Another hit for EV drivers as popular $13,000 tax break is under fire
But two days later, the Liberal party leader said the multi-million dollar Labor scheme would be dropped if he won the May 3 election. The rebate allows drivers to deduct the cost of an electric vehicle from fringe benefits tax if it was bought through a novated lease and does not exceed the value of $91,387.
Sydney Tesla driver Tom Gao bought his 2025 Model Y Juniper thanks to the FBT exemption and told Yahoo Finance the policy was a big factor in his purchase.
"I would not be buying an EV if FBT exemption is removed," he said.
Electric Vehicle Council CEO Julie Delvecchio was "extremely disappointed and confused" Australians could lose important financial assistance that allowed them to reduce ongoing costs by purchasing an electric vehicle.
RELATED
Tesla's $1.54 billion 'horror show' as Elon Musk cops backlash from 'changing political sentiment'
Centrelink's blunt warning over $1,200 'one-off' cost-of-living payment: 'Be mindful'
ATO's $24,097 tax blow for every Aussie worker
'The FBT exemption is incredibly popular among Australians living in the outer suburbs and helping many Australians across the country afford and manage the upfront cost of an EV, which we know is cheaper to run once you're behind the wheel," Delvecchio said.
'If the Coalition wants to make cars cheaper, and driving cheaper during a cost-of-living crisis, it wouldn't be removing this discount for Australians.'
Gao said he feared there would be a "significant drop in EV purchases" if the scheme was scrapped.
"If you look at uptake of EVs in countries like Norway, it's completely driven by government incentives," the Sydney driver said.
"That's the case across the world."Australians can shave thousands of dollars off the cost of an electric vehicle using the rebate.
The program, which was introduced by the Albanese government in 2022, had been extended to cover plug-in hybrid electric vehicles, but that exemption ended up April 1.
Now, you can deduct the cost of an electric vehicle if:
the EV was worth less than $91,387
the car was bought with a novated lease
A novated lease allows an employee to buy a new or used car and have their employer cover the cost of lease repayments to an agreed financial supplier.
The employer makes the repayments to the leasing company out of the employee's pre-tax salary in a salary sacrifice arrangement, which reduces the employee's taxable income.
For example, if a worker secured a $68,000 EV through a novated lease through their company, they could save around $13,296 thanks to the exemption.
Treasury forecast the policy would cost taxpayers $55 million in the 2024-25 financial year.
But recent figures from the Institute of Public Accountants found it cost closer to $560 million per year.
Drivers of traditional petrol or diesel fuel, an internal combustion engine vehicle (ICE), have claimed electric vehicle drivers are given unfair cost advantages.
Gao said he found the policy generous and had predicted it to be short-lived.
"If you look at the numbers, it's so outrageous in terms of incentives towards EV owners," he said.
"To some degree, I think it's extremely unfair for ICE owners."
During the election campaign, the Coalition had advised the tax exemption was too costly to continue.
However, on Monday Dutton said: 'No... We don't have any proposals to change those settings."
Cut to Wednesday and the tune was a little different.
'The Coalition will … unwind Labor's taxpayer-funded and badly designed electric car subsidies, saving upwards of $3 billion over the forward estimates and $23 billion over the medium term,' his campaign said in a statement.
The Australian reported that Dutton may have misheard the original question on Monday.
But it didn't stop Labor from sinking its teeth into the backflip.
'The Coalition is a risky and reckless bin fire of inconsistency and incompetence on the economy,' Treasurer Jim Chalmers said.
'This is what happens when they spend three years doing everything they can to avoid coming clean on their cuts. Every day a new, more embarrassing combination of Coalition cuts and chaos.'
National Automotive Leasing and Salary Packaging Association (NALSPA) CEO Rohan Martin said the Coalition's backflip "would disproportionately affect average working Australians" at a time when the "cost-of-living crisis, including escalating transport costs, is hitting hard".
It has called on the Coalition to rethink its stance.
