The Federal Government has announced that some customers buying some new, fully electric vehicles (EVs) with a loan will be eligible for a discount on their interest rate.
Energy Minister Chris Bowen said the scheme, which will apply to certain Hyundais and Kias, will help make EV ownership “more accessible.”
Shadow Energy Minister Dan Tehan questioned the investment of “taxpayer cash” for EV targets.
Background
EV uptake in Australia has grown significantly since the 2010s.
In 2016, Australians bought 1,369 EVs. Last year, this number was 157,000, accounting for around 13% of all new car sales, according to the Electric Vehicle Council (EVC).
There are more than 454,000 EVs in Australia.
Last year, the EVC said that if the Government wants to reduce emissions by 62-70% on 2005 levels by 2035, there will need to be 20 times more EVs in circulation.
In July 2022, the Government introduced a fringe benefits tax (FBT) exemption for EVs.
FBT is a tax paid by employers on some benefits, such as cars or gym memberships, given to their employees or their associates.
To be eligible, a vehicle must be zero or low emissions, never had luxury car tax (LCT) paid, is used by an employee or their associates, and has been in their possession on or after 1 July 2022.
Since January 2025, a New Vehicle Efficiency Standard (NVES) has also been in place to gradually lower CO₂emissions targets for SUVs and utes.
Scheme
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This week, Bowen announced that a Goverment body, the Clean Energy Finance Corporation (CEFC), will spend $60 million ona partnership with Hyundai Capital Australia.
Under the partnership, customers buying new, fully electric vehicles costing less than the LCT thresholdof $91,387 can access a discount of 0.5-1% on their finance (or interest) rate.
For example, the Government saysa 1% discount over five years on a $70,000 loan could save around $1,900 in interest.
Most of the EV models sold by Kia and Hyundai are priced under the LCT, with the average Kia EV at $81,661* and Hyundai at $76,229*.
Bowen said the scheme “will help lower the cost barrier for households and small businesses”.
“Transport is one of our biggest sources of emissions, and electric vehicles are a key way we cut pollution while saving people money,” he added.
*Average of all driveaway model prices in NSW
Criticism
Shadow Energy Minister Dan Tehan said the scheme “mean[s] more taxpayer dollars will be pumped into encouraging people to buy EVs.”
Tehan also questioned why only Kia and Hyundai vehicles were eligible.
Motor Trades Association of Australia Interim Executive Director Peter Jones said “lower-interest finance can help... some buyers” but that it is “not a silver bullet for electric vehicle uptake.”
Jones also said that EV industry skills and education incentives shouldbe supported to match supply.
