Electric car owners dodge road charge but pay more tax

The announcements come after record-breaking sales for electric vehicles in March and April, fuelled by petrol price shortages and price rises.

The government confirmed changes to its electric car discount in the budget papers, revealing it would collect another $1.95 billion in fringe benefits tax from motorists over the next four years.

The full tax discount will apply only to electric cars worth $75,000 and less from April 2027, purchased under novated leases, and will become a 25 per cent fringe benefits tax cut for all electric vehicles under the luxury car tax threshold from April 2029.

Making the discount a permanent budget measure would boost electric car adoption, Treasurer Jim Chalmers said, while ensuring the scheme did not blow out.

"We'll put in place more sustainable long-term settings to support the take up of electric vehicles," he said.

Motorists bought 330,000 electric cars under the discount its first three years of operation, according to a review, including 78,000 low-emission vehicles that would not have otherwise been purchased.

A road-user charge for electric vehicle drivers, as recommended by the Economic Reform Roundtable, has been put on hold while the federal government develops a policy with state and territory governments.

A similar annual road charge introduced for electric and hybrid vehicle drivers in Victoria was overruled by the High Court in 2023, and another is proposed for NSW motorists in 2027.

Other commitments for electric vehicles include a year-long extension to an initiative supporting the sale and servicing of the cars at dealerships and repairers and an additional $40.5 million to electrify Australia Post's fleet of delivery vehicles.

A further $40 million will also be spent on electric vehicle charging stations in regional black spots and for kerbside charging.