'EV tax' spreads to NSW as Australia leads world in punishing Tesla drivers

EV owners are the target of new distance-based road charge in NSW and South Australia
‘Hardly fair for tradies in utes to pay a tax that someone who can afford a $100,000 hi-tech car does not’
ASX explorers and miners for cobalt, copper, nickel and lithium benefit from EV demand

Drivers of electric vehicles (EVs) are facing a threat of higher taxes from revenue-hungry state governments in NSW and South Australia.

The Electric Vehicle Council (EVC) which campaigns on behalf of the sector has come out against the states’ tax proposals, and rebutted arguments that EVs cost governments money.

“The money paid in fuel excise does not get quarantined for roads. That is a myth,” EVC chief executive, Behyad Jafari, said.

NSW and South Australia would become the only jurisdictions in the world to apply a special tax to EVs if they went ahead with the measure, he said.

“Yes, in the long run governments will not be receiving as much in fuel excise as people drive more efficient vehicles. But that is a good thing,” said Jafari.

Taxing EVs was counterproductive at a time when governments should be encouraging their take up, he said.

EVs contributing to demand profile for ASX miners and explorers

EVs use a range of metals in their batteries including, cobalt, copper, nickel and lithium.

All these minerals are mined in Australia and additional demand from EV makers is expected to lead to higher prices for these metals in future years.

Less oil burnt in petrol-driven cars would mean less air pollution, said Jafari, and less dependency on fuel imported into Australia,

Analysis by the EV Council shows that drivers who switch to an EV provide a $1,370 boost to government coffers, and a $8,760 boost to Australia’s economy over a 10-year period.

“What will be lost in fuel excise and GST revenue is more than made up for in savings on strategic fuel reserves leasing and the significant health and environmental benefits,” said Jafari.

Road user tax a fair go for petrol car and EV drivers

NSW Treasurer Dominic Perrottet is proposing a road user tax that would start with EVs but would eventually apply to all types of vehicles, possibly Australia-wide.

Perrottet told The Australian newspaper Friday it was time for EV users to pay a fair and equitable share toward their road use.

“You don’t want to stifle new technology, but on the other hand, it is hardly fair for tradies in utes to pay a tax that someone who can afford a $100,000 hi-tech car does not,” the NSW Treasurer reportedly said.

NSW is proposing to charge EV drivers a new tax based on the distance of their journeys, according to a government report.

“A distance-based charge for EVs could be incorporated into a future, broader charging regime for all drivers that reflects their actual use of the road network,” said a NSW government report.

EVs would effectively have their locations tracked to calculate the relevant amount of tax.

EVs to pay a lower charge for zero emissions

An alternative proposal is for EV owners to pay a charge for any negative impacts of road use, such as congestion – currently not taken into account in vehicle registration charges, stamp duty or fuel excise.

EVs would pay a lower charge under this proposal because of their zero carbon emissions.

“The NSW government should work with the Board of Treasurers and state transport departments to design a nationally compatible and fair road user charging scheme for EVs,” said a draft recommendation in the report.

Drivers of petrol-driven cars and trucks currently pay fuel excise of around 42.3c per litre.

South Australia’s Treasurer, Rob Lucas, has also outlined plans to introduce a distance-based EV tax from July 2021.

Governments say EVs enjoy a free ride in Australia in terms of fuel duty, though it could be argued that their owners pay electricity costs while charging their vehicles at home.

EVs make up less than 0.1 per cent of the total 19.8 million vehicles on Australia’s roads.