Labor MP representing postcode with high EV take-up denies tax breaks are fuelling popularity amid review

A Federal Labor MP representing a suburb with one of the nation’s highest concentrations of electric vehicles says cheaper running costs rather than tax breaks under review are fuelling their popularity.

Joanne Ryan, the member for Lalor, represents Point Cook in Melbourne’s west which has the third highest number of EV registrations in Australia.

The 1583 registered EVs in this suburb are beaten only by Brisbane (1706) and Kellyville in Sydney’s north west (1586) proving they are popular in both the inner-city and outer suburbs, Australian Automobile Association data shows.

With petrol typically selling for $1.80 a litre, working out at $99 to fill up a medium-sized SUV, EV motorists are finding it more economical to have a car that can be recharged.

“It’s about travel times, the kilometres people travel,” Ms Ryan told The Nightly.

“It’s cheaper than petrol when you’re driving an hour each way.

“It’s an outer suburbs phenomenon so that’s what I assume is happening.”

But she denied the popularity of EVs had anything to do with employers being able to have a fringe benefits tax exemption if they provide an EV to a staff member that’s under the $91,387 luxury car tax threshold.

“Not specifically, no,” she said.

Professionals buying an EV on a novated lease can also claim running costs and financing as a tax deduction.

Ms Ryan’s reluctance to defend Electric Car Discount tax breaks contradicts the opinion of car industry leaders who argue EV sales are only being propped up by tax breaks, as Treasury reviews the future of incentives Labor introduced in July 2022.

“Countries such as Germany, the Netherlands, New Zealand and the United States have seen sharp declines in EV sales when incentives were reduced or removed,” Federal Chamber of Automotive Industries chief executive Tony Weber said.

“In Australia, remaining support mechanisms such as fringe benefits tax concessions are currently under review.

“Any policy changes must recognise the clear relationship between incentives and consumer demand, not just vehicle supply.”

Tax breaks mean EVs make up the vast bulk of cars bought under salary sacrificing.

“Without the tax incentive on electric cars, tens of thousands fewer EVs would be on Australian roads today,” National Automotive Leasing and Salary Packaging Association chief executive Rohan Martin said.

Despite the tax incentives, fully electric cars made up just 8.5 per cent of the market in 2025, with 103,269 sold as 1,209,808 vehicles left the showroom, Federal Chamber of Automotive Industries data showed.

By comparison petrol-electric hybrid vehicles, which aren’t available with a fringe benefits tax exemption, had a 16.5 per cent market share, with 199,133 sold.

Plug-in hybrid electric sales more than doubled to 53,484 units, for a still small 4.4 per cent market share, despite the fringe benefit tax exemption for this category ending on April 1.

The Federal Government is projected to lose $1.35 billion in revenue in 2025-26 from the fringe benefits tax exemption for EVs.

Treasury’s Mid-Year Economic and Fiscal Outlook is forecasting average, annual growth of 29.4 per cent a year over the coming four years.

Treasury is reviewing the continuation of the Electric Car Discount with submissions due by February 6.

Chinese giant BYD was Australia’s biggest selling EV specialist brand in 2025 with 52,415 sold, and was eighth overall, with the all-electric BYD Sealion 7 the fourth most popular car in December.

BYD’s sales last year were almost double Tesla’s tally of 28,856, following a 24.8 per cent decline compared with 2024.