EV group demands universal road user charge
Australia’s EV owners say they’ll pay their way, but only if every vehicle on the road is charged by weight and distanceThe News
Australia’s biggest electric vehicle owners’ group has told federal and state governments that it will accept a road user charge (RUC), on one condition: everybody pays.
The Australian Electric Vehicle Association (AEVA) has used the eve of Everything Electric Sydney event to push a national, universal charge based on how far a vehicle travels and how much it weighs, rather than what comes out of the tailpipe.
It could be viewed as a direct shot at the NSW Government’s plan to introduce an EV-only, distance-based charge in 2027, a model AEVA argues punishes the cleanest cars on the road while leaving heavier, dirtier vehicles untouched.
The Key Details
- AEVA wants a nationally consistent RUC set by the Commonwealth, not states
- Charge would apply to all vehicles regardless of powertrain
- Proposed rate of 3c per tonne-kilometre
- Roughly $858 a year for a 2.2-tonne ute doing 13,000km
- Odometer readings, not GPS tracking, would collect the distance data
- Fuel excise stays in place as a pollution tax; fuel tax credit scheme gets the axe
The Finer Details
The numbers underpinning any tax on motorists are eye-watering. Australia has 476,000km of sealed roads carrying more than 180 billion vehicle-kilometres a year, serviced by a fleet of 22.3 million registered vehicles.
Stitching together any sort of legislation involving such numbers wont be easy, but the AEVA has given it a red hot crack. Check out the AEVA policy document here.
Among those mind-boggling numbers are 16 million passenger cars, four million light commercials, 982,000 motorcycles and 795,000 trucks.
Keeping that network upright costs more than $44 billion across all levels of government in 2024 alone.
Roughly $36 billion of the money flowing back in came from road-related sources, with the states collecting $26.5 billion via registration, licence fees and stamp duty, local councils pulling in $6.7 billion in parking fees, and the Commonwealth banking $25 billion in fuel excise.
Except that last figure is a mirage of sorts. Because after fuel tax credits were paid back to eligible businesses (mostly mining and resource companies), the net excise take was just $10.6 billion.
That leaky bucket is why Treasury is circling a RUC, and why AEVA has spent years preparing an answer – and its central plank is mass or weight.
Road wear rises steeply with weight, so a flat cents-per-kilometre rate treats a 3-tonne electric SUV and an electric motorcycle as equals, which they plainly are not.
“If two vehicles weigh the same, and are driven the same distance each year, it’s only fair that they pay the same road user charge,” said AEVA policy convenor Dr Chris Jones.
“But if one of those vehicles burns petrol or diesel, they should pay for the cost of that pollution too.”
Under the current arrangement, an average petrol car burning 10 litres per 100km contributes about 5.3 cents per kilometre in excise.
A frugal hybrid on 4.0L/100km pays roughly 2.1 c/km. An EV pays nothing. Same road, same damage, very different bills.
“The NSW model means an EV would pay more per kilometre than a conventional petrol hybrid,” Jones said.
AEVA also wants heavy vehicles brought in eventually, though at a far gentler 0.45c/km, reflecting the fact that road damage scales with the fourth power of axle mass.
Charge a 40-tonne semi-trailer at passenger car rates and freight costs would go supernova.
The Road Ahead
With more than 150,000 new battery-electric vehicles sold in Australia thus far this year, the revenue hole is no longer theoretical, and neither is the political fight.
AEVA wants any universal charge phased in over a decade, reaching 3c/km by 2035, or applied only to vehicles built after 2021, so motorists who can’t yet switch to an EV aren’t slugged twice.
“We knew this was coming, so we’ve spent the last decade both leading the debate and advocating for a fair implementation,” Jones said.
“We’re not after a free ride, but we are asking for policy which encourages EV adoption and motivates better vehicle choices.”
The Commonwealth has yet to land on a model, and with NSW already committed to a 2027 start, the window for a nationally consistent scheme is closing fast.
It’s also worth remembering the High Court of Australia declared Victoria’s electric vehicle tax unconstitutional in 2023.
Nevertheless, Climate Change and Energy minister Chris Bowen has previously signalled that a road user charge is inevitable. Time will tell if AEVA’s policy contributes to the legislature.
Related: EV 'road user' charge back on agenda amid fuel excise criticism
Related: Victorian EV tax judged invalid
Related: Road tax to replace fuel excise – for EVs too
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