Nissan Leaf, Hyundai Ioniq 5, MG ZS EV and other electric cars to be cheaper under Labor government

An elected federal Labor government will make electric cars cheaper by cutting import tariffs and fringe benefits tax from mainstream zero tailpipe-emissions models, as promised by Anthony Albanese.

Dubbed the ‘Electric Car Discount and Power to the People – Community Battery Plan’, the aim is to reduce the barrier to entry for EVs in Australia so more people can buy them, “cutting fuel and transport costs for households and reducing emissions at the same time”, according to the release.

The proposed savings will only apply to “non-luxury electric vehicles” though, meaning models like the Nissan Leaf, Hyundai Ioniq Electric, MG ZS EV and incoming Kia e-Niro will benefit, while others like the Mercedes-Benz EQC, BMW i3 and Audi e-tron will remain at their current price points.

Though exactly how much these models will drop in price is currently unclear, but the recommended retail pricing for the Leaf, Ioniq Electric and ZS EV start at $49,990 before on-road costs, $48,970 and $43,900 drive-away respectively.

Last year, EVs (excluding Tesla) represented just 0.26 per cent of all new cars sold, according to VFACTS data, while just 0.7 per cent of Australia’s overall car parc is in tailpipe emissions-free models.

The peak automotive governing body – the Federal Chamber of Automotive Industries (FCAI) – has thrown its support behind the announcement, with chief executive Tony Weber saying “we will be pleased to work alongside any government in their efforts to introduce positive policy directions for the increase of the best technology vehicles that are available to Australians”.

“Australia is lagging the rest of the world when it comes to a long-term vision for the continued penetration of low emission vehicles,” he said. “The automotive sector has seen around the world that strong signals around targets, good infrastructure policy and incentives from national governments contribute to positive outcomes on low emission vehicle introduction.

“The ALP announcement gets the topic back onto the policy agenda and that is critical right now. Positive signals like this can encourage global car brands to increase the choice of low emission vehicles available in our market which in turn increases the adoption of electrified vehicles available to customers.”

Labor also has plans to revive car manufacturing in Australia and has thrown out a $15 billion carrot to attract industry to build low-emission vehicles.

The proposal announced this week is part of Labor’s push to power and comes under its new ‘National Reconstruction Fund’ aimed both at stimulating the manufacturing industry and reducing transport emissions.

In releasing the outline of the plan, Mr Albanese said: “Australia must be a country that makes things, to have our own industrial and manufacturing capabilities.

“If there is anything that COVID has taught us, it is the need for Australia to be a place which makes things-to have our own industrial and manufacturing capabilities – our own sovereign capabilities,” he said.

Labor wants also to “develop a domestic decarbonised vehicle industry strategy” that indicates local production will be electric vehicles.

The plan has also hit a snag with the body representing new-car manufacturers through their importers and distributors. The FCAI said Australia has missed its opportunity to maintain a manufacturing foothold since car-making ended here in 2017.

Mr Weber said Australia has strengths in vehicle design, and research and development, but making cars here required a high-volume market that Australia doesn’t have.

“Even if we look at exporting, the free-trade agreements affect how we deal with countries in South-east Asia that also manufacture cars,” he said.

“Unless we have volume and pricing, we would find it very difficult to compete.”

Mr Weber said governments should instead put more attention on nurturing other aspects of the automotive industry - such as design and engineering - where the country has shown world-leading expertise.

“I think there are much greater advantages if we can turn government aid to helping develop skills in automotive areas outside of manufacturing.”

Labor’s proposal was launched under the banner of the National Reconstruction Fund. It involved setting aside $15 billion to invest in the development of a car manufacturing industry based on producing EVs, in a style that appears to mirror Tesla’s manufacturing program in the US.

If it goes ahead, it would dramatically alter the landscape of car making in this country that once centred on large, family-focused vehicles with large engines – including V8s – to suit country motoring.