Many Australians only choose electric cars because of generous tax incentives, a salary packaging group says, as the Federal Government comes under political pressure to scale back subsidies projected to cost more than $23 billion over the coming decade.

Working Australians salary sacrificing to drive EVs on novated leases can claim running costs and finance as tax deductions, a policy being reviewed by mid-2027. The number of electric cars bought with tax breaks during the past three years far exceeded Treasury predictions.

The Electric Car Discount policy was meant to cater for 4700 recipients but since Labor’s policy debuted in July 2022, 109,000 EVs have been bought through salary sacrificing.

While fully electric cars only have an 8 per cent market share, novated leases make up 45

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