Victoria’s planned road user tax for electric vehicles will significantly hold back clean car use, according to research that found it could lead to a 25% lower share of sales in 2050 than otherwise expected.
The Andrews government plans to impose a 2.5c a kilometre charge on electric vehicles (EVs) and a 2c/km charge on plug-in hybrid cars from July. South Australia is also planning an EV road user charge, but is yet to announce the rate.
An analysis by Dr Jake Whitehead, from the University of Queensland’s Dow Centre for Sustainable Engineering Innovation, said federal government modelling had suggested EVs would be about 65% of new car sales by 2050, based on existing policies.
Modelling of the 2.5c tax rate – undertaken before Victoria made its announcement – found this would be expected to fall to 40% if the additional cost was imposed without being accompanied by new incentives.
Applied nationally, this would equate to at least 4.9m fewer EV sales. Whitehead said it would likely lead to greenhouse gas emissions from transport continuing to increase given the overall number of cars on the road were forecast to rise significantly and a greater proportion would run on fossil fuels.
He said the EV per kilometre charge policy was “completely incongruent” with the states’ targets of reaching net zero emissions by 2050.
A road user tax could make sense, he said, but should be accompanied by other measures that made buying clean cars more attractive, such as removing or reducing registration costs, stamp duty, GST and road tolls. Victoria has a $100 concession on registration for EVs and hybrids. Whitehead suggested this was not enough.
“It is very easy to claim net zero targets, but there needs to be commitments to back it up and this is running in the wrong direction,” Whitehead said.
Only about 0.6% of new cars sold in Australia are electric, a lower share than virtually all other OECD countries. National transport emissions have increased by 17% since 2005.
The federal government promised a national EV strategy last year, but Scott Morrison attacked a Labor policy to promote the technology during the subsequent election campaign as a plan to “end the weekend” and the Coalition policy was later delayed. It has now been rolled into a “future fuels” policy, covering EVs, hydrogen and biofuels, with a consultation paper promised before the end of the year.
The push to introduce road user charges for clean cars is based on the argument drivers pay for roads through a national excise on fuel, and EV drivers do not pay this charge.
Critics of the plan point out fuel excise goes into general budget revenue and is not specifically dedicated to road funding, and that EV use needs to expand rapidly to cut emissions given the urgency of the climate crisis.
The states believe introducing a road user charge will be easier now, when there is a small EV market and many owners are comparatively wealthy, and would be more