"Such a winding back doesn't align with the Coalition's own election pledges—like tax relief through an offset, scrapping the New Vehicle Efficiency Standard penalties to lower upfront car costs, and halving the fuel excise—because the EV FBT exemption successfully delivers on all those fronts."
The Coalition has promised slash the fuel excise from 50 cents to 25 cents per litre for 12 months, if elected, to bring down the cost of petrol.
The cost of fuel has decreased recently as US President Donald Trump's ongoing tariff war created instability in the global oil markets.
The New Vehicle Efficiency Standard was introduced earlier this year and it gives every car manufacturer a CO2 target that they either have to meet or beat each year, otherwise they could be penalised.
The opposition wants to get rid of those penalties so that car manufacturers aren't reprimanded if they don't roll out fuel-efficient vehicles.Sign in to access your portfolio
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Is Now a Good Time To Invest in Uber? Here's What Experts Say
Uber Technologies has been one of the best stocks on Wall Street so far in 2025, with shares rising by about 50% year-to-date to far outpace the broader markets. I'm a Financial Advisor: Read Next: The rideshare company's stock hit a record high of $97.71 in early July. Some analysts see the price reaching $120 by year's end — meaning it could be a good time to invest in Uber. Much of the optimism is based on Uber's strong financial results, which include double-digit revenue growth and a continued uptick in bookings. 'A Real Business' One expert with a positive take on Uber is Edward Corona, a Florida-based trader and publisher of The Options Oracle Newsletter. He's targeting a $107 stock price for the rest of the year as long as the company's current positive trends hold. 'Uber is finally acting like a real business — free cash flow is solid, margins are improving, and they've become the default app for way more than just rides,' Corona told GOBankingRates. Although Uber faces a competitive risk from Tesla's robotaxi, Corona calls that a '2026 problem.' For now, Uber's stock chart has 'been in a steady uptrend, and I like it long here,' he added. How To Turn $100K Into a Million: Is Now A Good Time To Buy? Most experts are upbeat about Uber and recommend buying the stock. The vast majority of analysts polled by MarketWatch — 41 out of 57 — have a 'Buy' rating on the stock. The others rate it either 'Overweight' (4 analysts) or 'Hold' (12). As of July 23, the consensus rating is 'Buy' and the average target price is $101.10. A recent analysis from Motley Fool recommended buying Uber shares 'like there's no tomorrow' and cited the following company strengths: Strong revenue growth driven by double-digit increases in gross bookings for mobility and delivery. Competitive advantages from Uber's 'network effect' and ability to leverage 'vast amounts of data.' Although Uber already operates in more than 15,000 cities worldwide, it's still 'not even close' to reaching its full potential. The stock price is still relatively affordable at less than $100 a share. Among the analysts with a particularly bullish take on Uber is Ken Gawrelski of Wells Fargo. As AInvest noted, Gawrelsk recently maintained his 'Overweight' rating on the stock, and raised his price target to $120 from $100. More From GOBankingRates Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck This article originally appeared on Is Now a Good Time To Invest in Uber? Here's What Experts Say Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data


Forbes
an hour ago
- Forbes
The All-New Tesla Model Coming Soon Is Not What You Think
A new Model Y driving in LA (Photo by MEGA/GC Images) So, is there a new, more affordable Tesla in the pipeline? Apparently yes, and it's not what you think. Last week, on a second-quarter Tesla earnings call, the man himself, Elon Musk let the cat out of the bag when he said, 'It's just a Model Y.' Really? What does that mean? Could it mean that it's just a stripped down Model Y? And what about the future of the federal tax credit? Let's face it: Tesla is the only American automaker capable of producing a high-end, realistic, appealing electric vehicle for less than $30,000. And if they have to bring the car back to bare bones to make it sell, then that's what they'll do, apparently. People just don't have enough money to buy Teslas now Musk expanded by saying that, 'The desire to buy our cars is very high. It's just that people don't have enough money in the bank to buy them. That's the issue. So the more affordable we can make the car th