Broad welcome for NSW’s $490m EV strategy

NEW South Wales has become the latest state to detail its electric vehicle strategy with treasurer Dominic Perrottet committing $490 million to the 2021-22 state budget at the weekend to “cut taxes, incentivise uptake and reduce barriers for electric vehicle purchases” over the next four years.

The strategy has been well received by Australia’s automotive industry, with various bodies and manufacturers voicing their support and the consensus being that NSW has become the national leader for sustainable vehicles. 

Most of the $490 million will be put towards the waiving of stamp duties for new electric vehicles – battery-electric and fuel-cell electric – priced under $78,000 and purchased after September 1, with a $3000 rebate to be offered on the first 25,000 private purchases of eligible EVs under $68,750.

To help support the expected influx of EV sales, a $171 million slice of the funding is being dedicated the expansion of NSW’s charging infrastructure, of which $131m will be spent on new ultra-fast vehicle chargers.

The remaining $40 million will be split equally between grants for destination chargers to assist regional tourism and the installation of charging infrastructure at public transport hubs on land owned by Transport for NSW. 

A $33 million fund has also been set aside to help transition the state government’s passenger fleet to EVs “where feasible” with the goal of a fully electric fleet by 2030.

To offset the lack of stamp duty revenue, NSW will implement a road user charge of 2.5 cents per kilometre for eligible EVs as of July 1, 2027, or when EVs make up 30 per cent of all new vehicle sales – whichever comes first – at which point all plug-in hybrids and EVs will have stamp duty waived.

Plug-in hybrid vehicles will be included in road user charging too, although drivers will only be charged 2.0 cents per kilometre.

“Currently, the average petrol and diesel vehicle owner pays approximately $613 a year in fuel excise,” a state government spokesperson said in a statement.

“Under NSW’s new road user system, EV drivers will pay on average $315 annually.”

The state government hopes the strategy will increase EV sales to 52 per cent (of all new vehicle sales) by 2030–31 and help NSW achieve net-zero emissions by 2050.

Federal Chamber of Automotive Industries (FCAI) chief executive Tony Weber vocal in his support for the strategy, describing it as having the “capacity to kickstart serious EV penetration into Australia” and “consistent with actions being taken by forward-thinking governments across the world”.

“As the future of mobility continues to rapidly transform, now is the time for

governments to relieve motorists of a myriad of outdated, confusing and inefficient

charges and replace them with a simplified road user charging approach,” he said.

“This change in the taxation for EVs and PHEVs, significant investment in charging

infrastructure, initiatives supporting fleets and consumer incentives balanced with a

user charge represent the most significant steps we have seen in decades.”

However, Mr Weber warned that state-by-state EV strategies must ultimately align or “the result will be another disjointed and chaotic system like the introduction of different rail gauges across the country”.

“The FCAI has consistently advocated for a national approach to these issues that

ideally would be federally led to avoid the prospect of individual State Governments

introducing their own standards and incentive programs in support of zero- and low-emissions vehicles.”

Mr Weber was joined by Volkswagen Group Australia (VGA) in calling for consistency across states and territories, with the brand having made no secret of its disdain for the apparent lack of enthusiasm for EVs among several levels of Australian government in the past.

According to VGA managing director Michael Bartsch, the strategy’s key actions are “logical and progressive initiatives” that could “drive Australia out of the third world”.

“The Berejiklian Government has shown its federal colleagues and its counterpart in Victoria

the way to bring about mass ownership of affordable electric vehicles,” he said. 

“In terms of his targets for private ownership and fleet take up of EVs, there is no faulting Mr Kean’s ambition.”

Mr Bartsch added that Australia’s lack of CO2 emissions targets had “most impeded the case for EV prioritisation”.

“While the federal government has resolved to address Australia’s third-world fuel quality,

until it and the other state governments emulate the vision of NSW, our country will remain

a dumping ground for technology that cannot be sold in advanced countries.”

The Electric Vehicle Council of Australia was just as blunt in its praising of NSW, declaring the state now sat amongst “the advanced global pack” on electric vehicle policy.

“World leaders from California to the United Kingdom have policies to turbo-charge the transition to electric vehicles and capture the abundant economic, health, and environmental benefits,” said EV Council CEO Behyad Jafari. 

“Today New South Wales has stepped up to stand amongst them.”

Mr Jafari decribed the package as “how grown-ups do reform – consultative, balanced, and longsighted”.

