South Australia hits EV owners with road user charges
After much speculation in recent times as to how governments would tackle road funding amid the transition from petrol-powered cars to electric vehicles, the South Australian government has made the first move. In doing so, the government has effectively set down a precedent that could have implications for the rest of the country, if others follow suit.
What has been announced
Starting from July 1, 2021, electric car owners in South Australia will be required to pay road user charges that cushion the blow from a slow but steadily growing gap in the budget for road funding.
Fuel excise has long been the revenue raiser for the federal government, which is then distributed to the states for the upkeep, maintenance and upgrade of roads. With cars not only more fuel efficient in this day and age, but society also contending with alternative fuel technologies such as hybrid and pure electric vehicles, fuel excise hasn’t been keeping up with the nation’s population growth.
The move will bring EV owners into alignment with their motoring peers, ensuring all drivers contribute towards road funding across the state.
What will be the charge?
At this stage, specifics of the road user charge are yet to be finalised.
The government will need to crunch the numbers over the coming months and come to a figure that is deemed fair and proportionate, yet at the same time, not go so far as to disenfranchise prospective buyers of electric vehicles.
Budget papers from the South Australian government indicate the charge will likely include two components – a fixed charge, as well as a distance-based charge.
For now it remains to be seen whether the charges will have an impact on the adoption of electric vehicles. To date, the sector has seen sluggish growth, with local motorists favouring gas-guzzling SUVs. However, while it might not necessarily be a punishment of any sort, the advantage that may have been there is set to be no more, which ultimately isn’t going to help the cause.
What’s your take on road user charges for electric vehicle owners?
Level 2, 9 Help Street
Rob says:
All road users should pay their dues including bicycle riders. This idea that roads being payed by their users is correct. I drive a car and pay my taxes and expect the roads to be acceptable to drive on
Bicycle riders pay nothing, complain constantly about not having road area. EV drivers should pay their way and not expect that having an electric car makes them special
December 4th, 2020 at 9:34 am
Ange says:
I don’t have an issue in principle
But the government needs to get rid of LCT which is just a donkey tax on cars and international trade
Back to EV then the government needs to give subsidies to ev manufacturers or purchased to make these cars cheaper
If the government really cares about the environment then why aren’t they doing more to help Australians buy EVs
December 4th, 2020 at 9:38 am
Bruce Gill says:
The predictable response is of course that it will slow the uptake of EVs. I have owned a PHEV since 2016, so use less fuel than an ICEV, and will be annoyed if I have to pay an extra charge. The EV lobby group has of course (and correctly so) highlighted all the negative consequences of an EV tax, as well as flagged how the negative consequences of ICEVs are not paid for (i.e. health impacts of air pollution, import cost of fossil fuel, environmental impact on the planet) and how EV owners already pay through higher purchase costs and taxes. However, state governments, being political beasts, may have played a card that is in the best interests of EV’s? The Fed. Govt reaps all the fuel excise, and we’ve all heard about how little of that actually gets spent on state roads. They are helping pay for the roll out of EV charging stations. However, as EV drivers are generally a pragmatic bunch of people, copping and accepting a new tax then gives EV owners and lobby groups greater say in future EV transition and support measures that inevitably have to occur in the future. That’s my thoughts on the EV tax anyway.
December 4th, 2020 at 9:50 am
Terry Reedman says:
The reason to buy electric cars and pay more for them is to save on petrol, and help the environment .
What is happening with car registration ? that should be going to pay for upkeep with the roads that we are not paying tolls on.
You are going to destroy the electric car industry before it is started.
You are going to kill the insentive to buy .
December 4th, 2020 at 9:50 am
David says:
This is nothing more than a money grab for extra tax. Fuel excise stopped going to roads years ago and all the money just goes into the general coffers. Sure roads are one thing they pay for but in this day and age where we are so far behind most of the world in cleaning up our air, this is just another backward step instead of supporting cleaner technologies.
December 4th, 2020 at 10:08 am
Rory Neal says:
About time All road users need to pay for road maintenance, past experience shows poor roads lead to accidents. Perhaps the various Governments across Australia should look at ways to tax cyclists to fund better cycle ways to keep vehicles and cyclists apart also.
December 4th, 2020 at 10:12 am
John Duke says:
Agree EV’s should pay for the roads they use …same as cyclists..
December 4th, 2020 at 10:14 am
Haydn Scott says:
They should wait until at least 30% of cars are EVs before brining in this tax. They are discouraging people from buying EVs. Typical dinsosaur Liberal party thinking They are all bought and paid by the fossil fuel industry.
December 4th, 2020 at 10:15 am
Anthony says:
Good idea should have happened earlier.
