Ending a tax exemption for electric vehicles could unfairly punish families outside major metropolitan areas who are dealing with longer commutes and are most likely to maximise the tax cut.
The National Automotive Leasing and Salary Packaging Association issued the warning on Saturday, revealing the top 10 postcodes for motorists who had taken up the Electric Car Discount.
Almost all of the vehicle hotspots were in outer suburban areas of NSW, Victoria, and Queensland, with some more than an hour’s drive from the nearest city.
The news comes as the federal government reviews the fringe benefits tax exemption for electric cars and as global fuel supply issues and high demand push the price of petrol and diesel beyond $2 a litre.
The tax cut for some electric cars purchased through novated leases was introduced in 2022 but has been claimed by more motorists than expected – more than 114,000 of them.
The federal government is reviewing the exemption after the Productivity Commission recommended it phase out discounts for electric cars.
But removing the tax cut would hit households in outer suburbs the hardest, National Automotive Leasing and Salary Packaging Association chief executive Rohan Martin said, and drive up the cost of living.
“Since its inception, the EV FBT tax exemption has been most popular among working families living in the outer suburbs – a pattern that continued strongly in 2025,” he said.
“Australians living in the outer suburbs often face longer commutes and are more likely to have access to rooftop solar and off-street parking.”
The discount often made the difference between motorists choosing an electric vehicle over a petrol car, Mr Martin said, as some families could not otherwise overcome the price gap.
Assisting motorists to invest in electric vehicles would be particularly important in the coming months, Rewiring Australia chief executive Francis Vierboom said, as fuel prices remained volatile.
“Australians will be spending $700 more a year at the bowser because of instability on the other side of the world,” he said.
“The discount on salary packaging EVs gives working families an alternative to expensive and dirty petrol vehicles.”
Sunshine Coast primary school teacher Shantele bought an electric SUV using the tax exemption almost a year ago.
Her family of five had considered switching from a petrol car to cut costs for the 80-minute weekday commute between Beerwah and Mooloolaba, but the tax exemption made it financially possible.
“The tax cut made a lot of sense,” she told AAP.
“It was something we’d been talking about doing – going to an electric vehicle – and this made it a better way to do it.”
Her next vehicle would likely be an electric van to accommodate growing children, Shantele said, but only if the tax cut remained.
TOP POSTCODES FOR ELECTRIC VEHICLES WITH TAX CUTS 2025
1. Victoria 3029: Tarneit, Hoppers Crossing
2. Victoria 3030: Werribee, Point Cook
3. NSW 2765: Marsden Park, Riverstone
4. NSW 2155: Kellyville, Rouse Hill
5. ACT 2611: Coombs, Wright, Duffy
6. Queensland 4300: Springfield, Springfield Lakes
7. Victoria 3064: Craigieburn, Roxburgh Park
8. NSW 2153: Baulkham Hills, Winston Hills
9. NSW 2620: Queanbeyan
10. ACT 2914: Harrison, Bonner, Amaroo
Source: National Automotive Leasing and Salary Packaging Association
AAP
