Image: Pixabay/MLbayA recent evaluation of the incentive scheme, titled Statutory Review of the Electric Car Discount, found that the programme led to approximately 64,000 additional sales of battery-electric vehicles between 2022 and 2025. An additional 78,000 plug-in hybrids were also sold during this period, though these are now excluded from the incentive. Meanwhile, the share of electric cars in new registrations rose from 2.0% in 2021 to 13.1% in 2025. Nevertheless, Australia remains below the global average of 22%.Treasurer Jim Chalmers and Energy Minister Chris Bowen have announced that the existing scheme will be extended until the end of March 2027. Until then, the full exemption from the Fringe Benefits Tax (FBT) on the portion of salary used to pay leasing instalments will remain in place. As the FBT typically amounts to 47%, this exemption can save thousands of Australian dollars over the course of a leasing contract.In the second phase, running from 1 April 2027 to 1 April 2029, the full FBT exemption will only apply to electric vehicles with a purchase price of up to 75,000 Australian dollars. According to Treasurer Chalmers, this measure aims to encourage manufacturers to offer more affordable battery-electric cars in the Australian market. During this phase, electric vehicles costing more than 75,000 Australian dollars but below the luxury car tax threshold of 120,000 Australian dollars will qualify for a 25% discount on the FBT payable.In a third phase, starting on 1 April 2029, all electric vehicles below the luxury car tax threshold will only qualify for a 25% discount on the FBT payable. Importantly, the Australian government will also maintain the permanent exemption from import duties for electric vehicles eligible under the incentive programme.According to the Guardian, the incentive programme has gained significant popularity since the Iran war and the closure of the Strait of Hormuz. These events raised concerns among supporters that the Australian government might discontinue the electric vehicle incentives due to cost pressures. Instead, the government has introduced a multi-stage approach that maintains the incentive in principle but gradually reduces its scope per applicant in the coming years.treasury.gov.au, guardian.co.uk, treasury.gov.au (evaluation report; PDF)