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National Electric Vehicle Strategy
Productivity Commission submission
The Productivity Commission provided a submission to the National Electric Vehicle Strategy (NEVS) consultation process. The Commission anticipates that electric vehicles (EVs) will make an important contribution to Australia’s decarbonisation, by leveraging the decarbonisation of our electricity grid to reduce Australia’s consumption of liquid fossil fuels. EV uptake might also reinforce the decarbonisation of the electricity grid by providing for a growing stock of second-hand EV batteries that could be reused for grid firming. However, making the most of this transition will require thoughtful policy settings, and unnecessarily expensive and inefficient policy options should be avoided.
The Commission provided an initial submission to the NEVS consultation process on 31 October 2022 that was published on the Commission's website on 21 November 2022. The Commission provided an updated submission on 17 February 2023. The update was published on the Commission's website on 20 February 2023.
The initial submission included preliminary estimates of the indirect carbon prices of State and Territory demand-side subsidies for electric vehicles, published in Interim Report 4 of the Productivity Inquiry. These estimates were updated in the course of finalising the Productivity Inquiry to include the Commonwealth Fringe Benefits Tax (FBT) exemption for electric vehicles leased through salary sacrifice arrangements, following the passage of the Treasury Laws Amendment (Electric Car Discount) Bill 2022. The State and Territory estimates were also revised to reflect a number of parameter adjustments, including a longer assumed EV life.
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