Terms of reference – Statutory review of the electric car discount

The Treasury Laws Amendment (Electric Car Discount) Act 2022 (the Act) was introduced to encourage greater take-up of electric cars by Australian road users to reduce Australia’s carbon emissions from the transport sector. The Act requires a review to be undertaken of the operation of the electric car discount. The electric car discount consists of a fringe benefits tax (FBT) exemption and an exemption from tariffs on eligible electric cars.

The review will establish a fact base on the electric car discount to improve understanding of its operation and the outcomes it is delivering for Australians, in the context of other related Government programs and initiatives, for example the National Electric Vehicle Strategy and the New Vehicle Efficiency Standard Act 2024.

The Government has asked the Australian Centre for Evaluation, at the Australian Treasury, and the Department of Climate Change, Energy, the Environment and Water to conduct the review, working closely with relevant Commonwealth agencies. The Australian Centre for Evaluation is well placed to conduct this review given their experience and capabilities conducting high-quality evaluations of Government policies and programs.

Consistent with the requirements in the Act, the review will consider:

• the first 3 years of the electric car discount’s operation, since its commencement on 1 January 2023, and in particular, the effectiveness of the electric car discount in encouraging the uptake of cars that are zero or low emissions vehicles
• whether the electric car discount should continue, and, if so
• what types of vehicles should attract the electric car discount.

Furthermore, the review will take into account:

• the role of the electric car discount in supporting early adoption of electric vehicles
• changes in the electric car market, including price, choice and availability of new and second-hand electric vehicles
• changes in electric vehicle charging infrastructure and support services
• the cost of the electric car discount in achieving its objectives
• consumer acceptance of electric vehicles.

The review will invite public submissions relevant to the review and have regard to those submissions in its evaluation.