Business Fleets and EVs: Taxation changes to support home charging from the grid, and affordability

Abstract

This project investigated how tax changes can accelerate the uptake of battery electric vehicles (BEVs) within business fleets by encouraging home charging. The project recommends 17 short‑term and long-term tax changes that can accelerate the uptake of business fleet BEVs and encourage home charging.

Business fleets are an effective pathway for early adoption of BEVs but the availability of workplace charging infrastructure is low. Businesses will not invest in workplace charging infrastructure when fleet managers are not choosing BEVs. Fleet managers decide which vehicles to purchase on a range of criteria including Total Cost of Ownership (TCO). Currently there is a wide cost gap between the BEV and an equivalent internal combustion engine vehicle (ICEV), meaning BEVs are not cost competitive.

Some countries, like Norway and the Netherlands, address this capital cost gap through a combination of reform to taxation policy and tax rates; government subsidies and rebates; and regulation. In many overseas jurisdictions, business fleets are the major buyers of BEVs. In Australia, businesses account for around 40% of light vehicle sales. However, EV sales to business fleets comprised a mere 488 vehicles in 2020, or 0.08% of business sales of passenger and light SUV sales.1

The project’s findings suggest that federal taxation laws for cars can be a cost disincentive for the uptake of BEVS in business fleets. Findings also indicate that there are very few BEVs available in Australia which are ‘fit for purpose’.

A 2020 business fleet survey indicated home charging would need to be considered because “over 47% (34,688 fleet vehicles) of passenger car and SUV business fleets are home garaged.”2 In another 2020 survey, 86% of respondents regarded home charging as the “top priority” highlighting the importance of “convenient access” to charging infrastructure which will influence consumers’ attitudes towards electric vehicle purchases.3 This project acknowledges that home charging business fleet BEVs has been disregarded, which is problematic when it is the key source of charging for most BEVs.4