The Motor Trades Association of Australia (MTAA) has welcomed the Albanese Government's announcement of a phased approach to the Electric Car Discount, saying the decision reflects the kind of stable, predictable policy transition the automotive sector needs.
The Government today announced the existing FBT exemption for electric vehicles will continue in full until March 2027. From April 2027, the exemption will be targeted to vehicles priced under $75,000, with higher-priced eligible EVs receiving a 25% FBT discount. From April 2029, all eligible EVs below the luxury car tax threshold will transition to a permanent 25% FBT discount.
MTAA Interim Executive Director Peter Jones said the phased approach strikes the right balance between fiscal responsibility and supporting the sector’s transition to a low-emissions future.
"MTAA has consistently called for policy stability and a managed transition, and today’s announcement delivers exactly that," Mr Jones said.
"Abrupt changes to incentive settings would have undermined investment confidence across the automotive trades, particularly for small and regional businesses already managing the cost of upgrading workshops, training technicians and meeting new safety requirements for high voltage vehicles.
"The phased model provides certainty for businesses to plan ahead, while keeping more affordable EVs within reach of everyday Australians through salary packaging and novated leasing."
Mr Jones said the announcement also reinforced the need to match vehicle incentives with investment in workforce capability.
"The skills gap in our sector is real and it is growing. As more electric vehicles enter the fleet, demand for qualified technicians is outpacing supply, particularly in regional areas where access to training is more limited," he said.
“We are calling on the Government to restore apprentice and employer incentives to previous levels and pair this policy with practical support for workshop capability.
“The reduction in apprenticeship incentives from January 2026 is already impacting employers’ ability to take on and retain apprentices at a time of acute skills shortage. For many small businesses, the numbers no longer stack up.
“Restoring these incentives is critical to rebuilding the pipeline, particularly as the transition to electric vehicles increases the technical complexity of the trade.
“At the same time, workshops are facing significant upfront costs to participate in the EV transition, including investment in high voltage tooling, safety equipment and training. Without targeted support, this becomes a real barrier for small businesses.”
Mr Jones said MTAA also welcomed the Government’s focus on encouraging more affordable EV models, noting that a broader, more accessible market ultimately benefits the entire automotive ecosystem.
“We look forward to working with the Government to ensure vehicle incentive policy is matched with investment in apprenticeships and workshop capability, so the service sector can keep pace with Australia’s evolving vehicle fleet,” Mr Jones said.
ENDS
Media contact
Andrew Molloy
Manager Marketing & Communications
Victorian Automotive Chamber of Commerce
P: 03 9829 1248 | M: 0457 188 375
E: amolloy@vacc.com.au
