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NSW Releases New EV Policy

The Australian government has unveiled an ambitious $490 million package of new incentives, tax cuts and spending on new fast-charging infrastructure for electric vehicles – some of the best available in Australia.

The funding package has been revealed ahead of the next NSW government budget and includes a wide range of measures to cut the upfront costs of electric vehicles for early adopters, a commitment to transition the entire government vehicle fleet to all-electric models by 2030 and includes $171 million for new charging infrastructure across the state.

Under the plan, the NSW government will waive stamp duty for electric vehicles priced under $78,000 – just below the luxury car tax threshold – and an additional $3,000 rebate will be available for the first 25,000 purchases of battery and hydrogen fuel cell vehicles with a price below $68,750. The support is designed to both lower the cost of electric vehicles, as well as encourage car makers to bring lower-cost models into the Australian market.

However, this extra support will be counterbalanced by new fees to be paid by electric vehicle drivers, with the NSW government becoming the latest jurisdiction to introduce a road user fee for electric vehicles, similar to a new per-kilometre tax introduced in Victoria.

It is understood that the introduction of a per-kilometre tax on electric vehicles in New South Wales has been ‘deferred’ and will commence in 2027. The reforms are likely to be seen as part of a wider move by governments to shift away from depending on stamp duty fees as the core source of revenue, towards ongoing and user-based taxes.

The introduction of per-kilometre fees for electric vehicles in Victoria was widely panned, described as one of the worst electric vehicle policies in the world, and likely contributed to that state government’s decision to provide its own $3,000 rebate for electric vehicle purchases.

However, the NSW Energy Minister stated that the new policies should put the state on track to see 50 per cent of new car sales be electric vehicle models. “Countries and carmakers around the world are moving to EVs and NSW consumers deserve access to the latest vehicle models when they go to buy a car,” Kean said. “We also know that, with new cars staying on the road 15 years on average, the vast majority of new cars sold in NSW need to be EVs by 2035 to achieve net-zero emissions by 2050.”

The region’s aim is to increase EV sales to more than 50 per cent of new cars sold in NSW by 2030 and for EVs to be the vast majority of new cars sold in the State by 2035. The NSW government will spend $131 million to establish a network of ultra-fast vehicle chargers, providing easy access across all of the state’s major highways – establishing its own ‘super highways’ similar to those in Queensland – and ensuring most commuters within Sydney are less than 5 minutes drive to a fast-charging station.

A further $20 million in grants will also be provided to key tourist sites to offer destination charging facilities and an additional $20 million for charging infrastructure at public transport hubs. The NSW government will also ramp up its own uptake of electric vehicles, with the state budget including $33 million to fund further purchases of electric vehicles to be added to the state government’s vehicle fleet – with the federal government setting itself a target for a fully electric government fleet by 2030.

The NSW Transport Minister noted that boosting the uptake of electric vehicles would help reduce the state’s emissions and the new policies would help commuters reduce their overall transport costs. The transport sector currently makes up 20 per cent of the state’s emissions, with almost 50 per cent of those coming from passenger vehicles.

Electric vehicles are not only cheaper to run and quieter on the roads, but they also reduce both carbon emissions and air pollution which results in dramatically improved health outcomes for local communities, the Minister stated.

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