December 4th, 2020 at 10:18 am
Jonathan Dann says:
How it should be.
Why should EV owners be allowed to use the road network that all pay for. You potentially need to be fairly wealthy to purchase an EV product in the first instance and then get to utilise free roads.
Given Australia’s reliance on fossil fuels to generate power at present and the environmental production impacts of mining and construction and transport costs, other than making the owner “feel good” the actual environmental impact is potentially intangible currently. Obviously this will change as we move to renewable energy and hydrogen for a fuel source.
We have a very bad record of purchasing and changing vehicles like we were buying a new tee shirt as a fashion statement. We would be much better and significantly more environmentally friendly utilising existing cars until they are no longer operable with a 20-30 year potential lifespan, rather than just making more and more constantly.
There are a huge amount of Corollas etc out their etc, working just fine at 20-30 years old which have potentially saved the creation of four or five other vehicles. They may use a couple of litres more per 100km, but in the big picture, insignificant.
December 4th, 2020 at 10:21 am
Trevor Hart says:
I like many other have a hybrid vehicle. How will they be accommodated. Taxed twice?
December 4th, 2020 at 10:21 am
Peter James Smith says:
EVs are already considerably dearer to purchase than ICEs.The only (economic) advantage there is in buying an EV is lower running costs. If governments are really concerned about a move away from ICEs they should be considering a decent subsidy (GST relief?) on new vehicles rather than introducing disincentives to their purchase!
December 4th, 2020 at 10:24 am
Greg Smith says:
Luxury car tax supposedly to protect Australian auto manufacturers
Disproportionate stamp duty on purchase
Who says EV owners don’t contribute a fair share of tax
There is irrefutable evidence of human influenced global warming. Mankind cannot continue to burn fossil fuels and discharge the result into our atmosphere
Transport contributes a massive proportion of that CO2
We should be doing all we can to encourage the transition to EVs not taxing them
December 4th, 2020 at 10:36 am
Cliff Viertel says:
User pays. All classes of road user should pay for their road and infrastructure use based on mileage and weight. Subsidies for social engineering in all forms should be avoided.
December 4th, 2020 at 10:40 am
Mike Gunn says:
About time some of the subsidies were removed so people see the true costs!!
December 4th, 2020 at 10:48 am
Robert Cook says:
A mileage charge should be ok but I would not buy an EV if there was a fixed fee as I am a low mileage user
December 4th, 2020 at 10:52 am
Arthur Hall says:
Well, why should EV owners get a free ride on the back of petrol vehicle excise paying for all the infrastructure they drive on…?
December 4th, 2020 at 11:02 am
Ray Fogolyan says:
Road funding comes from consolidated revenue fuel excise is not directly used to fund roads. Why not introduce charges based on the impact or wear and tear vehicals have on the roads so bigger trucks have a significantly higher impact on roads in the order of thousands of times more damage than cars can pay their fair share and move some of the heavy traffic off the roads and back onto rail. The information in your article is not accurate fuel excise is not directly related to road funding. We need to promote a transition away from fossil fuel vehicles to more sustainable options
December 4th, 2020 at 11:08 am
Allan Dollisson says:
I am looking for a new car right now and was thinking of going electric as a choice. But after reading your article on gov charges it has made my mind up for me. Cross ev off the list because the gov will continue to increase charges.
Back to looking for petrol.
December 4th, 2020 at 11:10 am
peter webb says:
EV users should pay an equivalent and proportionate excise to users of other road vehicles (petrol, gas, diesel, etc).They should also meet the costs associated with enhancing electricity networks and providing retail charging points. After all, they will get the advantage of using renewable energy – the cheapest form of electricity.
Perhaps also subsidies paid to support renewable energy should be totally abolished. Then EV users would truly be paying their own way and be able to live in virtue signalling nirvana!
December 4th, 2020 at 11:16 am
Nigel Jays says:
Sounds fair, all road users should pay. Now let’s start taxing push bikes too !
December 4th, 2020 at 11:26 am
Logen Mylvaganam says:
I this this is a bad idea. The EV cars still pay road tax which are similar to the petrol cars, the road tax is what the governments use to improve road. I am an owner of a electric vehicle and am already slugged with electric coast and now additional cost are proposed. What happened to the environmental support for EV like the solar system. I hope sense over economics prevail. It will be very hard on retirees.
December 4th, 2020 at 11:36 am
TERRENCE COX says:
I believe the fairest way is to tax the distance travelled.
those who use the road the most pay the most.
