Photo: Car Advice

The government of New South Wales in Australia will remove stamp duty on electric vehicles to boost their popularity. In addition, electric vehicle drivers will be offered various incentives as part of an ambitious plan for battery-powered vehicles to account for more than half of all new car sales by 2031.

The $500 million plan to be announced in the state budget this week is five times larger than the plan recently announced by another Australian state, Victoria, according to The Sydney Morning Herald. It will include significant spending on charging infrastructure along the state's highways.

However, electric vehicle drivers will face a road user tax for six years. The move was taken to fund road and infrastructure costs to offset the loss of revenue from fuel excise taxes. The fee will be 2.5 cents per kilometer by 2027, or once EVs account for 30% of new car sales, whichever comes first. They currently account for less than 1% of new car sales in New South Wales.

The state is committed to meeting Norway's targets for the number of electric vehicles on the road. “We’re charging up the nation to make NSW the Norway of Australia when it comes to electric vehicles,” said Environment Minister Matt Kean.

Stamp duty will be removed from electric vehicles under $78,000 by September 2021. Also, the first 25,000 electric vehicle buyers will receive a $3,000 rebate on vehicles sold in NSW for under $68,000. Following the introduction of the tax, stamp duty will be abolished for all electric vehicles and plug-in hybrids.

“Our comprehensive strategy is about making sure we have the right mix in place to incentivize the take-up of electric vehicles while ensuring everyone who drives on our roads contributes to funding and maintaining them,” said NSW Treasurer Dominic Perrottet.

Transport Minister Andrew Constance, who criticized the government for imposing charges on electric vehicle owners, said the new plan overall was well balanced. “We have to make sure we have the policies in place to give industry the green light to increase model availability and cut entry price points,” he said.

The government's strategy is to make New South Wales the most affordable state in Australia to own an electric car. In addition, owners of electric vehicles will receive various parking privileges. Furthermore, the strategy identified the potential for future expansion of the state's mining operations required for battery production.

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