Employers looking for their next company car may be enticed to go electric should a new bill to exempt EVs from paying Fringe Benefit Tax (FBT) for five years be passed.
The Income Tax (Clean Transport FBT Exclusions) Amendment Bill was pulled from a Green Party members’ ballot and introduced to Parliament on Thursday this week and will subsequently be debated by Cabinet.
“This Bill is an opportunity for the Government to address a glaring hole in its plan to electrify the vehicle fleet and meet their own commitment to reducing carbon emissions,” says Green Party Transport spokesperson Julie Anne Genter.
It is hoped that more businesses around New Zealand will be incentivised to purchase new electric vehicles if the Bill is enacted.
Local not-for-profit organisation Drive Electric has long been a supporter of an FBT exemption, as it hopes the incentive would revitalise EV uptake following the removal of the Clean Car Discount at the end of last year.
In January 2024, electric car sales plummeted to just three per cent of all new vehicles according to data from the Motor Industry Association (MIA), ten per cent less than the same month last year. At this rate, Drive Electric reckons we could have between 100,000 and 350,000 fewer EVs on our roads by 2030.
However, an FBT exemption would help reduce these numbers, especially when you consider around 60 per cent of new vehicles are purchased by businesses in New Zealand.
There are benefits for consumers too, as most vehicles bought by businesses are sold secondhand after about two to five years, making electric cars more affordable.
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