December 4th, 2020 at 11:37 am
Justin says:
It’s fair enough. They still use the roads and why should other tax payers subsidise their electric car use? Electric cars as not the carbon neutral or no carbon alternative that their sellers would have us believe. The cost in manufacturing and current cost does not make very economical. Also the batteries they use are no way nearly developed in technology for reuse, charge capacity, and the mining issues involved to paint of a picture of no cost or vastly reduced impact on the environment. Carbon capture and atmospheric clean up of CO2 may yet have a big role to play in motor transport.
December 4th, 2020 at 12:00 pm
Anthony Green says:
I cannot believe how so many people on this post have missed the point (some nearly got it). Everybody in the country uses roads in one way or another – we pay taxes for the Government to provide infrastructure and run the joint – this includes roads. Taxing on the basis of distance travelled is definitely Big Brother in the extreme – how are they going to do this without further impinging on our privacy and personal business – electronically ?
The bit many got was that this is a very quick way to put people off buying EV and so there goes the environment (again) !!
December 4th, 2020 at 12:24 pm
Harry Giles says:
I have yet to see an investigation into fossil fuel usage to produce the EV power use (minus the home solar charge) and the cost to produce that amount of electricity for EV vehicles.
Re roads: the heavier the vehicle, the more the wear and tear on our roads, so vehicle registration costs should be based on the weight of the vehicle. With electric cars being considerably heavier than conventional, surely they cause more road wear than other cars? Rego costs based on EV cars being classified as one cylinder is also unrelated to road wear. It’s time for this to be applied more fairly to all road users.
December 4th, 2020 at 12:24 pm
Anthony Green says:
As an addendum I read in Wheels recently that if you are using the Tesla Fast Charge system being installed in the country you end up paying as much as if you had driven a petrol powered BMW 3 series.
December 4th, 2020 at 12:27 pm
susan Rae says:
I have a hybrid – so how would that work ? The battery only stores power for 40kms then I pay the tax when I fill up with petrol, plus registration etc., I drive less than 4000kms per year so a fixed fee would be ridiculously unfair. All road tax should be done on mileage travelled – so user pays pro rata. That’s the only fair way.
December 4th, 2020 at 12:36 pm
Alison says:
As there are too many people on the planet, the government would do better to curb the population by not taking anymore refugees or immigrants, rather than inventing charges for people with electric cars who are just trying to improve the environment by creating less emissions. The money that could be saved by cancelling retired politicians lifetime free travel & other perks could be used to maintain the roads.
December 4th, 2020 at 1:17 pm
David Jorritsma says:
Another case of wrong signals from Australian lawmakers, every other 1st world country (including China) gives some benefit for reducing vehicle emissions by purchasing Electric Cars except Aussie.
Some states are now looking to tax the EV or Hybrid in some cases more than a petrol-engined car by applying a formula that disadvantages a vehicle that doesn’t use any fossil fuel.
This is madness in a country that depends on fossil fuel too much anyway and needs to find ways to start to reduce emissions.
The cost-benefit is small but the message it is sending is very huge “don’t care ” to people that believe we should at least try.
December 4th, 2020 at 2:06 pm
Robert Clark says:
Good idea, all who use the roads should be taxed, including cyclists.
December 4th, 2020 at 2:20 pm
Johan says:
It was always inevitable that EV and PHEV would be taxed. Not so sure about hybrids as they are more or less a regular car that just consumes slightly less petrol. The propose 2.5 cents per km is ridiculously low.
EV cars use the road like every other vehicle and if you count up how many cents a petrol owner pays, that should be the same as an EV car owner. The governement could create an incentive by leaving the regsitration out, or give a rebate, like they with pensioners.
Excise tax pays for roads, and now even for the charging stations that pop up around the country.
I propose: an average care uses 10 L per 100 km, so pays 10×50 cents tax. The EV owner also needs to pay this amount of 5 $ per 100 km, deducted from that the costs to charge an EV for 100 km.
You can not have it both ways, have other cars pay your roads and your charging infrastructure and you do use but not contribute.
And yes, bike riders need to pay a yearly registration too and have mandatory insurance. That is only fair.
December 4th, 2020 at 2:37 pm
Johan says:
By the way, what clearly speaks from the posts above is, that people do not buy EV for the environment, but to use roads on other peoples costs by escaping tax. I have little time for these arguments.
If you bought an EV for reasons to help the environment, good on you, and you would certainly not mind paying the 5 $ tax per 100 km usage of the roads.
In Norway, where most of the cars sold are EV, EV have an in built SIM card that uploads the kilometres used and, just like with toll roads, a monthly automatic deduction is created. Sound like the fairest and simplest system.
