Australia's Labor government has announced it will extend its electric vehicle fringe benefits tax (FBT) exemption — which waives a tax typically applied to employer-provided vehicles, saving employees thousands of dollars on EV leases — for another year in full, before gradually narrowing the benefit over the following two phases through to 2029. From April 2027, the full exemption will apply only to EVs priced under A$75,000, with pricier models below the luxury car tax threshold receiving a reduced 25% discount, a structure the government says is designed to push manufacturers to offer more affordable options in the Australian market. The policy extension comes as fuel prices have surged following the closure of the Strait of Hormuz during the Iran conflict, driving EV sales to 15% of new car purchases in March — double the share from a year earlier — though the scheme's cost has ballooned from an original A$605 million projection to an estimated A$10.1 billion over seven years.