Continue electric vehicle discount to boost EV uptake

In December 2025, the Australian Government announced a review of the electric car discount, as required by the Treasury Laws Amendment (Electric Car Discount) Act 2022.

Climateworks welcomes the climate action and commitments taken by the Australian Government to
date to decarbonise the transport sector.

The release of the Transport and Infrastructure Net Zero Roadmap and Action Plan, the introduction of the New Vehicle Efficiency Standard (NVES), the expansion of electric charging for apartments and the discount for electric vehicles (electric car discount) are all beneficial policies that help to drive down emissions.

In our submission, we present evidence from Climateworks modelling showing the rate of electric vehicle (EV) uptake that can achieve Australia’s climate goals and outline the critical and ongoing role for the electric car discount in achieving this goal.

Recommendations

• Ensure complementary policies are in place to boost the rate of EV uptake in Australia to decarbonise transport and enable cost-effective action to reach Australia’s climate targets.
• Continue the electric vehicle discount in the short term, to provide certainty and ensure EV uptake continues to increase, in order to achieve Australia’s climate targets.
• Consider ways to improve the cost-effectiveness of the current discount to maximise emission impact, including reducing the amount of the incentive while increasing accessibility of incentives to more drivers, including light commercial freight vehicles.
• Complement the electric car discount with a strengthened NVES through the 2026 review process.

More details on these recommendations can be found in our submission [PDF 0.2mb].