December 4th, 2020 at 2:48 pm
Tom Smith says:
I believe all vehicles on the road should pay an annual road tax, based on the weight of the vehicle and the distance travelled. Heavier vehicles damage the roads more, and pollute more due to the greater amount of rubber worn from tyres. Recently, a new Audi electric SUV was reviewed. Its battery pack weighs 700 kg. That’s equivalent to about 10 adults riding in the car in addition to the normal passenger complement.
Should bicycle riders pay a road usage fee? Yes, and I say that as someone who has ridden a bicycle daily for fitness for 40 years (and who has been a licensed driver for 60 years). However, the amount should be commensurate with the amount of infrastructure provided for riders. At present, that would amount to zip. I would suggest $20 per year for each bike rider over the age of 12, which is the age in NSW where bike riders must ride on the road and not on the footpath. When we lived in Switzerland, my bike was registered and carried a number plate, paid for with a yearly fee. Bicycles are vehicles on the road, and should be accorded the same respect as all other vehicles. At present they aren’t. The proof is the number of cyclists killed each year by careless (and possibly psychopathic motorists).
December 4th, 2020 at 3:02 pm
Michael Lightfoot says:
A road user tax is in theory the most equitable way to fund roads.
However, a true road user tax will never be implemented because powerful lobbies will get in with their usual rent seeking and the small vehicle and efficient road users will end up paying for the B doubles to tear up our roads.
Registration is supposed to be levied on the basis of the size of a vehicle (and therefore the wear and tear that each vehicle imposes on roads) but it has never reflected reality and some state governments took advantage of that (SA was the worst) by encouraging registration of interstate trucks in their state.
In it’s proposed form this tax is not equitable and will do harm to the urgent need for a move away from ICE vehicles to renewable sources such as EVs and HPVs (Hydrogen Powered Vehicles).
And heavy vehicles must be forced to pay for their road use commensurate with the damage they do.
December 4th, 2020 at 3:23 pm
Rupert says:
How about just user pays per kilometre per year??? That would be the fairest thing! Other countries do it. So could we…rather than a generic annual cost per vehicle.
December 4th, 2020 at 4:16 pm
Jason says:
Interesting where we are as a country. On one hand there is subsidies to install solar, there is a big push for renewables, and there is well documented evidence of human induced climate change where transportation is one of the main contributors. And electric vehicles make up less than 1% of all road users.
Some comments are “make them pay their fair share”. What does that mean? The fuel excise is going into general revenue, so that pays for health and the military, etc. Well an electric vehicle does not pollute (especially if powered by renewables) so the health impact is decreasing. It does not rely on Middle East oil, so arguably we should not need to go to war to ensure that supply in the longer term. So how much should an EV driver pay? Certainly not the same as what the fuel excise would contribute as their over-all impact is different.
At a time when government should be encouraging this transition I think it speaks volumes about our government and country that we are going in an almost opposite direction.
December 4th, 2020 at 4:34 pm
P algar says:
I agree all road users should pay their share. EVs already pay in the initial cost. The point is that none of us will be driving if we don’t tackle emissions. Analogy in kindergarten: “He’s got more lollies than me. That’s not fair.” Let’s give them all lots of lollies and watch their teeth rot. There’s a principle here to clean up first.
December 4th, 2020 at 5:48 pm
Tom Denigan says:
I believe the tax on EV users for not using petrol doesn’t go far enough. I have chosen not to smoke for over 40 years and I believe those clever policy makers in Victoria and S.A. should widen the scope of revenue raising and tax other non users of a consumable good namely tabacco. I have calculated that by not smoking a pack a day I have cost the government roughly $10 per day for the last 40 years. That is around $21,000 in revenue I haven’t paid that I believe I should now pay and with my Super falling due I feel obligated to do just that. Racked with guilt over my non payment of departure taxes and other holiday associated taxes for not flying during the pandemic I am going to weigh in another $1000. I encourage all non users of consumable goods that carry taxes to also cough up including those who don’t drink alcohol. Take a good hard look at that decision and be reasonable, most other Australians have been pulling their weight and drinking heavily to make up for your lifestyle.
What about bracket creep. Despite politicians receiving an annual increase year on year my wages haven’t increased in real terms in 10 years. I should be paying 37c in the dollar but am only paying 32c. So I am going to ask my employer to take more tax from me and again reach out to my fellow Australians to do the same.
I used to wander the house turning off lights, recycling my refuse, enjoying my solar hot water and planning the next holiday with my 12c feed in tariff from the panels on my roof. How selfish was I. Well thank goodness the governments in Victoria and SA lead the world in creative new charges for EV users.
