Electric Surge in Australia Could Hit the Brakes Without Incentives

A significant portion of Australian motorists are now thinking about their next car being electric or a hybrid, but proposed changes to tax incentives risk dampening that enthusiasm. According to a new report from the Australian Finance Industry Association, interest in low‑emission vehicles is rising, yet potential policy shifts could reduce future purchases.

The association’s annual finance report shows that loans for electric and hybrid cars grew sharply in 2025, increasing by nearly 20% compared with the previous year. The total amount borrowed for these vehicles reached $7.37 billion, covering more than 129,800 purchases across the year.

While hybrid and plug‑in hybrid vehicles still outsold fully electric cars, electric‑only models saw the fastest growth, with sales up by almost 30% over the same period.

A separate consumer survey conducted for the report- involving more than 1,000 Australians- found that 39% of respondents plan to buy an electric or hybrid vehicle next, compared with 46% who said they would choose a petrol or diesel car.

However, the research suggests that future EV and hybrid purchases are sensitive to government incentives. Around one‑third (37%) of people surveyed said they would be less likely to buy an EV if a significant tax exemption were removed. The exemption under review relates to fringe benefits tax (FBT) concessions for certain electric vehicles.

The report also noted that when the FBT concession was removed for plug‑in hybrids in 2025, the number of finance deals for those vehicles dropped sharply, indicating that buyers are responsive to changes in tax policy.

Industry figures argue that while sales of low‑emission vehicles are growing, maintaining supportive policies will be important to keep momentum strong, both to reduce transport emissions and to ensure continued consumer interest in EVs.

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Original Article Source: The Driven