Apologies if this a bit of a detailed question and somewhat rant but... Is anyone else pissed off at the active disincentive to buy an EV for a business?
I understand the principal in Australia is that if you are buying a $100k+ car then you must be so wealthy that paying a few extra tens of thousands isn't a big deal, but that's just plain wrong for most businesses that any financial acumen.
I see the gaps for business buyers in the following ways:
Luxury Car Tax on EV is against the common good--
The only federal level incentive I can see (if you can even call it that) is the LCT threshold is slightly higher because a Tesla is considered a "fuel efficient vehicle".
Say what you will about Teslas and EVs in general but one thing is categorically true-- they have zero tailpipe emissions. This has significant societal benefit in that it doesn't cause local air pollution and is therefore conducive to a healthier environment for all. I for one am happy as a tax payer to subsidise a parent at my kid's school buying a Model X over an Audi Q7 insofar that they are not paying LCT on the Model X.
The Audi over its lifetime, no matter how fuel efficient, will emit pollution that is completely unaccounted for and somebody at some in the future will need to pay for it.
Fringe Benefit Tax Law ruins the chance for EV company cars
If you work for a company that provides you with a nice passenger vehicle to do your job which you also use privately-- this is considered a fringe benefit and the ATO rightly wants this benefit to be taxable.
The way this is calculated is the employer essentially takes the original purchase price (including the above Luxury Car Tax), deducts any operational costs and pays a certain percent of the difference as additional tax per year straight to the ATO.
The problem of course is that EVs are relatively high upfront cost and extremely low operational cost. This makes the FBT on Teslas VERY expensive. I can't think why any employer agreeing to take on this additional tax burden.
What's more is that it disincentives an employee getting rooftop solar to charge their car, or using off-peak rates for example as any effort to reduce operational costs simply increases the FBT taxable amount.
Abolish LCT and FBT for any pure-EV ! This is the only way to make it attractive to businesses !
Example:
Purchase price
Model X: $140,515 + $18,885 LCT = $159,400
Audi Q7: $119,990 + $15,375 LCT = $135,365
(Removing LCT alone would make a huge difference to incentivising high end EV ownership)
FBT calculation:
Model X: $160k base price - $5k operational costs) = $27k of extra taxable "income" per year for the business
Audi Q7: $135k base price - $15k operational costs = $12k of extra taxable "income" per year for the business
So all in all, buying a Q7 would be $10k cheaper upfront AND ~$5k cheaper expensive in taxes for a business to consider.
I understand the principal in Australia is that if you are buying a $100k+ car then you must be so wealthy that paying a few extra tens of thousands isn't a big deal, but that's just plain wrong for most businesses that any financial acumen.
I see the gaps for business buyers in the following ways:
Luxury Car Tax on EV is against the common good--
The only federal level incentive I can see (if you can even call it that) is the LCT threshold is slightly higher because a Tesla is considered a "fuel efficient vehicle".
Say what you will about Teslas and EVs in general but one thing is categorically true-- they have zero tailpipe emissions. This has significant societal benefit in that it doesn't cause local air pollution and is therefore conducive to a healthier environment for all. I for one am happy as a tax payer to subsidise a parent at my kid's school buying a Model X over an Audi Q7 insofar that they are not paying LCT on the Model X.
The Audi over its lifetime, no matter how fuel efficient, will emit pollution that is completely unaccounted for and somebody at some in the future will need to pay for it.
Fringe Benefit Tax Law ruins the chance for EV company cars
If you work for a company that provides you with a nice passenger vehicle to do your job which you also use privately-- this is considered a fringe benefit and the ATO rightly wants this benefit to be taxable.
The way this is calculated is the employer essentially takes the original purchase price (including the above Luxury Car Tax), deducts any operational costs and pays a certain percent of the difference as additional tax per year straight to the ATO.
The problem of course is that EVs are relatively high upfront cost and extremely low operational cost. This makes the FBT on Teslas VERY expensive. I can't think why any employer agreeing to take on this additional tax burden.
What's more is that it disincentives an employee getting rooftop solar to charge their car, or using off-peak rates for example as any effort to reduce operational costs simply increases the FBT taxable amount.
Abolish LCT and FBT for any pure-EV ! This is the only way to make it attractive to businesses !
Example:
Purchase price
Model X: $140,515 + $18,885 LCT = $159,400
Audi Q7: $119,990 + $15,375 LCT = $135,365
(Removing LCT alone would make a huge difference to incentivising high end EV ownership)
FBT calculation:
Model X: $160k base price - $5k operational costs) = $27k of extra taxable "income" per year for the business
Audi Q7: $135k base price - $15k operational costs = $12k of extra taxable "income" per year for the business
So all in all, buying a Q7 would be $10k cheaper upfront AND ~$5k cheaper expensive in taxes for a business to consider.
