The electric vehicle (EV) industry and environmental groups have penned a joint letter attacking the Victorian Government’s proposed EV tax, which will levy a 2.5 cent per kilometre charge on EVs and a 2.0 cent charge on hybrid electric vehicles:
“Every other state and territory in Australia has ruled out or delayed plans for a premature new tax on electric vehicles,” the open letter said.
“Going it alone will mean Victoria has the worst electric vehicle policy in the world”…
“This new tax means the world’s manufacturers are far less likely to send Victorians their best, most affordable, zero-emissions vehicles,” the letter said.
“This makes things much harder for Victorian families who want to buy and drive electric.”
However, Adrian Dwyer – the chief executive of Infrastructure Partnerships Australia – has backed the EV tax, claiming Victoria’s proposal would help address a long-term problem in the way roads are paid for.
My view is that the proposed EV tax is a bargain compared to the 42.7 cents per litre in excise paid by conventional motorists using petrol and diesel vehicles.
Even after these EV charges, conventional motorists will contribute far more towards road cost recovery than their EV counterparts.
Allowing EV owners to use the road system without paying tax would also be highly regressive, since wealthier people tend to purchase EVs.
The bigger long-term issue is that fuel excise receipts are already declining as people shift to more fuel efficient vehicles:
The move to more efficient conventional vehicles has already lowered fuel excise receipts.
This decline in revenue will only accelerate as more people switch to EVs:
Electric vehicle sales are predicted to boom in Australia over the next 20 years.
This tax revenue must be replaced, and it is only fair that EV owners pay their fair share, especially given they are typically higher-income earners.
However, taxing EVs is a stop-gap measure, and governments will over the longer-term need to shift to full direct road user charges – something the Electric Vehicle Council (EVC) believes is “inevitable”:
The EV industry accepts that a road user charge is inevitable as the car fleets transition to electric, but argue it should be introduced fairly and evenly.
The EVC should be careful what it wishes for. If direct road user pricing comes into effect and fully recovers the cost of road provision and maintenance, then EV owners will pay way more than 2.5c a kilometre.
The EV industry and environmental groups should suck it up and stop whining.
