• Victoria, NSW and South Australia are planning new road user taxes for EV owners
  • ‘What matters is perception, even if the tax is only a few hundred dollars per year’
  • New EV taxes run counter to government pledges to achieve net zero carbon targets


A push by governments in New South Wales, South Australia and Victoria to slap new EV taxes on owners of electric vehicles has left voters confused about their stance on reducing greenhouse gases.

Victoria became the latest state government to consider a tax on EVs at a rate of 2.5c per km following South Australia and NSW.

Forecasts suggest Victoria’s EV tax could raise $30m per year starting from its expected introduction in 2021.

State governments said it appeared unfair to petrol and diesel car owners who pay fuel taxes that EV owners escape this burden.

The Electric Vehicle Council (EVC) said state governments face a clear-cut choice between implementing new taxes on EVs or cutting pollution.

“State governments need to decide, do they want to introduce a tax on electric cars or do they want to commit to zero emissions by 2050?” said EVC chief executive, Behyad Jafari.

“The research shows unequivocally they cannot do both,” he said.

Research shows EV taxes are incompatible with carbon cut targets

Jafari cited University of Queensland research that shows proposed new taxes on EVs in Victoria and South Australia could undermine efforts by the same state governments to cut back greenhouse gas emissions.

This is because the taxes could slow the transition to EVs from petrol and diesel-driven cars.

‘You do not need advanced economics to understand that applying a big new tax on something discourages its consumption’

Transport is one major sector that needs to decarbonise for the economy to achieve a significant cut in greenhouse gases.

Many governments around the world have pledged to achieve a target of net zero carbon emissions for their economies by 2050.

The University of Queensland’s research shows new EV taxes could reduce their uptake by 50 per cent.

“What matters is perception, and even if the tax is only a few hundred dollars per year, the perception is that it will cost thousands over a car’s lifetime and that government does not support the technology,” Dr Jake Whitehead, a specialist in road user taxes at the University of Queensland told The Sydney Morning Herald.

Dr Whitehead undertakes work for the International Electric Vehicle Policy Council at the University of California.

High EV take-up needed to achieve net zero carbon target

It would require 90 per cent of cars to be EVs in order for the zero carbon emissions target to be viable.

“You do not need advanced economics to understand that applying a big new tax on something discourages its consumption,” said Jafari.

“These proposed state taxes will badly stunt Australia’s EV uptake before it even had a chance to get started,” he said.

Jafari said Australian states are to date the only jurisdictions in the world to suggest placing a tax on EVs.

More business figures are coming out in opposition to Australian states’ proposals for a EV tax or road user charge.

Tony Webber, chief executive of the Federal Chamber of Automotive Industries, told the Sydney Morning Herald it was “mind boggling” for governments to consider a tax on non-polluting cars.

However, Adrian Dwyer, chief executive of Infrastructure Partnerships Australia, said a road user charge was needed to maintain the roads network.

The role of EVs in the future of Australia’s transport sector has loomed larger with the impending closure of WA’s Kwinana refinery.

There is currently just 1,100 EVs in WA, and 14,000 EVs in the whole of Australia.

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