Labor extends EV tax break to encourage cheaper vehicles amid soaring fuel prices

When Labor first pitched the EV discount before the 2022 election, it was projected to cost $605m in the seven years to 2029. Treasury most recently estimated it would cost $10.1bn over the same period. Photograph: Dan Himbrechts/AAP

Labor has opted to retain its electric vehicle discount in full for another year as Australians rush to buy EVs amid soaring fuel costs linked to the Iran war.

But the budget next Tuesday will include a number of “sensible changes” that wind back the scale of support over the next three years as the government acknowledges the need to deliver a “more financially sustainable” tax incentive for EVs amid ballooning costs of the scheme.