Electric vehicle (EV) owners could soon be charged per kilometre driven, with a federal road-user charge (RUC) moving closer to law after the 2025 Economic Reform Roundtable.
The Productivity Commission first recommended a national EV road-user charge in 2017, arguing it would eventually replace falling fuel excise revenue.
Victoria introduced a Zero and Low Emission Vehicle Tax in 2021, which the High Court struck down in 2023 as unconstitutional, ruling that only the Commonwealth can impose a “duty of excise.”
The proposed charge would act as the EV equivalent of the 51.6 cents-per-litre fuel excise petrol drivers pay for road maintenance.
Reactions to the RUC have been divided.
The Australian Electric Vehicle Association (AEVA), a non-profit EV consumer group, has suggested a universal model that applies both EVs and fossil-fuel vehicles
Their proposed model would replace the existing fuel excise entirely, applying per kilometre to all vehicles.
AEVA’s model also factors in vehicle mass to more fairly charge drivers based on the amount of damage their vehicle does to roads.
“The reason why [the fuel excise is] not really a good idea”, explains Antony Day, chair of AEVA’s WA branch, “is that some cars use a lot of fuel to drive a short distance, […] so it actually has no real bearing on road usage.”
EV drivers recognise the “inevitability” of a road-user charge, according to Mr Day.
“Currently we’re on 10 per cent of sales for electric vehicles. When we get to 50 per cent of sales, 60 per cent sales, 100 per cent of sales, eventually, […] there’ll be nobody paying for the roads.”
Rob Dean, chair of the Tesla Owners Club of Western Australia, says early adoption is best for certainty.“The sooner they implement it and the discussion is over, the better for EVs.
“Those [EV owners] saying it’s a bad time are just thinking about themselves because […] they don’t want to be paying any more money.
“They’re not thinking of the bigger picture.”
Mr Dean says continued debate and media coverage around the tax introduction do more damage to EV uptake than the charge itself would.
“The EV tax is being used as a weapon to slow down EVs.”
Mr Day believes that while EVs will retain their upper hand cost-wise over petrol cars, a road-user charge “will definitely affect” Australia’s uptake of electric vehicles.
He says an Uber driver who drives 50,000 kilometres a year would end up paying around $1,350 annually under a 2.67 cents-per-kilometre charge.
“It’s money that they don’t necessarily have.”
A joint statement from state treasurers on September 5 says reforms should avoid discouraging the ongoing adoption of electric vehicles.
Mr Day calls New Zealand’s 7.6 cents-per-kilometre electric vehicle RUC out as “punitive”, saying AEVA will lobby for as low a charge as possible in Australia.
He says that while AEVA and other electric vehicle bodies have made submissions to government regarding an EV RUC, they have not been included in direct discussions.
Proponents for the charge argue EVs damage roads more due to their weight. Former Victorian Treasurer Tim Pallas is one such voice, a claim Mr Day describes as “highly inaccurate, completely false”.
While EVs can skew towards the heavier side when compared with internal combustion engine vehicles in the same category, critics say this comparison doesn’t hold in Australia, where top-selling EVs are generally smaller than the most popular petrol utes and SUVs.
“[Tim Pallas is] not going to have a go at Ute drivers because they’re a big part of Australian society,” says Mr Dean.
“There’s not many electric car drivers. It’s an easy target at the moment”.
