Labor faces electric vehicle roadblock over inclusion of hybrid cars

The Albanese government made good on its campaign promise to make EVs cheaper with the introduction of legislation which would cut the fringe benefits tax on low and zero emissions vehicles. But it includes plug-in hybrids, which rely on petrol combustion engines as well as electric power and are already commercially competitive.

The Greens and Pocock are concerned the inclusion of plug-in hybrids would bake in another taxpayer-funded fossil fuel subsidy while slowing the take-up of actual zero emission vehicles.

The opposition has already announced it will be voting against the legislation, on the grounds it believes the subsidies will cost taxpayers too much. That leaves Labor reliant on the Greens and independent senators such as Pocock if it wants to pass the bill.

Bandt said an easy solution was for the government to remove plug-in hybrids from the legislation, a move a parliamentary budget office analysis found would save almost $1bn over 10 years, and put the money into EV infrastructure, such as charging stations.

Bandt said more than $11bn of taxpayer funds were spent on fossil fuel subsidies every year and the government needed to start cutting the freebies, not adding to them.

Pocock said he was thinking along similar lines.

State and territory government EV incentive programs exclude plug-in hybrids because they do not meet the zero-emission goals.

Australians bought nearly 3,000 plug-in hybrid vehicles in the first half of 2022, more than doubling the number sold during the same timeframe last year. However, a Senate committee heard the vehicles were not as green as people believed.

Research showed the real-world emissions of the vehicles were on average three to five times higher than what the cars were reported to emit, with the vehicles spending more time reliant on their petrol internal combustion mode than people assumed.