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Electric Car Discount Bill will motivate businesses to buy EVs



In July the Albanese Government introduced the ‘Electric Car Discount Bill’ to parliament, intending to remove fringe benefits tax (FBT) from electric vehicles to give more Australians access to battery-operated, hydrogen fuelled and plug-in hybrid cars. New research has revealed the Bill’s popularity among businesses – mostly SMEs – with 40 per cent indicating they would purchase an electric vehicle by the end of 2023 if the Bill passes.

The finding was derived from a survey of an independent panel of 210 Australian SME owners and decision makers, commissioned by Small Business Loans Australia, a comparison website helping business owners find the best financing and loan options in Australia. The respondents comprised 44 per cent of micro businesses (1-10 employees), 27 per cent of small businesses (11-50 employees) and 18 per cent of medium-sized businesses (51-200 employees) and 11 per cent of businesses with over 200 employees. The full survey results, including breakdowns across business sizes and States, can be found here: https://smallbusinessloansaustralia.com/resources/electric-vehicles.html. 

To meet its 2050 net-zero target, Australia will need a dramatic shift towards electric vehicle ownership. Ingrid Burfurd from the Grattan Institute specified that, as cars are on the road for an average of 15 years, Australians must purchase almost entirely electric vehicles by 2035.[1]

Fortunately, the Small Business Loans Australia survey shows that most business owners and senior decision makers are happy to make the shift sooner. If the Electric Car Discount Bill passes, 66 per cent of businesses would be incentivised to purchase an electric vehicle. While just 9 per cent would be ready to purchase this year, the bulk of purchases – 31 per cent – would be in 2023. Eleven (11) per cent would acquire an electric vehicle in 2024, and 15 per cent from 2025 onwards. Only 34 per cent of business owners would not invest in electric vehicles, regardless of the Bill’s introduction.

Small Business Loans Australia analysed responses across the States. Victorian businesses are more likely to buy an electric vehicle at some point if the Bill passes, chosen by 71 per cent of Victorian respondents. This is followed by 68 per cent of NSW businesses and 67 per cent in South Australia. Businesses in Western Australia and Queensland are least likely to invest in electric vehicles, with just 62 per cent and 58 per cent, respectively, choosing to switch if the Bill passes.

Across business sizes, Small Business Loans Australia found that small businesses (11-50 employees) are most likely to purchase an electric vehicle by the end of 2023: 57 per cent of small businesses specified they would, followed by 45 per cent of medium businesses and just 21 per cent of micro businesses.

Small Business Loans Australia sought to find out whether businesses would seek financing for these purchases in a climate of rising interest rates. The Electric Car Discount Bill offers significant price cuts; however it is applicable only to vehicles with an original sale price below the luxury car tax threshold ($84,916 for 2022-23). A model provided by an employer valued at about $50,000, would save the employer up to $9000 a year through the fringe benefits tax exemption.[2]

The survey found that despite the savings introduced by the bill, 63 per cent of business owners would seeking financing. The larger the business, the more likely they are to finance an electric vehicle, with 69 per cent of medium sized SMEs believing that is the best option in an environment of rising interest rates. This was closely followed by 65 per cent of small businesses and 54 per cent of micro businesses. 

Alon Rajic, Founder and Managing Director of Small Business Loans Australia, says: “The Federal Government understands that the price of electric vehicles has been a major barrier to their adoption in Australia. Our research suggests that the removal of this barrier will have an enormous positive influence on business purchase decisions. It also indicates that Australian business owners support realistic Government efforts to achieving net-zero emissions – so much so, that they would get financing on their vehicles in a climate of fast-rising interest rates.” 

“Businesses would be wise to research loans options thoroughly – including through free comparison websites – to ensure they have secured the lowest-risk, low-rate and most suitable loan.” 

The full survey results, including breakdowns across business sizes and States, can be found here: https://smallbusinessloansaustralia.com/resources/electric-vehicles.html

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