This package of proposals would encourage the uptake of electric vehicles. The proposal consists of
five components.

• Component 1: The introduction of subsidies and tax breaks for the purchase of new light passenger battery electric vehicles, plug‐in hybrid electric vehicles and fuel cell vehicles, in the form of:
  • a - a vehicle registration fee exemption (excluding the compulsory third party insurance premium for up to three years (with grandfathering arrangements so that as long as participants apply before the policy end date, they could receive the full three years of the exemption) and a stamp duty exemption with grants to the states and territories as compensation
  • b - an import tariff exemption (where tariffs have not already been removed)
  • c - a goods and services tax (GST) exemption on the sale of eligible vehicles, with a grant to the states and territories as compensation.
• Component 2: A new fossil fuel car tax on all new light passenger vehicles, except battery electric vehicles, plug‐in hybrid electric vehicles and fuel cell vehicles, equal to 17 per cent of the GST‐inclusive sale price above the luxury car tax (LCT) threshold.
  • The LCT threshold is $66,331 in 2018‐19 and is indexed annually in line with the consumer price index. The fossil fuel car tax threshold would remain pegged to the LCT threshold.
• Component 3: A modification to the LCT fuel efficient vehicle definition from the current seven litres of fuel per 100 kilometres to four litres per 100 kilometres, and a reversal of the 2019‐20 Budget measure Luxury Car Tax – increased refunds for eligible primary producers and tourism operators.
• Component 4: $151 million in capped funding evenly spread over four years from 1 July 2019 for charging infrastructure, with departmental expenses included in the cap.
• Component 5: To achieve the aims of the proposal, there would be a target of full‐electric passenger vehicles sold in Australia of 2 per cent in 2020, 5 per cent in 2021, 10 per cent in 2022, and then a linear target to 100 per cent in 2030 would be implemented. Vehicle manufacturers would face penalties if they do not reach the sales target each year. There would also be a mandated light vehicle emissions standard of 105 grams of carbon dioxide per kilometre by 2022 on the fleet‐wide average of vehicles sold for each manufacturer.

The proposal has a start date of 1 July 2019 and an end date of 30 June 2023 for all components,
except for the reversal of the 2019‐20 Budget measure Luxury Car Tax – increased refunds for eligible
primary producers and tourism operators, and the targets for vehicle sales and emissions standards
which are ongoing.