When Julie Hoang needed to upgrade the family’s ageing diesel car, she didn’t at first consider buying an electric vehicle (EV).

Then she saw the subsidies, and pretty soon she was swanning around in a sleek white electric Peugeot.

“I definitely wouldn’t have bought one without the subsidies,” she says.

The four-door hatchback would have cost an eye-watering $50,000, but the government gave her an $11,000 rebate.

On top of this, it bought back her diesel clunker for about $5,000.

“That’s a higher value than what it’s worth,” Julie said.

All up, the subsidy and buy-back reduced the cost of the car to $34,000; more expensive than a diesel model, but not by too much.

The catch? (And sorry to get your hopes up).

Julie lives in France.

A roadside vertical box EV charger scrawled with graffiti tags
Public EV chargers are fast becoming a familiar sight in European cities.(Getty: Carsten Koall)

Governments around the world are offering juicy purchase incentives to speed car ownership to EVs — and it appears to be working.

EVs made up 22 per cent of new car sales in France in September 2021.

In Australia, which has some small state EV subsidies but no overarching national ones, EVs account for about 1.6 per cent of new car sales.

ndustry groups have been calling for sizeable national incentives for years and hoped they’d arrive with a long-anticipated federal government EV strategy, which was released last week.

But they didn’t arrive: The Prime Minister ruled them out, saying Australians would have to wait for the carmakers to offer cheaper cars.

“I trust Australians that when they are presented with good options at good prices — they’ll make good choices,” he said.

So what subsidies and tax concessions (known collectively as purchase incentives) are other governments dangling before the car-buying public?

Here’s what’s on offer in Australia, compared to a selection of other countries around the world.

Australia

  • Australian Capital Territory: New EVs are exempt from stamp duty (about $1,350 for a $45,000 car)
  • New South Wales: The first 25,000 EVs sold (worth less than $68,750) attract a $3,000 rebate. New and used EVs (worth less than $78,000) are also exempt from stamp duty (roughly the same as in ACT)
  • Victoria: New electric and hydrogen vehicles (worth less than $68,740) attract a subsidy of $3,000 and pay a lower rate of stamp duty
  • Queensland: Electric and hybrid vehicles pay a reduced stamp duty
  • Tasmania: New and used EVs are exempt from stamp duty
  • South Australia: The first 7,000 EVs purchased in the state attract a $3,000 subsidy, and new EVs are exempt from registration fees up to 2025
  • Northern Territory: Slightly lower registration fees for EVs
  • Western Australia: WA has no EV purchase incentives

But these purchase incentives are, or will be, cancelled out by “EV taxes” in some states:

  • Victoria: EV drivers pay a road user charge of 2-2.5 cents per kilometre (for an average distance covered per year, that’s about $300, so over 10 years it cancels out the subsidy)
  • South Australia and New South Wales: From 2027, EVs will pay a road user charge

New Zealand

New Zealand offers rebates of $NZ8,625 for new EVs and $NZ3,450 for used ones, and has flagged a “cash for clunkers” buyback scheme.

United States

EV buyers get a federal tax credit of up to $US7,500 and President Joe Biden is pushing to increase that figure to $US12,500 for US-made models.

There are also extra state-based EV subsidies. In California, residents can access a rebate of up to $US7,000 on new EVs.

Green-glowing obelisks with charger cables by a roadside at night
An electric vehicle charging station in California.(Getty: Frederic J. Brown)

China

The world’s largest EV market has electric car subsidies of 18,000 Yuan ($3,822).

United Kingdom

The UK offers grants of up to 3,000 British pounds ($5,500), as well as other incentives, such as exemption from the vehicle excise duty and London’s congestion charge.

Ireland

Ireland offers subsidies and tax relief of up to 10,000 euros ($15,700) for purchasing a new EV.

Germany

Germany has EV subsidies of up to 9,000 Euros ($14,200).

German carmakers are also offering generous diesel vehicle buyback schemes, ranging from 6,000 ($9,400) to 10,000 euros ($15,700).

A man drills together a partially assembled car in a busy factory
Volkswagen employees assemble the body and powertrain of a VW EV in a Dresden factory.(Getty: Sebastian Kahnert)

Norway

Norway offers generous exemptions from various carbon, road and sales taxes that make EVs cheaper to buy than petrol or diesel cars.

In September 2021, EVs made up 77.5 per cent of all new cars sold in the country.

Are Australia’s incentives enough?

The Grattan Institute says that to get Australia’s transport sector emissions to net zero by 2050, 50 per cent of new car sales will need to be zero-emissions vehicles by 2030 and 100 per cent by 2035.

(Zero-emission vehicles can also be hydrogen cars, but most of the time we’re talking about EVs, which are much more popular.)

How feasible is this with existing incentives?

According to government modelling, we will fall short of these targets.

The federal government’s EV strategy released last week estimates that, under current policy settings (and without national rebates), EVs will make up only 30 per cent of new light vehicle sales by 2030.

The EV strategy states: “Reducing the total cost of ownership through subsidies would not represent value for the taxpayer, particularly as industry is rapidly working through technological developments to make battery electric vehicles cheaper.”

France, meanwhile, has seen so many EV sales that it’s even slightly reduced its subsidies since Julie bought her Peugeot.

Speaking from a small village in the south of France, Julie said she was also benefiting from a low-interest loan for EV purchases, as well as avoiding paying sales tax to insure the car.

“It reduces the insurance quite a bit,” she said.

These incentives haven’t removed all the barriers to buying an EV— there’s still the problem of limited public chargers and a new anxiety about running out of juice if she ventures to Lyon or Marseille.

“It’s the blocking issue at the moment,” she said.

Extracted in full from: How much are electric vehicle subsidies in Australia and around the world? – ABC News

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