Victorians to get $3,000 off the price of EVs, new target for half of new vehicle sales to be EV by 2030

Victorians to get $3,000 off the price of EVs, new target for half of new vehicle sales to be EV by 2030

Today, the Victorian Government has finally announced a suite of EV-friendly policies to help accelerate the adoption of electric vehicles in the state. This forms part of the strategy to achieve net zero emissions by 2050.

Included in the new policy by Labor’s Minister for Energy, Environment and Climate Change and Minister for Solar Homes, Lily D’Ambrosio, are 4 key pillars which are hopefully just the start, as Infrastructure Victoria made 21 recommendations in April.

  • $3,000 subsidies to get 20,000 more Zero Emissions Vehicles (ZEVs) on our roads.
  • Target that half of all new cars sold in Victoria by 2030 will be ZEVs.
  • More ZEV charging sites.
  • 400 more ZEVs in Gov fleet.

Funding a new policy like this comes at a cost to the Government and ultimately the tax payer and in this instance we see a very conservative allocation of just $100-million. What is good to see is that plan will come into effect immediately with the first 4,000 subsidies to be released from tomorrow.

Our transport sector is a significant contributor to our emissions. This package of reforms makes cars the vehicle for change, by getting more zero emissions vehicles on our roads.

Minister for Energy, Environment and Climate Change Lily D’Ambrosio

Let’s break down each one of the 4 initiatives.

$3,000 subsidies to get 20,000 more Zero Emissions Vehicles (ZEVs) on our roads.

There are currently around 20,000 electric vehicles registered in Australia. Around 7,000 of those, or 35% are in Victoria, not bad considering only 26% of Australia’s population live in this state. To add an incentive that looks to effectively double existing 20,000 EVs in Australia, is a really positive sign, but won’t be anywhere near enough to significantly move the needle, given 100,005 new vehicles were sold in March 2021 in Australia.

As for the value of the incentive, $3,000 is important, particularly if you’re talking about removing it from the price of Australia’s cheapest EV, the MG ZS EV which starts at A$43,990. After this new incentive was applied, the driveaway price would be $40,990 and if MG were smart, they’d find a way to knock off $991 and have the car start at A$39,999.

Internationally EV incentives across the globe are far more generous, as other countries try to reduce their Carbon dioxide (CO2) emissions. Americans benefit from a tax credit of up to $7,500, until the manufacturer reaches 200,000 vehicles sold. Some state-based incentives can add to this tax credit and this is likely this scheme is likely to be expanded under President Biden.

France has one of the most generous EV schemes that offered as much as 8,500 Euro (A$13k) as a purchase incentive. As EV adoption there grows, the government is decreasing this to around 5,000 euros in 2022,

There are plenty of other examples from across the globe that are higher than the A$3,000 on offer in Australia, but it is better than nothing.

This subsidy is only available for vehicles under A$69,000. A $3,000 discount on a A$69,000 vehicle equates to a 4.34% saving.

This means the following vehicles would qualify:

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