Electric Vehicle Incentives Australia 2026: Complete Guide to Savings

The electric vehicle market in Australia has grown rapidly over the past two years, driven by a combination of falling vehicle prices, improving charging infrastructure, and a suite of government incentives designed to accelerate EV adoption. If you are considering purchasing an electric vehicle in 2026, there are significant savings available through federal and state incentives, tax benefits, and specialised green car finance products. This guide covers every incentive currently available, explains how they stack up, and helps you calculate the true cost of going electric.

Federal EV Incentives

Fringe Benefits Tax (FBT) Exemption

The most significant federal incentive for EVs is the FBT exemption, which has been in place since 1 July 2022. Eligible electric vehicles (battery electric and plug-in hybrid electric vehicles with a value below the luxury car tax threshold for fuel-efficient vehicles, currently $91,387) are exempt from Fringe Benefits Tax when provided through a salary sacrifice arrangement or as part of an employer fleet. For an employee, this effectively means you can salary sacrifice a new EV and avoid the 47 per cent FBT that would normally apply to a car fringe benefit. On a $60,000 EV, the FBT exemption could save approximately $10,000 to $15,000 per year compared to salary sacrificing a petrol vehicle. Over a typical three-year novated lease, the total tax saving can exceed $30,000. This incentive applies to both battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), although there have been discussions about tightening eligibility for PHEVs in future years. For now, both qualify as long as the vehicle value is below the threshold.

No Import Tariffs on EVs

As of 2025, Australia does not impose import tariffs on electric vehicles. This contrasts with a 5 per cent tariff that applies to most internal combustion engine vehicles. While this does not represent a direct rebate to the buyer, it does contribute to lower sticker prices for EVs compared to what they would otherwise cost.

Luxury Car Tax Threshold

The luxury car tax (LCT) threshold for fuel-efficient vehicles (which includes EVs) is $91,387, compared to $76,950 for standard vehicles. This higher threshold means you pay no LCT on EVs priced up to $91,387, potentially saving thousands on mid-to-upper range electric vehicles.

State and Territory Incentives

New South Wales

NSW offers stamp duty exemptions for new and used battery electric vehicles and hydrogen fuel cell vehicles. The exemption applies to EVs with a dutiable value up to $78,000. On a $60,000 EV, this saves approximately $1,800 to $2,200 in stamp duty. NSW previously offered a $3,000 EV rebate, but this program has concluded. However, the stamp duty exemption remains a meaningful saving.

Victoria

Victoria provides a $100 annual registration discount for zero-emission vehicles. While Victoria introduced a road user charge for EVs (currently 2.8 cents per kilometre for BEVs), the registration discount partially offsets this. Victoria previously offered a $3,000 EV subsidy, which has now ended.

Queensland

Queensland offers a $6,000 rebate for battery electric vehicles and $3,000 for plug-in hybrids purchased new, subject to a vehicle price cap of $68,000. This is currently the most generous direct rebate of any state. The program has limited funding, so availability should be confirmed before purchase.

South Australia

SA provides a three-year registration exemption for new battery electric vehicles, saving approximately $300 to $400 per year. No direct purchase rebate is currently available.

Western Australia

WA previously offered EV registration concessions and rebates, but most programs have concluded. Check the WA Government website for any new initiatives.

ACT

The ACT offers stamp duty exemptions for new zero-emission vehicles and two years of free registration. These are among the most generous state-level incentives in the country.

Tasmania and NT

Both jurisdictions offer stamp duty discounts for electric vehicles. Tasmania provides a two-year registration waiver for new EVs.

Green Car Loans: Lower Rates for EVs

Beyond government incentives, many lenders now offer discounted interest rates for electric and hybrid vehicle purchases through green car loan products. These loans recognise the lower running costs and environmental benefits of EVs by offering rates that are typically 0.50 to 1.50 per cent lower than standard car loan rates. At Your Finance Guide, we access green car loans starting from around 5.49 per cent for eligible EVs and hybrid vehicles. To qualify, the vehicle generally needs to be a battery electric vehicle, plug-in hybrid, or standard hybrid manufactured within the last few years. Some lenders extend green rates to other fuel-efficient vehicles that meet certain emissions thresholds. The interest savings over the life of a five-year loan can be substantial. On a $50,000 car loan, the difference between 6.49 per cent and 5.49 per cent equates to approximately $2,700 in total interest saved over the term.

Calculating the Total Cost of EV Ownership

When comparing an EV to a petrol vehicle, it is essential to look beyond the sticker price. EVs are typically cheaper to run on a per-kilometre basis. Charging an EV costs approximately 3 to 5 cents per kilometre (or less with home solar), compared to 12 to 18 cents per kilometre for a petrol vehicle. Over 15,000 kilometres per year, that equates to a fuel saving of approximately $1,500 to $2,000 annually. Servicing costs are also lower for EVs because there are fewer moving parts, no oil changes, and regenerative braking reduces brake wear. The average annual servicing cost for an EV is approximately $300 to $500, compared to $800 to $1,200 for a comparable petrol vehicle. When you factor in the FBT exemption (if salary sacrificing), state incentives, lower running costs, and a green car loan rate, the total cost of owning an EV over five years can be significantly less than a comparable petrol vehicle, despite the higher initial purchase price.

Popular EVs Available in Australia in 2026

The range of EVs available in Australia has expanded dramatically. Entry-level options include the BYD Atto 3 and MG4, both available under $45,000. Mid-range options include the Tesla Model 3, Hyundai Ioniq 5, and Kia EV6. Premium options include the Tesla Model Y, BMW iX1, and Mercedes EQA. The growing competition in the EV market is driving prices down and improving the value proposition. Several manufacturers have reduced pricing in the past 12 months, and this trend is expected to continue through 2026.

Next Steps

If you are considering an EV purchase, start by determining whether salary sacrifice through a novated lease makes sense for your employment situation. This is typically the most cost-effective way to acquire an EV. If salary sacrifice is not available, a green car loan offers the next best financing option with reduced interest rates. Our finance specialists can model the total cost comparison for your specific situation, including applicable incentives, and find the most competitive green car loan rate from our panel of over 50 lenders.