Polestar opposes looming changes to Australian EV incentives

Polestar Australia has called on the Australian Government to leave its long-standing electric vehicle (EV) incentives alone, following an announcement in December last year that its EV subsidy scheme would be reviewed.

Since July 1, 2022, EVs priced below the Luxury Car Tax (LCT) threshold for fuel-efficient vehicles ($91,387 for 2025-26) have been exempt from Fringe Benefits Tax (FBT), potentially saving novated lessees thousands each year.

The Australian Treasury estimates that roughly 100,000 EV buyers have benefited to date. Following the review, which was promised when the discount was legislated, the government could end, renew or modify the scheme.

According to Polestar Australia managing director Scott Maynard, "this is not the time to change the settings that they've got on the FBT relief for electric vehicles".

"The government's published goal is to see 50 per cent of the market buying electric vehicles by 2035. They're nowhere near that, and they're not tracking towards that," he said.

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"I fail to see how the program could be overspent when the results are underdone; the two simply don't line up. So yes, it would suggest that the problem here is that it was under-budgeted from the start."

The share of EVs in Australia's new-vehicle market has certainly increased since the scheme was introduced almost four years ago. EVs accounted for just 3.8 per cent of market in 2022, and last year sat at 8.3 per cent of the total market excluding heavy commercial vehcles.

"It's great to see that electric vehicle share of the light vehicle market has now risen above 10 per cent for the year and continues to increase," Mr Maynard added.

"That's great, but at the first sign of success, I don't think that that would be the time to dismantle or even change the program."

Instead, Mr Maynard has called on the government to address sales incentives for combustion vehicles such as diesel-powered dual-cab utes, which can qualify for FBT exemptions if the vehicles provided to staff by employers are used only for "limited private use".

As such, drivers are required to keep accurate records to prove their work ute isn't used "as the family taxi" or "for weekend personal trips" – according to the Australian Taxation Office – in order to be eligible for FBT exemption.

"If the government is seeking to rationalise its expense through FBT subsidies, I feel strongly that it should be looking at the money it's investing in the sale of dual-cab utes before it looks at electric vehicles," Mr Maynard said.

"We all accept that electric vehicles present Australian drivers now with sufficient choice, a lower running cost, and vehicles that are fun to drive and easy to own, and we all accept that there's tangible and measurable health benefits to the cleaner air that they will provide us, yet we don't think twice about the billions of dollars the government is sinking into the sale of dual-cab utes to the point where now we're selling one and a half times the [number of] utes than we have tradespeople.

"We're selling these things with an FBT subsidy of prices in excess of $200,000. That would seem to me to be a much easier win than going after a corner of the market that's doing good things and not enough of them."

Of course, as an EV-only brand, Polestar benefits from FBT exemptions since both the Polestar 2 liftback and the Polestar 4 mid-size SUV (but not the Polestar 3 large SUV) are both priced below the LCT threshold.

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