New South Wales (NSW), the second largest state in Australia, has followed Victoria’s lead and announced plans to remove incentives for the purchase of new electric vehicles (EVs) starting from January 2024. The NSW government’s decision, confirmed today, comes as part of the run-up to the 2024 state budget and aims to allocate the funds originally used for the incentives towards the installation of more charging stations across the state.
The previous incentive program, known as the NSW Electric Vehicle Incentive Scheme, was launched on September 1, 2021, and provided a $3,000 subsidy, as well as free stamp duty, for the first 25,000 electric cars sold with a taxable value of less than $68,750. As of August 31, 2023, approximately one-third of the proposed incentives had been claimed, accounting for $25.1 million of the $75 million allocated to the program.
NSW Premier Chris Minns recently expressed concerns that the government’s subsidy was only increasing the costs of electric vehicles. Car companies were reportedly raising prices to maximize profits on in-demand EVs. This decision by the NSW government echoes Victoria’s move to scrap its own electric car incentive scheme on June 30, 2023, which had reportedly benefited over 10,000 new EV buyers. In the upcoming state budget, the NSW government plans to remove both the incentive scheme and free stamp duty, resulting in an estimated saving of $527 million.
Instead of providing direct incentives for the purchase of EVs, the NSW government intends to allocate up to $260 million towards the development of electric vehicle charging infrastructure. The funding will be focused on regional areas of the state as well as areas where drivers do not have easy access to off-street parking. With approximately 125,000 electric and plug-in hybrid cars currently on Australian roads, NSW Minister for Energy and Climate Change Penny Sharpe believes it is crucial to invest in infrastructure that enables faster and more frequent charging options for all electric vehicle drivers.
“To facilitate the adoption of electric vehicles, the New South Wales government will increase funding for essential infrastructure,” said Sharpe in a news release. The plan is to ensure that EV drivers have access to convenient charging infrastructure throughout the state, which in turn will encourage more people to transition to electric vehicles.
Currently, there are around 20 different electric car models available in NSW that are priced below the previous rebate limit of $68,750. Of those models, three are priced below $40,000 before on-road costs. Buyers who have already ordered a car and expect to benefit from the rebate scheme will not be affected by the removal of the incentives.
The shift in the NSW government’s approach to electric vehicle incentives and subsequent focus on charging infrastructure is a response to the growing demand for EVs in Australia. With more drivers choosing electric vehicles as a cleaner and more sustainable mode of transport, the need for accessible and reliable charging infrastructure is paramount. This move aligns NSW with other countries and states that place a strong emphasis on supporting the development of charging infrastructure to encourage the widespread adoption of electric vehicles.
James Ward, an expert in the automotive industry and part of the digital publishing landscape in Australia since 2002, believes that this shift in focus is a positive step towards the broader adoption of electric vehicles in NSW. Ward notes the importance of investing public funds in essential infrastructure to facilitate the transition to cleaner transportation options.
As the demand for electric vehicles continues to rise globally, governments and local authorities are realizing the need to support the development of charging infrastructure. By removing incentives for the purchase of new electric vehicles and investing instead in charging infrastructure, the NSW government is taking a proactive approach to meet the needs of its citizens and contribute to a greener and more sustainable future.