One Australian state junks $3000 electric car discount

The cost-cutting measure will put the state behind Queensland, NSW, SA and WA in electric vehicle incentives.

It also comes as the Andrews government awaits the outcome of a High Court challenge to its tax on electric vehicles - the first of its kind in Australia.

Industry experts said the move would put an unfair financial burden on Victorians, which could impact efforts to cut transport pollution.

The Victorian government cut financial support for its Zero-Emission Vehicle Subsidy in its May budget, revealing the $3000 rebate on new electric vehicles under $68,740 would end on June 30.

The scheme was launched in 2021 to subsidise 20,000 electric vehicles and was not due to end until May 2024.

A government spokeswoman told AAP the subsidy had already helped the state move closer to its emissions reduction goal.

"We've laid the groundwork to achieve our target of 50 per cent of all light vehicle sales being (zero-emission vehicles) by 2030," she said.

The government has also committed to spending $19 million on more electric vehicle charging stations in regional areas, she said.

But Greens transport spokeswoman Katherine Copsey said cutting the vehicle subsidy was a backward step that would compound the effect of the state's electric vehicle user tax.

"Victorian Labor's electric vehicle policy was already the world's worst and somehow it just got worse," she said.

"It's disappointing that this government continues to punish Victorians who want to reduce their emissions and boost climate-friendly transport."

Opposition climate change spokesman James Newbury said scrapping the scheme would mean the state falling short of its 2030 emissions target as only 6.6 per cent of new light vehicles sold in Victoria were electric.

"The Labor government is overseeing the worst electric vehicle take-up in the country and has cut incentive programs because they have run out of money," he said.

Electric Vehicle Council chief executive Behyad Jafari said Victorian electric car owners were already paying an average of $1600 a year as part of the state's road user tax and the new cuts would be a further disincentive to replace a petrol or diesel vehicle.

"If you're a Victorian who is looking to decarbonise transport, you must be looking at every other state and territory in the country, knowing they are better off than you," he said.

"Not only are you not receiving a subsidy but you're paying a tax no one else is paying either."

Mr Jafari said the subsidy's removal could impact electric vehicle sales in Victoria despite the launch of the National Electric Vehicle Strategy and federal government changes to fringe benefits tax.

The removal of Victoria's electric car rebate will put it behind four major Australian states for incentives, including Queensland which increased its means-tested subsidy to $6000, WA which offers a $3500 rebate, and NSW and SA which offer $3000 subsidies.

The ACT instead offers zero-interest loans on electric vehicles. Tasmania offers a stamp duty exemption and the NT offers discounts on electric vehicle stamp duty and registration.

Victorian electric vehicle buyers will still be able to claim a $500 registration discount over five years.

Australian Associated Press