What about those bloody environmental warriors, fancy objecting to pay a tax for not using petrol. Don’t stand up on your soap box and complain about how much you contribute through the EV luxury tax or import costs for these vehicles or the taxes in registration or tolls you have to pay. Then say we do contribute to roads in our income tax that supports infrastructure thus a further tax for not using petrol is unfair. Ditch that Duracell, buy a V8, start to pay your way, contribute to global warming again or move to Canberra where they plan zero interest loans and no rego costs for electric vehicles.
Keep it up Vic and SA and think of all those pensioners who choose to stay at home, see if you can squeeze them for not selling their house? Maybe a reverse Stamp duty for those over 70 who choose to live at home. Food for thought and barely scratched the surface.
December 4th, 2020 at 7:07 pm
Emad Masoud says:
Two wrongs don’t make a right. Fuel excise to maintain roads was unfair. The tax to maintain roads should just come from the tax pool based on income as opposed to putting more load on struggling individuals who have to travel more to make ends meet. Putting an excise on EVs is another unreasonable proposal:
1. While most countries are providing subsidies for buyers of electric cars for many many reasons (environmental/safety/etc.) Australia has just ignored all the benefits and never provided any subsidies to speed up the uptake of EVs.
2. EVs do not pollute the air like ICEs: Pedestrians, runners and other riders and drivers won’t have to smell and breathe the exhaust – improving health and well-being and enjoying being outside.
3. EVs do not create noise pollution like ICEs – again many health benefits especially when mental illness is becoming more widespread.
December 4th, 2020 at 11:16 pm
Glenn Maloney says:
If you want equalization for all….go live in a communist country.
Charge people more taxes! for trying to do the world a favour …. really?
How about we reduce government waste of tax payers money, use the tax collected for it’s intended purpose and not put it in consolidated revenue to be siphoned off by politicians to other areas.
We pay enough taxes as it is…..if you want to pay more go ahead knock yourself out, leave me out of it.
December 4th, 2020 at 11:16 pm
lawry thompson says:
Waite till someone gets a car to run on water then there will be a tax on rain.
December 5th, 2020 at 7:19 am
Robert Brownsitch says:
EVs are primitive failures that the ICVs wiped out 120 years ago. Just tax them to extinction and we’ll all be better off.
December 5th, 2020 at 7:38 am
gary newton says:
why do you refer to the majority of road users as driving ” gas guzzlers” it reads as if you are against ordinary road users from the start. I would like to see you and your green mates tow a 20 foot van around this country using an ev, not possible,those same people spend thousands of dollars in Australia. They help the economy hugely in forgotten outback towns will the government be installing charging stations everywhere around this country, I don’t think so or will they just look after city dwellers, I think the later is more a reallity. You want to drive an ev pay for the privilege, your not doing it to save the bloody planet your doing to save yourself some money, pay up and that should apply to cyclists as well.
December 5th, 2020 at 10:13 am
gary newton says:
sorry I forgot to add, stop subsidising the so called renewables and lets see the true cost of green power, it will make your eyes water,By the way my house has a roof full of solar panels that someone else is paying for but no ev in the garage, no charging points where I live, there is a lot of work to do in this area,a lot.
December 5th, 2020 at 10:23 am
Mike says:
There will eventually be a tax of some sort on EV’s.
However environmentally desireable EV use is, being tax free is asking those who drive an ICE and probably can’t afford an EV to subsidise those who can, that is a bit unreasonable.
In these days of easy tracking the fairest option would be to scrap excise duty and levy an equal charge based on vehicle size (equates to road damage) and distance driven. The collection of data could be recorded only as distance, not location to remove privacy issues.
EV’s may be more environmentally friendly in terms of hydrocarbons but they still contribute to road deterioration and congestion.
December 5th, 2020 at 8:01 pm
Raffaele says:
Good morning to you all,
First, I think Australia is one of the Country in the World to have the hiest tax on cars, I think we already pay for road infrastructer on the registration, I have 2 cars and I pay over 1200 dollars per year of registration can anyone explain to me way we pay Registration?
than we pay to park the car on the street, and tolls in the major city?
so if they want to charge EVs 2.5 cents per Km scrap the registration and other tax on cars.
Thank you
December 7th, 2020 at 8:31 am
John says:
All vehicle owners should pay a road use fee, based on tonnage of the vehicle. This already happens at registration for heavy vehicles, but SUVs (which contribute much more to road wear and tear than small and medium sized cars) are currently treated much the same as smaller cars. On the other end of the scale, bicycles pay nothing. Charging possible partnership a modest user fee that includes at fault injury insurance would be handy. Treating SUVs more like the trucks they they are may discharge people from buying oversized status symbols that they can’t safely drive.
March 4th, 2021 at 10:44 pm