Tax tweaks needed to fast-charge EV take up

Buying and running electric vehicles for business fleets is too costly under Aussie tax rules, say researchers from Griffith University and Monash University.

Their report, published today by the RACE for 2030 Cooperative Research Centre, proposes practical tax changes to support home charging and allow fleet managers to quickly adopt battery electric vehicles (BEVs).

“Some of our recommendations could be implemented right now,” says Griffith University tax law expert and lead researcher Dr Anna Mortimore. “Because of the turnover of business fleets, these vehicles would start flowing into used car markets within three to four years, so more Australians could afford to go electric.”

“Fleet managers told us the total cost of owning an EV can be twice that of an equivalent petrol car,” says Dr Diane Kraal, a tax law expert with the Monash Energy Institute and co-author of the report.

“There is a lack of business site charging infrastructure for EVs. But statistics show that most employees park at home every night, so home charging is a solution to increasing fleet EVs. There are challenging barriers to home charging fleet EVs, such as tax imposts on driving a car home to charge, home charger costs, and the use of home energy to charge,” says Dr Kraal.

“Changes to Australia’s current Fringe Benefits Tax and income tax would provide solutions ̶ as seen in European countries with high numbers of EVs, such as Norway, Netherlands and Germany,” says Dr Kraal. “Battery electric cars will be the best option for fleet managers once effective tax changes are made in Australia,” says Dr Mortimore.

The report proposes short-term tax changes so that electric cars be:

• Fully exempt from Fringe Benefits Tax, if they are provided by an employer;
• Provided the concession of a higher cost limit for depreciation;
• Eligible for 100 percent instant-asset-write-off, which would exclude petrol cars, and;
• Powered by tax-deductible chargers at a fleet employee’s home.

The report also recommends long term changes including:

• The Fringe Benefit Tax for cars be based on CO2 emissions;
• The government subsidises fleet employers’ cost and installation of EV chargers in fleet employees’ home; or,
• The government rebates fleet employees for cost and installation of EV chargers at home.

“Our report outlines 17 short-term and long-term tax changes that will transform Australia’s car fleet,” says Dr Mortimore.

“These are policies used successfully by countries in Europe with high EV uptakes, and our research indicates they will work in Australia as well.”

RACE for 2030 wishes to acknowledge the contribution from our partners: Griffith University, Monash University, the Australasian Fleet Management Association, AGL, Energy Efficiency Council, NSW Government, Government of South Australia and Victorian State Government.