The Electric Vehicle Council has condemned the NSW government’s decision to end incentives for new EV purchases, saying the policy will impede low-income households from buying “superior cars”.

The Electric Vehicle Council (EVC) has criticised the New South Wales government’s forthcoming decision to abandon rebates on EV purchases, arguing the move will worsen income inequality across Sydney.

Ahead of the NSW state budget announcement on Tuesday, reports revealed Treasurer Daniel Mookhey is set to terminate the current $3,000 incentive for drivers who buy new electric vehicles and funnel the savings into building more base infrastructure.

From January 1 next year, stamp duty will also be reintroduced for new EV purchases along with rebate removals, with the government forecasting $527 million in savings from the move, a large portion of which will then be invested into constructing charging stations in regional areas and for those without access to home charging like apartment dwellers and renters.

Mr Mookhey says the changes will help better distribute government spending benefits across a broader demographic base, but the EVC reasons it will only do the opposite.

“The NSW incentives, combined with more affordable EV imports, were just starting to drive significant uptake in Sydney’s west and the state’s regions,” EVC chief executive Behyad Jafari said in a statement.

NSW is set to terminate its Electric Vehicle incentives from January 1 in favour of funding for more EV infrastructure. Picture: Sean Gallup/Getty Images

“Wealthy people on the north shore will be fine under this change – they’ll continue to buy EVs, because they know they’re a superior option. But less well-off families in the west will be forced to stick to costly gas guzzlers and a time when petrol prices are going through the roof.

“Fewer EVs means dirtier Sydney air, continued reliance on foreign oil imports, higher carbon emissions, and more budget pressure on everyday households. It’s foolish, short-sighted policy from a government that people would have expected more from.”

The subsidies were put in place to incentivise the switch to emission-friendly electric cars, which typically come at a higher price point than their petrol and diesel counterparts.

Under the NSW Electric Vehicle Strategy, drivers purchasing new EVs under $78,000 were exempt from paying motor vehicle stamp duties of $2,500 on average until July 2027 when a new road user charge would have been introduced.

“This important tax reform was in the best interest of motorists by replacing an upfront tax that often stopped people from getting into a newer, cleaner car,” Mr Jafari said.

NSW’s EV policy was expected to increase sales to 52 per cent by 2031 and accelerate movement towards the government’s 2050 net-zero emissions target.

Other Australian jurisdictions each has its own EV incentive in place, with Queensland offering the highest benefit of $6,000 in rebates and 33 per cent discount on stamp duty.

Victoria launched a $3,000 subsidy in May 2021, but prematurely terminated the program in June this year, claiming the incentive had been utilised lower than expected at just 10,000 rebates claimed.

The subsidy program had proved effective, according to data analyses from the NRMA, with the total market share of EVs in Australia increasing from about three per cent in 2022 to 7.4 per cent in the first half of 2023.

For NSW, since the rebates were launched, sales rose by 450 per cent and the most popular EV models fell in price by $8,000.

However, Treasurer Mookhey said the incentivisation of EVs came with a risk of driving up retail costs and increased profits to manufacturers, SMH reported.

The incentives were first introduced by the former state government in 2021, which Labor endorsed in this year’s state election.

The EVC has called for the NSW Parliament to reject the changes as it risked “broken faith with voters”.

“The Opposition, the Greens and the others in the NSW Upper House should defend the state’s interests and oppose the government’s short-sighted backflip,” Mr Jafari said.

Extracted  in full from: NSW government’s termination of electric vehicle subsidies rebuked by national body for going against public’s ‘best interests’ | Sky News Australia