The proposed repeal would eliminate the fringe benefits tax exemption for new battery EVs priced under $91,387, which has previously saved buyers around $5,000 annually.

Critics have raised concerns about the sustainability of the tax break, which has ballooned from an initial estimate of $55 million annually to approximately $560 million due to high participation rates.

Since its introduction in mid-2022, the tax break has attracted nearly 100,000 customers, significantly boosting EV adoption in Australia.

The tax break has effectively increased the share of EVs in new car sales from 3.3% in 2022 to 9.6% in 2024, demonstrating its impact on the market.

However, research indicates that the majority of beneficiaries are high-income earners, raising questions about the equity of the incentive.

Peter Dutton, leader of the Coalition, has announced plans to repeal a popular tax break for electric vehicle (EV) drivers, which could significantly increase EV costs under a Coalition government.

This announcement comes just two days after Dutton pledged to maintain the tax break, highlighting a sudden reversal in the Coalition's stance.

While the Coalition acknowledges the inequity of the current tax break, they have not proposed alternative measures to address rising transport emissions.

The rollback of the tax break and fuel efficiency standards could reverse progress in reducing transport emissions, complicating Australia's efforts to meet international climate commitments.

The Electric Vehicle Council has expressed confusion and disappointment over the Coalition's backtrack, emphasizing the tax break's importance for cost-of-living relief.

Despite the controversy, data shows a growing demand for EVs, particularly in suburban areas of Melbourne and Sydney, indicating a shift in consumer preferences.

In addition to the tax break repeal, the Coalition plans to abolish Labor's fuel efficiency standards, which impose penalties on car manufacturers exceeding emissions limits.