Mitsubishi slams electric-car tax proposal

Australia is at risk of being left behind in the electric-vehicle revolution, warns Mitsubishi, the first manufacturer to sell an EV locally, with plans to introduce another eight electric or hybrid cars over the next five years.

More than 10 leading countries offer EV buyers cash incentives of up to $10,000 (see table below) to help offset the high cost of the emerging technology.

Not only does the Australian government have no tax incentive for EVs, as of last week it was considering a proposal to tax electricity used by EVs at a higher rate.

This is on top of the increases in the cost of electricity once a carbon tax is in place.

A report in the Herald Sun newspaper last week quoted a committee submission that said Treasury should start consulting industry "with a view to developing an excise equivalent tax for the electricity used by electric vehicles in the medium term" to "reduce distortions in the fuel sector".

The electricity-for-EVs tax was also intended to make up for the revenue lost from fuel excise.

The report was delivered as the government plans to increase the tax on LPG to bring it closer to the tax on petrol and diesel.

The report did not say how energy providers could distinguish a household's power being diverted to an electric car versus the rest of the dwelling.

The proposal comes after Professor Ross Garnaut said in his final report into climate change that "zero emissions road vehicles now seem set to be the most promising source of abatement in the transport sector."

"We need to be encouraging [electric vehicle use], not taxing them more," said Mitsubishi Australia spokeswoman Lenore Fletcher. "For Australia to be able to get the benefit of introducing this technology, we need the same support that's been shown to consumers in other countries."

In addition to an upfront cash rebate at the time of purchase, owners of electric vehicles in other countries get benefits such as reduced registration charges, access to special parking spaces and fast lanes and concessions on road tolls.

At the launch of the retail edition of the i-MiEV yesterday, Mitsubishi Australia vice president, corporate strategy, Paul Steveson, said:

"Australia is the only market in the world where the i-MiEV has been released where there are no government incentives or policies to support EV introduction.

"Australia is really lagging in terms of progressive EV policy. I do believe we are now seriously lagging, it has been one of the big hurdles that we have had at Mitsubishi Motors Australia in getting the i-MiEV out here."

When asked for a comment on the proposed tax hike on energy for electric cars, Stevenson said: "Obviously that would be extremely disappointing, that's just completely counterproductive. There's obviously a revenue consideration in there.

"There's no two ways about it, our government is somewhat tied at present. There's a massive focus currently on carbon pricing and carbon pricing is an important step in all of this.

"While we've got this overwhelming focus on carbon pricing there are a whole heap of [other] things that just aren't getting on radar screens right now and EV policy is one of them. It means we are going to get behind in terms of EV introductions in Australia."

Stevenson said government policy is "a big challenge" for Mitsubishi but crucial to the successful rollout of EV cars in Australia. "You only have to think back to solar panels if you want to know the influence of government support," he said.

"For the last two years we've been talking to governments, we've been trying to show them and explain to them that this stuff is happening now. Australia has to get ready for it now."

He said support did not necessarily need to cost the government money. "Government support is not just cash incentives… building regulations, parking spaces… some of those don't actually cost governments anything to do, it's just a matter of having the will to do that."

The CSIRO's 'Electric Driveway' report said governments in the UK and the USA each plan to have one million EVs on the road by 2015, Spain one million by 2014, Canada 500,000 by 2018, France two million by 2020 and Japan five million by 2020.

The Mitsubishi i-MiEV is the first modern electric car on sale in Australia, the Nissan Leaf pure electric and Holden (nee Chevrolet) Volt plug-in hybrid are due in local showrooms next year.

Electric cars transfer their emissions from the tailpipe to power stations, but Mitsubishi says most i-MiEV customers paid for "clean, renewable energy". "Once the car is charged, it is zero emissions," he said.

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