“Many Australian governments have announced EV ‘plans,’ sometimes even ‘plans to have a plan’, but New South Wales is the first state to step up and deliver real action,” he said.

“This reform package will ensure New South Wales cleans its streets of exhaust and noise, lowers health costs, reduces carbon emissions, and breaks its dependence on foreign oil. Simultaneously it ensures tax revenue will flow fairly from road users as the transition unfolds.

“Vitally, they will see the world's leading manufacturers offering their most affordable EV models to the state. Currently there is a strong incentive to reserve these less expensive models for overseas markets. That changes with this announcement.”

For the moment, Australia’s cheapest EV is the $43,990 (driveaway) MG ZS EV which, due to the new $3000 rebate scheme and waived stamp duty, could be had from as little as $39,670 for eligible NSW residents as of September.

MG Motor Australia and New Zealand CEO Peter Ciao said the initiative was “welcome” and “vital” to the continued support of the EV rollout.

“At MG, we believe in Electric for Everyone, and this government subsidy program will give many more people the chance to experience the benefits of electric motoring for themselves,” he said.

While NSW is offering waived stamp duty and 25,000 of the $3000 rebates, the Victorian ZEV Subsidy (zero emissions vehicle) is currently offering 4000 rebates of $3000 (but no waived stamp duty) on new EVs purchased for less than $68,740.

Once the initial round of 4000 has expired, another two rounds of about 8000 rebates will be offered, although the value of these second and third round subsidies are yet to be determined “following consultation with the ZEV industry”.

NSW’s road-user charge mimics that of the Victorian system that comes into effect on July 1 before being re-evaluated and possibly altered from June 30, 2022.

A similar system has just been announced in South Australia and is slated to commence as of July 1, 2022, however a per-kilometre figure is yet to be confirmed.

The other region with an active vehicle emissions strategy is the ACT; its scheme waives the stamp duty on the purchase of a new vehicle that emits less than 130g of CO2 per kilometre and offers a 50 per cent discount on those that emit between 131-175g/km.

New or used EVs purchased or acquired in the ACT between May 24, 2021, and June 30, 2024 receive two years of free registration.

Hyundai Motor Company Australia (HMCA) was another of the brands to publicly praise the work of the NSW government, with HMCA CEOJohn Kett using the announcement to confirm an expansion of the Kona Electric range.

“We congratulate the State Government and recognise New South Wales as now setting the pace for the rest of Australia,” he said.

“Significant investment in the charging network, in both urban and regional areas, is a welcome initiative. Highly developed infrastructure provides confidence to customers and removes uncertainty around being able to charge EVs away from home.

“Hyundai already has the two most efficient cars on sale in Australia today according to the Federal Government’s Green Vehicle Guide, in the form of Ioniq EV hatch and the Kona Electric small SUV. 

“We intend to expand that leadership with the release of the Standard Range version of Kona Electric in the coming weeks.”

Nissan Australia managing director Stephen Lester shared Mr Kett’s views, both brands commending the state government’s ambition to electrify its fleet and each looking forward to helping finalise the finer details of the strategy. 

“These decisive actions are good for consumers, good for the market and ultimately good for the State’s own legislated net-zero targets,” Mr Lester said.

“These types of policies not only accelerate the EV transition right now, but also put Australia in a stronger place for priority adoption of new vehicle technologies, sooner.

“Additionally, with the announced transition targets for its own fleet, the NSW market will see greater EV uptake because of Government purchases, but also will ultimately benefit customers by providing a vibrant second-hand EV market in the years to come.

“The announcement of upcoming EV-related taxation reform provides consumers the right balance between EV adoption today, and surety about the future regulatory environment.”

Despite having only just launched its first hybrid and electric vehicles, Kia Australia also voiced its support, telling GoAuto“the latest move by the NSW Government is a step in the right direction” with an “excellent EV infrastructure plan”. 

“However, as previously stated, these sorts of material decisions would be ideally directed and mandated at a national level,” a spokesperson said.

The strategy also garnered support from NSW Labor, however in a statement to AAP, opposition leader Chris Minns said more ambition was needed to truly make the state an EV leader.

“We need a plan to make NSW an EV technology leader, not just an importer of parts and an exporter of raw materials,” he said.

“Labor welcomes the government’s measures … now we need to think big and carve out a role for NSW manufacturing in the EV supply chain.”