Tesla CEO Elon Musk says new car is Model Y. (Photo by Odd ANDERSEN / AFP) (Photo by ODD ... More ANDERSEN/AFP via Getty Images) Then he revealed how potential buyers can possibly offset the purchase price of their car by 'releasing their car to the fleet and have it earn money for them,' suggesting that people may 'lend' their cars back to Tesla in a type of robotaxi relationship perhaps. Musk then went out on a limb by saying he's confident that 'I think this will happen next year in the U.S. at least.' His comments though raise more questions than provide answers. By saying 'it's just a Model Y,' does he mean a 'new' Y with upgraded parts but based on the old platform, which would help to keep costs down? What we do know is that the more affordable Model Y, as referred to by Musk, should be surfacing in Q4 this year. But that will be long after the $7,500 federal tax credit ends—which will make it even tougher for Tesla to get the price down to the sub-$30,000 level that Musk seems to be alluring to. Let's have a quick look at Tesla's current pricing. Today, the Model Y rear-wheel drive variant costs $44,990, which when you factor in the $7,500, drops the price to $37,490. But with that tax credit gone, and we expect it to disappear very soon under the Trump Administration, the price for a current model Y will hover around $44,000. So for Musk to achieve his goal of achieving a sub-$30,000, he will need to find $15,000 worth of savings in specs and features. The question is—which features to strip back? If it's going to be used as some kind of robotaxi, then it will need all of its AutoPilot features. And given that the Y has been rated as one of the safest on the road by Euro NCAP, ANCAP and IIHS, Tesla would not want to skimp on safety features in any way—which would make it difficult to reduce pricing. But Musk has pushed the boundaries of car tech in the past and redefined the genre, so we will give him some latitude and wait for further updates even if his car sales are hurting all over the planet.
Yahoo
2 hours ago
- Yahoo
Trump Just Hammered US Cars With Tariffs
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Toyota Motor Corp (NYSE:TM) just got a market-moving gift – and it came courtesy of U.S. trade policy. After the Donald Trump administration unveiled a new 15% tariff on imported vehicles, Toyota's stock surged 8%. Tariff Math That Favors The Competition Why? Because while Toyota gets away with a flat 15% hike, American automakers like Ford Motor Co (NYSE:F), General Motors Co (NYSE:GM), and Tesla Inc (NASDAQ:TSLA) are staring down a tangled—and far more expensive—tariff mess. Ford and GM aren't just dealing with the vehicle import tariff, pointed out Spencer Hakimian on X. They're also absorbing 50% more for steel and copper, 25% tariffs on parts from Canadian and Mexican factories, and a 55% hit on components sourced from China. Tesla, with its global supply web, doesn't escape the squeeze either. Trending: Be part of the breakthrough that could replace plastic as we know it— An 'America First' Policy That Backfired? What was meant to be a policy to bring auto jobs back to U.S. soil may end up doing the opposite – by raising input costs for American carmakers while giving Toyota a relatively cleaner ride. Ironically, Toyota's more consolidated and diversified supply chain, with more U.S.-based manufacturing than some of its American rivals, positions it to weather the new rules better. Switch Auto Insurance and Save Today! Affordable Auto Insurance, Customized for You The Insurance Savings You Expect Great Rates and Award-Winning Service The optics are stark: a Japanese automaker rallying on a trade policy designed to promote American industry, while Detroit's giants get slapped with compounding Street Is Already Picking Sides The market's response was swift. Toyota popped. Ford and GM barely budged. Tesla continues to navigate a different narrative altogether, but even it can't dodge the rising cost of essential materials. For investors, the takeaway is clear: in the short term, tariff policy isn't just a political tool – it's a stock catalyst. And right now, Toyota's the one shifting into high gear. Read Next: $100k+ in investable assets? Match with a fiduciary advisor for free to learn how you can maximize your retirement and save on taxes – no cost, no obligation. If there was a new fund backed by Jeff Bezos offering a 7-9% target yield with monthly dividends would you invest in it? Photo: Shutterstock This article Trump Just Hammered US Cars With Tariffs - Toyota Says Thanks originally appeared on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data