If you’re looking to spot an electric car, New South Wales (NSW) is the prime location in Australia. The number of registered electric vehicles in NSW has more than doubled in the past year, surpassing any other state.

However, purchasing an electric car in NSW may soon become less appealing.

NSW Premier Chris Minns has proposed eliminating the $3,000 rebate on new electric vehicles up to $68,750. NSW is considering abolishing rebates in response to a treasury report. The treasury suggests that the rebate and stamp duty incentives drive up demand in a market with limited supply, thus raising car prices.

Experts in the industry argue that there is insufficient evidence to support this claim. They also assert that removing support for electric car adoption may hamper progress and put the state at a disadvantage.

NSW is one of four states that offer direct rebates on certain electric car models. Additional incentives in Australia include exemptions on stamp duty, zero-interest loans, and registration discounts.

The CEO of the Electric Vehicle Council, Behyad Jafari, highlights the significant impact these incentives have had on the market. As of July, there were nearly 130,000 electric cars on the road in Australia, representing 8.4% of new car purchases in the first half of the year. This was up from just 3.8% in 2022.

Moreover, Jafari notes that the rebates have been most beneficial to low-income families.

Data reveals a 117% year-on-year increase in registered electric cars in NSW, totalling over 23,000 in the year up to January 31.

According to Audrey Quicke from the Smart Energy Council, the potential removal of NSW’s rebate in the upcoming state budget could provoke a negative response from many drivers. In an interview with The Driven, Quicke emphasized that now is not the appropriate time to withdraw support for electric vehicles. “Transport emissions are high and rising, petrol prices are hitting record highs, and governments should be doing all they can to support the switch to electric cars,” she said.

However, premiers in other states appear to be in agreement with Chris Minns. Victoria has already reduced its electric vehicle subsidy, and Tasmania is reviewing incentives since a stamp duty exemption expired in May.

Michael Day, the Treasurer of the Australian Electric Vehicle Association, emphasizes the necessity for consistent policies across all states and territories to provide stability for the automotive industry and confidence for consumers. Day disputes the NSW treasury’s claim that electric vehicle prices have risen. He says that prices have actually fallen in the past year across all states, citing price drops in Teslas as evidence.

If NSW scraps electric vehicle subsidies for these vehicles due to pricing concerns, the Australian Electric Vehicle Association suggests redirecting the funds to support other electric vehicle incentives, such as expanding charging infrastructure. The Association emphasizes the importance of maintaining support for electrification, rather than withdrawing funding and abandoning the cause.