Are Labor's EV and battery subsidies mostly helping the well-off?

Take a $50,000 electric car on a novated lease, where your employer pays for it from your pre-tax salary.

A worker on the 32% tax rate saves about $3,200 a year. A worker on the top 47% rate saves about $4,700 on the same car. That gap comes from Treasury's own review of the scheme, published this year.

On 2 November the government brushed off calls to means-test its electric car and home battery schemes. Jim Chalmers is hunting for savings before his mid-year budget update.

The Coalition has promised to scrap both as part of a $9.4 billion package of climate cuts. Together the two schemes run to billions of dollars a year. So who is actually cashing in?

Mostly people with higher incomes and their own roof. The electric car discount pays more the more you earn, and the battery rebate is out of reach for most of the three in ten households who rent. Confidence: Likely. Three parts to this: the car, the battery and the fix.

The "electric car discount" exempts eligible EVs from fringe benefits tax (FBT), the tax on perks like a work car. Because the saving flows through income tax, it grows with your tax bracket. Treasury calls this "vertical inequity", meaning people on higher incomes get more help for the same purchase.

Buyers skew well-off too. Treasury cites Magenta Advisory data showing about 48% of EV buyers earn over $150,000, against 35% of all drivers. ATO figures obtained by the AFR, reported by Zecar, put nearly a third of users above $190,000.

The cost also ran far past forecast. Griffith University tax researcher Anna Mortimore noted in 2024 that it was projected to cost $205 million. It reached $2 billion in its first three years and is tipped to hit $2.8 billion in 2028-29.

Yet Treasury's best estimate is that it caused about 64,000 extra battery-electric sales, and even that figure is not statistically certain. It is also generous by world standards. Treasury puts it at $12,800 to $18,800 over a four-year lease, against typical subsidies of $5,000 to $10,000 in Europe, North America and New Zealand.

The Cheaper Home Batteries Program takes about 30% off a home battery. Canberra buys the certificates directly, so the cost lands on taxpayers, not power bills. Since July 2025, more than 507,000 households have signed up, and the budget has grown from $2.3 billion to $7.2 billion.

There is no income test, but there is a roof test. You need a house with solar, and 30.6% of homes are rented. Climate Energy Finance director Tim Buckley put it bluntly to AAP: most younger Australians either rent or live in apartments.

Income still shows up. Thomas Longden of Western Sydney University and Debasish Das of UNSW found the richest high-solar city postcodes had 912 more installations each than middle postcodes. That is 3.6% more households with a battery, though their paper is not yet peer reviewed.

Early buyers also grabbed big systems, with the average battery jumping from 19.5 kWh to 26.8 kWh in one quarter, Clean Energy Regulator data shows.

The government's case is that this is a suburban story, not a leafy one. Speaking about the battery boom in August, Anthony Albanese said: "Mainly, it's an outer suburban, regional story." Chris Bowen named seats like Hume, Greenway and Mayo.

The car data backs part of that. The leasing industry body NALSPA found the top postcodes for EV leases were Tarneit, Werribee and Kellyville, not Toorak. Treasury also notes strong take-up in outer suburbs.

That much holds: plenty of middle-income families in growth suburbs use both schemes. But NALSPA ranked raw counts, not shares, and big growth suburbs have lots of households. And in any suburb, the owner can get a battery while the renter next door cannot.

Non-owners do get something back. AEMO reported wholesale prices fell 12% in the March quarter as batteries shifted solar into the evening. Most of that came from big grid batteries, though, not the ones in garages.

The car discount is being trimmed. From 1 April 2027, only EVs under $75,000 keep the full exemption, and from April 2029 every EV drops to a 25% discount. The budget expects to save $1.7 billion over four years.

The battery rebate shrinks too. Since May, bigger systems earn a smaller discount per kilowatt hour, and the rate steps down every six months to 2030. A strict means test would cut costs further, but it would also slow the batteries the grid wants.

Nobody has published income data for battery buyers, only postcode data. The verdict on batteries rests on the assumption that home ownership and income travel together, which ABS data broadly supports.

Both schemes tilt towards higher earners with their own roofs, and renters pay their share of the cost while getting the least back. Confidence: Likely. Homeowners in the outer suburbs win too. Renters, apartment dwellers and anyone without salary packaging lose out.

Eighteen sources: a Treasury statutory review, ABS Census data, Clean Energy Regulator data, an Australian Tax Review paper, a working paper on battery postcodes, AEMO market data via RenewEconomy, industry data and news reports. We could not verify the ATO income figures directly; they come from an FOI release reported by the AFR and Zecar. Our maths: $4,700 is 47% more than $3,200. Researched with AI tools; checked and edited by VOID.

The electric car tax break gives bigger savings to people on bigger salaries, and it is already being cut back from 2027. The home battery rebate has no income test, but you need your own roof and solar, so most renters miss out. Everyone pays for both through the budget, and only the battery side sends a little back to non-owners through cheaper wholesale power.