Australians have re-elected a Labor government for a second term, showing strong support for the party’s promises during a time when cost-of-living pressures continue to hit hard. And for motorists, this result brings a lot to unpack — from electric vehicle incentives and fuel efficiency laws, to cheaper solar batteries and even talk of scrapping the luxury car tax.
First up, Labor’s already enacted the New Vehicle Efficiency Standard (NVES), which officially kicked off on January 1 this year. It puts pressure on car manufacturers to sell more fuel-efficient and low-emission vehicles — like EVs and hybrids — by setting annual emissions targets across their fleet. Car makers who miss the mark cop a $100 fine per gram of CO₂ over their limit, per vehicle. It’s a bold step forward for lowering emissions, but it may also push prices up for high-emission models like diesel utes and big V8s, or see those models dropped entirely. Labor has made it clear this policy isn’t going anywhere.
Another big-ticket policy is the fringe benefits tax exemption on electric vehicles, which has been in place since 2022. It’s helped boost EV and plug-in hybrid (PHEV) sales, with roughly 100,000 Australians taking advantage over the past few years. While the exemption for PHEVs is ending in March 2025, fully electric cars will continue to benefit, helping working families in the suburbs make the switch to lower-cost, lower-emission transport.
From July 1 this year, Labor is also offering households a 30% discount on solar-charged home batteries — up to $4000 off the typical cost. This stacks on top of state-based incentives like interest-free loans in Victoria and up to $2400 in NSW. It’s part of a $2.3 billion commitment to help families cut their power bills and move toward cleaner energy at home.
While not officially part of Labor’s election promises, there’s also serious talk about scrapping the $5.2 billion luxury car tax (LCT). The LCT currently hits buyers with a 33% tax on the portion of a car’s cost above a certain threshold — $80,567 for most cars, or $91,387 for fuel-efficient models. Removing it could help secure a free-trade agreement with Europe and potentially lower prices for higher-end EVs and imports.
Another issue waiting for attention is how we pay for roads in a future dominated by electric cars. Since EVs don’t pay fuel excise tax, there’s a growing need for a new, fair road-user charging model. Victoria tried to roll out its own per-kilometre charge for EVs in 2022, but it was overturned by the High Court as unconstitutional. Since then, the ball’s been in the Federal Government’s court — but no moves have been made yet.
One exciting development on the horizon is bidirectional charging, which allows electric cars to power homes or even feed energy back to the grid. This includes tech like V2G (vehicle-to-grid), V2H (vehicle-to-home), and V2L (vehicle-to-load). South Australia’s leading the charge, with other states expected to follow now that Australian standards have been updated. We could see V2G chargers approved and certified by July 2025, meaning Australians may soon be able to use their cars as energy storage to help power their homes or reduce strain on the grid.
However, there are still a few big gaps that need addressing. One is the urgent need for more skilled workers. The automotive industry is already short on technicians, and the shift toward EVs will only widen that gap. Industry leaders are calling for stronger support for apprenticeships, better training programs, and faster rollout of funding to get new techs up to speed on EV systems.
Finally, the sector is also pushing for a national End-of-Life Vehicle (ELV) program. The goal is to support environmentally responsible vehicle recycling and disposal, and to shift the industry toward a circular economy.
Labor’s win signals continued momentum for low- and zero-emissions vehicles, smarter energy use, and industry reform. But it’ll take close collaboration with the auto sector to deliver on these big promises, support businesses through the transition, and keep costs down for Aussie motorists.
