The Albanese Government has confirmed it will wind back the Electric Car Discount, cutting the Fringe Benefits Tax (FBT) exemption to 25% from 2029. Sustained community advocacy stopped the discount being scrapped entirely, but the cut needs a serious replacement.
“Australians sent a clear message that this policy is helping them cut petrol bills, the government listened in the short term. Now the harder question is what replaces this from 2029, because without a replacement, working families will be locked into volatile petrol prices for years,” said Heidi Lee Douglas, CEO of Solar Citizens.
The Government was considering repealing the Electric Car Discount (ECD), before sustained public pressure highlighted the real-world impact on household budgets and energy security.
More than 700 Solar Citizens supporters wrote directly to Defence Minister Richard Marles calling for the Electric Car Discount to be retained as a matter of urgency as the nation reels from national fuel security issues. Solar Citizens supporters from around Australia also sent more than 1,000 letters to the Treasurer and the Expenditure Review Committee requesting the Electric Car Discount be retained in this Federal Budget.
“This is a clear example of people power working — everyday Australians spoke up to protect a policy that is helping them cut petrol costs and take control of their energy bills,” Douglas said.
However, Solar Citizens said the government announcement that they intend to reduce the ECD to 25% in 2029 must be changed to instead unlock the full value of EVs as part of the energy system.
“What happens next matters,” Douglas said. “If the Government is going to change EV incentives after 2029, those changes should be tied to enabling the take up of electric vehicles that operate as ‘batteries on wheels’ - supporting households and the electricity grid.”
Solar Citizens said the government should maintain the ECD full incentives beyond 2029 for vehicle-to-grid (V2G) enabled vehicles.
“From 2029, the Government should target support to EVs that can power homes and feed energy back into the grid.
“That’s how you get the most value from public investment — lower bills, create stronger energy security, and simultaneously secure a clean energy transition.”
Unlocking that potential through smart government policy will push action from car manufacturers.
“What we need to see next is action from car manufacturers to unlock the full potential of EVs. That means enabling vehicle-to-grid and vehicle-to-home technology without voiding warranties.
“EVs are batteries on wheels. Their batteries are often much larger than home batteries — so if your car can also power your home, you’re getting far better value for money.
“It turns your car into a household energy asset, cutting bills and boosting resilience.
“Right now, warranty barriers are holding that back. Fixing this is a win-win — for households, for the grid, and for accelerating the clean energy transition.”
“Electric cars are popular with rooftop solar owners. By tying an EV with rooftop solar, your car runs on sunshine, protecting you from exposure to volatile global fossil fuel prices, and helping to protect Australia’s petrol reserves for other non-EV drivers.
If you can use your car as a home battery, you are also buffered from electricity price rises as well”.