The Electric Car Discount Bill currently passing through parliament could be a big motivator for Australian businesses to adopt electric vehicles, a survey of 210 small and medium-sized enterprise (SME) owners has shown.
The research, which was commissioned by Small Business Loans Australia, shows that 66 percent of SMEs would be incentivised to purchase an EV with the savings the Bill presents, with up to 40 percent prepared to buy one within the next year.
To break that number down further, 57 percent of small businesses (11-50 employees) and 45 percent of medium-sized businesses (51-200 employees) would be prepared to within the coming year.
However, ‘micro’ businesses – those with between one and 10 employees, which made up 44 percent of those surveyed – were the least likely to make the switch even with government-backed price reduction policies. 55 percent of these micro businesses said an outright no to investing in an EV, while only 19 percent – the next most popular response – would consider one in 2025 or beyond.
The Electric Car Discount Bill itself – which was first proposed by the current Albanese Government in July – will see the fringe benefits tax (FBT) waived on electric, hydrogen, and plug-in hybrid vehicles to incentivise the uptake of electrified vehicles as Australia looks toward its 2050 net-zero emissions target. This is something the Grattan Institute’s Ingrid Burfurd says “[will mean] that the cars that we sell in 2035 need to be almost exclusively zero-emission.”
However, it’s worth noting the discounts will only apply to vehicles with a price that falls under the luxury car tax (LCT) threshold, which for the 2022-23 financial year sits at $84,916 for EVs. This is also the case with some of the rebates offered on EVs by state governments, although these rebates do differ, as does the availability of them.
That’s a big part of why more businesses in Victoria (71 percent), New South Wales (68 percent), and South Australia (67 percent) are likely to buy an EV than those in Western Australia (62 percent) and Queensland (58 percent). Tasmania and the Territories were not surveyed.
However, a statement from Treasurer Jim Chalmers regarding the Bill’s initial proposal claims that the FBT being waived on an EV worth $50,000 would save the business “up to $9000 a year.” Few EVs are priced under that mark, however, with the MG ZS EV and BYD Atto 3 the most noteworthy.
Given the high cost of EVs, 63 percent of businesses would still look to finance an EV were they do purchase one despite recent interest rate hikes; the larger the business, the more likely it was to finance the vehicle.
“The Federal Government understands that the price of electric vehicles has been a major barrier to their adoption in Australia,” Alon Rajic, Founder and Managing Director of Small Business Loans Australia, said of the Bill.
“Our research suggests that the removal of this barrier will have an enormous positive influence on business purchase decisions. It also indicates that Australian business owners support realistic Government efforts to achieving net-zero emissions – so much so, that they would get financing on their vehicles in a climate of fast-rising interest rates.”
The Australian Government is pledging $345 million toward the Electric Car Discount in the 2022-23 Budget, while the $500 million ‘Driving the Nation Fund’ will see EV charging stations placed at 117 highway sites and hydrogen stations located on key freight routes.
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