Albanese Government Reviews EV Subsidies for Savings

Social Services Minister Tanya Plibersek confirmed electric vehicle incentives are under consideration as cabinet reviews all government spending.

Updated on Nov. 12, 2026 in Electric Vehicles

Bold flat-color editorial illustration showing a row of identical electric car silhouettes beside a single charging post, evoking a government review of EV tax incentives. — The Albanese government is reviewing scaling back fringe benefits tax exemptions for electric vehicles as cabinet examines $180bn in claimed savings. AI Illustration. Upload story photo >

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Should the federal government keep subsidising electric vehicles?

The Albanese government has examined scaling back electric vehicle subsidies as part of a broader review of spending. Social Services Minister Tanya Plibersek confirmed on Thursday that EV incentives are under consideration.

Why it matters

The review comes as the government claims $180bn in savings since taking office and seeks further savings ahead of the mid-year economic update. Shadow energy minister Dan Tehan has argued taxpayers have paid $3 billion subsidising foreign-made electric vehicles.

The government claims $180bn in savings since taking office and $60bn in the last Budget, while Tehan claims taxpayers have paid $3 billion subsidising foreign-made EVs. The full fringe benefits tax exemption for cheaper EV models is retained until April 2029.

The players

Albanese government

The Australian Labor government led by Prime Minister Anthony Albanese, which is reviewing spending and EV incentives.

Tanya Plibersek

Australia's Social Services Minister, who confirmed the EV incentives were under consideration.

Dan Tehan

Shadow energy minister in the Australian opposition, who has criticised the cost of EV subsidies.

Malcolm Turnbull

Former Australian prime minister who has urged Labor to means test or scrap EV and home battery subsidies.

Jim Chalmers

Australian Treasurer leading the search for savings ahead of the mid-year economic update.

The details

The scheme exempts eligible electric vehicles provided to employees from fringe benefits tax, allowing workers to make payments from their pre-tax salary through novated leases. The government has also announced legislation to reduce the benefit for more expensive electric vehicles. Former prime minister Malcolm Turnbull has urged Labor to means test or scrap EV and home battery subsidies.

12 November 2026: Plibersek confirmed EV incentives were under consideration.
April 2029: The full fringe benefits tax exemption for cheaper EVs ends.

Roadmap

The review revisits the novated lease fringe benefits tax exemption for electric vehicles, a policy that has shaped how Australians lease EVs through their employers. Pressure to means test or scrap the scheme follows the government's move to reduce the benefit for more expensive models.

Employees who lease electric vehicles through novated leases may see changes to the fringe benefits tax benefit for more expensive models. Cheaper EV models retain the full exemption until April 2029.

The takeaway

Australians considering a novated electric vehicle lease should watch for changes to the fringe benefits tax benefit as the government's spending review progresses. The final outcome will determine how much the scheme costs taxpayers and who benefits from it.