Electric vehicle incentives in Australia compared to rest of the world

[meloccom]

Perhaps they should put LCT on private Jets and Yachts, that might plug a small hole in the budget and makes about as much sense.

 

[paulp]

I think we need to look at what the initial goal was, especially for the LCT, and work out if it is actually achieving this goal.

I can imagine the justification for LCT would sound like "Cars that cost more then $X are so expensive that only the rich would buy them as luxury items - these are people who should be paying more taxes. Besides we want to encourage people to buy locally produced cars."

However:

• We also have GST, wasn't this the idea with GST? The higher the cost the purchase the more tax you pay? Why do we need both LCT and GST?
• Locally produced cars???
• Assumption that the only value more expensive cars provide is added luxury is not correct.
• I have seen the opinion that the Model S is not a luxury car.
• Even if you want to argue that the Model S is a luxury car, it seems clear that many people are buying for other reasons.
• The Model S with no options, in the cheapest Australian state, is $136K. The cheapest Model 3 is expected to be at least $60K.
• I see brand new ICE cars being advertised for $20K. Possibly before taxes, not sure. To be sure lets make that $35K inclusive (possibly on the high side).
• I think people who buy Tesla cars are not comparing with the equivalent value ICE car. i.e. if you don't buy a $136K Telsa you are not necessarily going to buy a $136K ICE car instead (unless you are indeed rich). More likely they will purchase a considerably cheaper ICE car instead.
• The electric cars provides benefits to environment and safety that benefits as all. This should result in reduced government spending.
• Hence it is is governments best interests if people buy these cars instead.
• An excellent argument could be made that they should be investing in public transport instead; however our current federal government is equally poor at this too. Our state governments aren't necessarily much better. Hence people buy the Model S because they can't imagine the public transport meeting their needs (or walking / bike riding for that matter) and they don't want an ICE car. I could write many pages on this point.
• Hence the $35K vs $136K is heavily biased in favour of the ICE car. While this is not something that can be easily "fixed", the government should not be contributing to the problem with large taxes (especially LCT).
• Even when the Model 3 comes up, it probably will be at least $60K. I would imagine with reasonable options (e.g. AWD, biggest battery, autopilot, possible upfront supercharger fees) it could exceed the LCT threshold.
• I haven't done the sums to verify this, however it sounds like the LCT also encourages buying the Model S with fewer features then you want and then spending more after purchase on upgrading the car afterwards. Hence sending more money overseas.

Did I miss anything? Get anything wrong?

More facts and citations for the above would be good . Maybe could be written up as a formal letter or something addressed to the appropriate politicians.

365,000 aussies earn over $180k, which means they are taxed at 47+2c per dollar. Those 365,000 people represent 2.9% of tax payers, yet they contribute 30% of the nations income tax.
So before you pay your luxury car tax and GST, you first have to earn the cash and pay income tax, so the reality is that your tesla could be costing you anywhere near 400k in gross earnings, with something like 65% of it going to tax when buying a luxury car. At least we are spared the excise duty on fuel.

 

[TesAus]

at least we are spared the excise duty on fuel.

For now. I suspect that some politician (probably spurred on by big oil) will come up with a way to capture the "missing" fuel excise once EVs represent a more significant percentage of cars on the road.

 

[paulp]

For now. I suspect that some politician (probably spurred on by big oil) will come up with a way to capture the "missing" fuel excise once EVs represent a more significant percentage of cars on the road.

I think they are trialling that in SA with our 38c power and no off-peak allowed for new connections.