Electric and hybrid car owners in Victoria are beginning the year with some unwelcome news. The state government has officially scrapped its annual registration discount for low-emission vehicles, ending one of the few financial perks still available to greener drivers.
The End of a Small but Symbolic Perk
From January 1, 2026, the $100 annual registration discount for electric and plug-in hybrid vehicles has been removed. The decision affects thousands of Victorians who made the switch to cleaner cars in recent years, partly encouraged by incentives like this one, explains Drive.
The change means that EV and hybrid owners will now pay roughly the same registration costs as petrol and diesel vehicles — around $865 per year for private passenger cars. The Victorian government says the update is part of a broader effort to standardise vehicle registration fees and bring state policies in line with the rest of Australia.
While the rebate itself was relatively modest, many drivers saw it as a gesture of recognition — a way of rewarding early adopters who took a chance on cleaner transport before it became mainstream. Its removal has sparked frustration across social media and in automotive circles.
A Step Backward for Electric Vehicle Adoption?
Industry groups argue the move sends the wrong message at a crucial time for the country’s electric vehicle transition. With adoption rates still lagging behind Europe and parts of Asia, critics say every bit of financial encouragement counts.
The Federal Chamber of Automotive Industries (FCAI) noted that removing even minor incentives risks slowing momentum. Affordability remains one of the biggest barriers to EV ownership in Australia, and small savings can help offset higher upfront costs.
This latest decision follows a string of mixed messages from Victoria regarding electric transport policy. In 2021, the state introduced a controversial road-user charge for EVs and plug-in hybrids — a policy that required drivers to pay per kilometre travelled. The measure was later overturned by the High Court in 2023, but it left many owners wary of further changes.
The Bigger Picture Across Australia
While Victoria is tightening its approach, other states are still offering more generous incentives. New South Wales and Queensland continue to provide rebates and stamp duty exemptions for new electric vehicle purchases, though both have announced plans to scale them back as sales rise.
At the federal level, tax exemptions and fringe benefits discounts remain in place, particularly for fleet and company car purchases — a key driver of the EV market’s growth.
What It Means for Victorian Drivers
For most owners, losing the discount won’t make or break their budgets. But symbolically, it marks another step away from proactive electric vehicle policy in Victoria. Many see it as part of a broader trend: governments reducing support as EVs become more common, even though the market hasn’t yet reached full maturity.
Still, the momentum toward cleaner transport continues. More affordable electric models are expected in Australian showrooms this year, and national sales have already doubled compared to two years ago.
Even without the $100 discount, the future for electric driving remains bright — just a little less so in Victoria for now.
