South Australia axes its EV tax

South Australia has quietly repealed the controversial electric vehicle tax it proposed in 2020.

At the time, then-treasurer Rob Lucas revealed the Marshall government’s intention to introduce a road user charge – including a fixed component and a variable charge based on distance travelled – for zero-emissions vehicles, which don’t contribute to fuel excise.

Originally due to come into effect on July 1, 2022, industry and public backlash saw the start date pushed back to July 1, 2027, or when EV uptake hit 30 per cent, when the charge would have kicked in at 2.5 cents per kilometre.

Now, however, the Malinauskas government has made good on its May 2022 election promise to abolish the road user charge.

SA transport minister Tom Koutsantonis said at the time: “The feedback we received from the community was overwhelming, the Liberals’ decision to introduce this tax would have reduced community uptake.”

Legislation to repeal SA’s EV tax passed the state’s Upper House without fanfare last week, in the form of the Motor Vehicles (Electric Vehicle Levy) Amendment Repeal Bill 2022.

“South Australians want to see their state government incentivising the take-up of electric vehicles, not slugging users with extra costs,” said Koutsantonis.

In addition to the so-called Electric Car Discount announced by the federal government in November 2022, SA continues to offer EV subsidies.

Similar to the EV incentives offered in other Australian states and territories, it comes in the form of a $3000 rebate and a three-year registration exemption for buyers of eligible new battery-electric (EV) and hydrogen fuel-cell vehicles (FCEVs) priced under $68,750.

Of the 7000 EV subsidies announced by the Marshall government in late 2021, there were still 6400 remaining as of January 23. There were 242 EV sales in SA last month – up from 32 in January 2022.

In contrast, several other states continue to charge EV taxes, or are planning to do so.

Introduced in 2021, Victoria’s ZLEV road-user charge demands 2.6 cents per kilometre from EV and FCEV owners, and 2.1c/km from plug-in hybrid vehicle (PHEV) owners.

NSW’s road user charge will apply to eligible EVs from July 1, 2027 or when EVs account for 30 per cent of all new vehicle sales, while a similar charge starts in WA from 2027, when EV and FCEV owners will be taxed 2.5c/km and PHEV owners will pay 2c/km.

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