Owners of electric vehicles (EVs) priced above $78,000 purchased in the last two years will not be subjected to the EV road tax introduced in mid-2027.
Over the weekend, the NSW Labor government announced the removal of a $3,000 rebate for EVs priced under $68,750 and the cancellation of stamp duty exemptions for EVs under $78,000, effective at the end of 2023. Nonetheless, any eligible EVs ordered before December 31, 2023, will still benefit from these rebates, even if delivered post this date.
Interestingly, the EV road tax, set to begin in 2027, will not apply to EVs priced over $78,000 ordered or bought by the end of 2023.
The government stated that from July 1, 2027, a Road User Charge will be applied to all zero and low emissions vehicles, including hybrids, registered or transferred from January 1, 2024. However, there’s a catch: “EVs bought before January 1, 2024, that did not benefit from a stamp duty exemption, won’t be liable for the Road User Charge,” clarified a spokesperson for Energy Minister Penny Sharpe. In contrast, those with stamp duty exemptions will pay the charge.
This policy implies high-end EVs like electric Mercedes and Porsche Taycan, costing over $300,000, will evade the road tax, as will EVs with larger batteries and weights. Plus, early adopters who acquired EVs before the introduction of stamp duty exemption in September 2021 are also exempted.
After January 1, 2024, EVs will incur both stamp duty and the road user charge. Abolishing stamp duty exemptions could result in savings of approximately $498 million over four years. Initially, the proposed road tax was 2.5c per km for full EVs, and it’s predicted to be nearly 4c/km by 2027/28.
From September 2021 to August 2023, only 8,391 EV rebates, amounting to $25.2 million, were distributed. The initial aim of these rebates, introduced by the previous government, was to support 25,000 EV purchases.
The Labor government argues the rebate removal might raise EV prices. Yet, popular EVs, like the Model 3 and Model Y, have experienced significant price reductions recently.
The rebate’s termination could motivate many to buy EVs, especially those priced under $40,000, such as the MG4, BYD Dolphin, and GWM Ora models, where rebates and exemptions comprise about 10% of the cost.
These rebates will be substituted with a $260 million allocation by the NSW government for new EV infrastructure. The specifics of this fund will be detailed in a revised EV Strategy in 2024.
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