Australia’s Federal Chamber of Automotive Industries is urging Canberra to maintain demand-side incentives for electric vehicles, warning that supply-side regulation alone won’t deliver the transition.
The FCAI need only look across the Tasman for proof.
New Zealand’s Clean Car Discount, introduced in 2022, helped push BEV market share beyond 25% by late 2023. Then the incoming government scrapped it overnight.
The result was swift and brutal — BEV share collapsed to just 5.6% in 2025. It remains one of the starkest examples globally of what happens when you pull the rug from under a nascent market.
But New Zealand also offers a cautionary tale about what not to do.
The feebate scheme penalised buyers of higher-emitting vehicles while rewarding EV purchases, distorting the market and drawing widespread consumer backlash. It was politically unsustainable precisely because it tried to do too much, too fast.
The lesson for Australia is clear: well- designed, stable incentives work.
Abrupt policy reversals destroy consumer confidence. And heavy- handed market manipulation breeds resentment.
The FCAI is right that the FBT exemption alone is too narrow.
Australia needs broader, more accessible demand-side support — but it must be durable, equitable, and designed with an exit ramp. New Zealand showed us what happens without one.
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