The Federal Government’s 2026–27 Budget has introduced a series of measures affecting Australia’s automotive sector, including EV tax changes, dealership electrification funding, and stronger consumer protection enforcement, as the industry navigates rising operating costs and slowing economic growth.
Delivered amid geopolitical tensions, disrupted oil supplies, and broader economic uncertainty, the Budget focuses on what the Government describes as “Resilience and Reform” while preparing industries for longer-term structural change tied to electrification and shifting global supply chains.
DRIVEN EV program extended
One of the key automotive measures announced in the Budget is a one-year extension of the Dealership and Repairer Initiative for Vehicle Electrification Nationally (DRIVEN) program through to 2029.
The program supports dealerships and repairers investing in EV infrastructure, technician training, and facility upgrades as Australia’s automotive market continues shifting towards electrification.
Industry body Australian Automotive Dealer Association (AADA) said the extension provides ongoing support for retailers adapting to changing vehicle technologies and regulatory requirements.
Changes confirmed for EV tax incentives
The Government has also confirmed upcoming changes to electric vehicle Fringe Benefits Tax (FBT) concessions.
Under the revised model, the current full exemption for eligible EVs will transition to a permanent 25 per cent discount structure from April 1, 2029.
The change is expected to affect novated lease pricing and broader EV affordability calculations for some buyers and fleet operators over the longer term.
The AADA said the revised structure provides greater long-term certainty while maintaining support for EV adoption.
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ACCC enforcement funding included
The Budget also allocates $9 million towards strengthening enforcement capability within the Australian Competition and Consumer Commission (ACCC).
According to the Government, the funding will support reforms relating to unfair trading practices, consumer guarantee protections, and supplier indemnification measures.
The measures are expected to have implications for franchised dealerships and manufacturer relationships across the automotive retail sector.
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NVES and operating costs remain industry concerns
The Budget arrives as dealers and automotive businesses continue adjusting to the New Vehicle Efficiency Standard (NVES), increasing electrification costs, and growing competition across the market.
Broader business measures announced in the Budget include reforms tied to capital gains tax, negative gearing, discretionary trust taxation, and new loss carry-back provisions for eligible businesses.
The AADA said economic conditions, business confidence, and regulatory stability will remain major issues for automotive retailers over the next 12 months.
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