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Industry welcomes EV tax break changes, Polestar pushes back

Inside Line

Volume brands and the novated lease industry have called the three-phase FBT wind-back sensible. Polestar disagrees, branding the changes premature and revealing what Treasury told OEMs to do about the new $75,000 cap.

Mike Sinclair
9 May 2026 · 6 min read

Treasurer Jim Chalmers and Energy Minister Chris Bowen confirmed on Tuesday, May 5, a three-phase taper of FBT-based EV purchase incentives, with Treasury expecting to deliver $1.7 billion in savings over five years. The full FBT exemption remains in effect until March 31, 2027. From April 2027, a $75,000 cap kicks in, with vehicles above that line dropping to a 25 percent discount on payable FBT. From April 2029, the discount lands at a flat 25 percent for all eligible EVs below the LCT threshold. Existing leases are grandfathered.

Consensus and certainty

TheAutoExec polled a number of new-car brands and key novated-lease stakeholders for their respective takes on the changes. The word that surfaces in nearly every industry response is the same.

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Mike Sinclair
Mike Sinclair
Partner and Principal Columnist, TheAutoExec Network

Mike Sinclair is an equity partner and Principal Columnist for TheAutoExec Network. Mike has been testing and writing about cars, motorcycles and more for over 30 years. He was a key executive team member when ACP Media and Carsales formed Australia's leading automotive, industrial, marine and motorcycle online network in the 2000s, and the driving force behind the launch of motoring.com.au. For two decades, Mike led the large multimedia and editorial team at Carsales, and all PR and corporate communications. With significant exposure to both OEM and dealership disciplines, Mike now consults with a number of key brands on a range of automotive and powersports opportunities.

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