Victoria adopts road user tax for electric vehicle owners, industry is responding
The Victorian government is again criticized by the automotive industry after the introduction of a new road tax.
Victorian owners of electric cars and other zero-emission vehicles must pay a road user tax of 2.5 cents per kilometer from July 1, 2021 – and the precedent could lead other states to follow suit.
The fee is $ 375 per year based on the national average distance of 15,000 km or just $ 125 per year for vehicles traveling 5000 km per year.
The Victorian government argued that the road toll needs to be introduced as zero-emission vehicles avoid fuel consumption, much of which is on roads.
The new laws passed by the Victorian Legislative Assembly this week also require plug-in hybrid owners to pay 2 cents for every kilometer they drive ($ 300 per 15,000 kilometers).
Because plug-in hybrids run on gasoline and electricity, these vehicles pay fuel consumption taxes and a distance-based fee.
Conventional hybrid and mild hybrid vehicles that cannot be charged from an external power source are exempt from the fee.
Owners are required to provide odometer readings to government agencies annually and risk having their vehicle registration suspended for non-compliance.
The new road user tax was introduced to offset the loss of 42.3 cents taxed on every liter of gasoline and diesel sold at the Bowser. Up to half of this is accounted for by the national transport infrastructure.
While the fuel tax goes to the federal government, the road user tax for zero-emission and low-emission vehicles goes directly to the Victorian government.
“Victoria isn’t just taxable [electric vehicles] (EVs) Parochial and premature, owners of plug-in hybrid EVs have to be taxed twice according to their ill-considered provisions – for the road user fee (RUC) and the fuel consumption tax. We do know, however, that old-tech hybrids that charge themselves escape the road user fee, “a Volkswagen Australia spokesman told Drive.
“The government seems unable to explain why it is hollowing out owners of the latest hybrids while exempting them from RUC vehicles with ’90s technology. It is not for nothing that Victoria’s bizarre move has been dubbed’ the world’s worst electric vehicle policy ‘ . “
In late April 2021, 25 organizations, including Volkswagen, Hyundai and Uber, signed an open letter to the state government condemning the new tax. They published a full-page ad in The Age newspaper calling it “the world’s worst electric vehicle policy”.
The open letter also states: “No other jurisdiction has introduced such a targeted levy on the cleanest vehicles on the road without substantial incentives to offset it.”
“Victoria is already massively lagging behind similar jurisdictions in the US, UK and across Europe in terms of electric car adoption,” said Behyad Jafari, CEO of the Electric Vehicle Council.
“Far from being on track to achieve net zero by 2050, emissions from traffic are rising in Victoria. This is the wrong time to tax zero-emission vehicles,” Jafari said.
In early May 2021, the state government announced a $ 3,000 subsidy to 4,000 electric and hydrogen car buyers in Victoria for models that cost less than $ 68,740 before road costs.
The $ 100 million package will fund two more rounds of up to 20,000 zero-emission purchases to receive the subsidy over the next three years.
Although a road user tax of 2 c / km is levied for plug-in hybrid models, the subsidy does not extend to these vehicles.
While the Victorian government was announcing the package, the New South Wales government proposed other financial incentives to boost sales of zero-emission vehicles. At the same time, NSW Transport Minister Andrew Constance rejected the idea of introducing a similar road user tax on electric vehicles.
Mr Constance told The Sydney Morning Herald the government should not consider such a tax until zero-emission vehicles make up at least 40 percent of the new car market.
“We will make ourselves the mockery of the world,” said Constance at the time, referring to the road user tax.
“We can’t just go this way, ‘Oh, we’re going to lose the excise duty, let’s put a toll on the road.’ No, we urgently need to scale and so we have to change the market and that really comes back to basic economics, “he said.
At the end of 2020, an investigation by Dr. Jake Whitehead, E-Mobility Fellow at the University of Queensland, that taxes for road users aiming for zero-emission and low-emission vehicles no longer encourage new car buyers.
“What matters is the perception, and even if the tax is only a few hundred dollars a year, the perception is that it will cost thousands over the life of a car and that the government does not endorse the technology,” said Dr. Whitehead at the time to SMH.
In today’s conversation with Drive, Dr. Whitehead, the recently announced subsidy from the Victorian government will not be enough to offset the new tax: “We should seek national reform of the road tax system and if we were smart, as I’ve shown in my research, we could do it one way that actually promotes the uptake of electric vehicles and achieves sustainable road finance in the long term. “
“The Victorian government needs to go much further to have a full suite of initiatives as part of an EV strategy if it is serious about getting 50 percent EV sales by 2030, which is the bare minimum to net To reach zero. ” Emissions by 2050, “he said.
The 2020 study was backed by a survey by the Electric Vehicle Council in early 2021, in which only 72.1 percent of Victorians thought the tax would lead to a drop in sales.
“Victorian voters are not stupid. They are seeing what is happening in the rest of the world where the use of electric vehicles is growing rapidly due to governments actively supporting their adoption,” said Behyad Jafari, CEO of the Electric Vehicle Council. said when the poll was published.
While South Australia was the first Australian state to propose the road user tax, the government announced in March 2021 that it would delay its introduction. South Australian treasurer Rob Lucas told the media the expansion would allow the government to oversee similar proposals in Victoria.
In early May 2021, Queensland’s Secretary of Transportation, Mark Bailey, told 9News that the government would be open to similar fees for road users in the future, but said, “Queensland is certainly not considering such a move in this year’s budget. We see these steps as very important considering premature “.
Government officials from Western Australia, Tasmania and the Australian Capital Territory have previously indicated that they are not currently considering introducing taxes on road users.
Ben Zachariah is a veteran Melbourne-based writer and auto journalist who has worked in the automotive industry for more than 15 years. Ben was previously an interstate truck driver and completed his MBA in 2021. Ben began publishing auto reviews and opinion pieces before being named Motoring Editor for an online lifestyle magazine. For the past 15 years he has held various marketing and communications roles across the automotive industry and has freelanced for a number of publications on automobiles and watches. Ben is recognized as an expert in classic car investments that combine his love of finance, macroeconomics and everything to do with automobiles. Ben lives in Melbourne and enjoys music, road trips and the great outdoors.
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