NSW government announces $263 Million new investment in EV infrastructure, phases out EV incentives early

The NSW Government last Saturday announced it will phase out electric vehicle (EV) rebates and instead target a broad rollout of EV charging solutions in its 2023-24 budget.

From 1 January 2023, the $3,000 rebate for EV purchases that commenced in 2021 and exemptions for stamp duties will cease. To the end of August 2023, less than 9,000 of the original 25,000 EV rebates (worth $27 million) have been claimed.

If drivers have placed a deposit on an EV before that date, they will still be eligible for a rebate even if the vehicle has not yet been delivered.

Instead of completing the $75 million EV rebate commitment, a new $263 million funding will support a revised NSW EV Strategy and the state’s goals to achieve Net Zero emissions targets of 50 per cent new electric car sales by 2030.

The revised strategy will include further deployment of fast chargers along key routes, more kerbside street chargers near apartment blocks, and upgrades to grid capacity to support EV fleets.

New co-funding will focus on infrastructure development for people driving in the regions as well as for people who have limited home charging options, such as renters and apartment dwellers.

In addition to the new $263 million in funding, an additional $149 million has already been dedicated to co-fund the establishment of ultra-fast EV charging stations. $20 million is being allocated to co-fund EV chargers in commuter carparks, and another $20 million will go towards co-funding destination charging along tourist routes.

On top of that, the state government is putting $10 million to co-fund around 500 kerbside charge points in areas of metropolitan NSW where residents do not have access to off-street parking. To facilitate this transition to electric vehicles, $10 million is also being allocated to co-fund upgrades to electrical infrastructure in around 100 medium and large apartment buildings.

Additionally, the NSW Government is investing $105 million to support private and local council fleets in purchasing EVs.

At the same time as investing in the above, the government is committed to electrifying its own passenger vehicle fleet.

In addition to the changes to the state’s EV policy mentioned above, the government also reconfirmed a Road User Charge will commence from 1 July 2027 or earlier if battery EVs make up 30% of new light vehicle registrations.

However, according to this report, the road user tax will not apply to EVs bought before September 2021, nor those bought between September 2021 and January 2024 that did not receive a stamp duty waiver.

This effectively means that people who bought EVs at the upper end of the spectrum (above $78,000 dutiable value) during this period will not have to pay the road user tax for that vehicle.

EV policy shift sparks debate

The NSW Government's decision has sparked a public debate on the effectiveness and fairness of EV incentives. While the government argues that the changes will result in a more equitable and efficient EV rollout, critics believe it could stifle the momentum gained in EV adoption, particularly in less affluent regions.

The Electric Vehicle Council (EVC) criticised the government's decision to phase out incentives, calling it a "betrayal of voters." EVC Chief Executive Behyad Jafari stated that the existing incentives had increased EV sales by 450% and reduced the price of popular EV models by $8,000.

Jafari argues that the policy changes would disproportionately affect less affluent areas, forcing families to "stick to costly gas guzzlers and a time when petrol prices are going through the roof."

However, with access to charging at home still a barrier to entry from many drivers and charging queues on the key routes increasing particularly during holiday periods, others argue the money is better spent on EV charging.

The EVC also expressed concern over the reintroduction of stamp duty, which was set to be replaced by road user charges in 2027. Jafari urged the NSW Parliament to reject the changes to preserve the benefits of existing policies.

Full details of the new EV policy are expected to be released in early 2024.