announced – the Kerang Link transmission line between NSW and Victoria, and the Marinus energy cables between Victoria and Tasmania – the Budget revealed $20 billion would be provided in low-cost finance “for the urgent upgrade and expansion of Australia’s electricity grid at lowest cost”.

Originally published as Federal Budget 2022: How to save $9000 on an electric car