EV group wants petrol, diesel vehicle owners to be taxed twice

An electric vehicle (EV) lobby group has once again called for a road-user charge to be implemented in Australia, but it doesn’t want the existing fuel excise to be repealed.

The Australian Electric Vehicle Association (AEVA) is calling for EVs to be subject to a cost-per-distance charge, and for combustion-powered vehicles to be subject to both this and the existing fuel excise.

The group had previously proposed a mass by distance road-user charge (RUC) that would apply to all vehicles, but replace the fuel excise rather than exist in tandem with it.

The volunteer-run, not-for-profit organisation wants a RUC to be either introduced gradually over a 10-year period and reach a cost of three cents per tonne-kilometre, or alternatively apply only to vehicles manufactured after 2021.

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It wants any RUC to apply across all states and territories to all road-going vehicles with a gross vehicle mass (GVM) under 4.5 tonnes, but eventually be extended to heavy vehicles.

It says in the case of a 2.2-tonne diesel-powered ute or electric SUV driving 13,000km per year, the annual RUC payable would equate to $858.

The AEVA says this system should incentivise lighter, more efficient vehicles by taking mass into account, with combustion-powered vehicles remaining subject to the fuel excise which will serve as a “highly efficient pollution tax”.

“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.”

Revenue from the fuel excise – ordinarily set to approximately 53c/litre for petrol and diesel – equalled $25 billion in 2023-24, though not all fuel excise revenue goes to funding our nation's roads and infrastructure. In the same year, over $44 billion was spent by all levels of government on road infrastructure.

Fuel excise revenue collected from petrol sales has declined by almost $200 million annually since 2009, though this has been offset by increased revenue from the sale of diesel fuel.

Dr Jones criticised the New South Wales government’s EV-specific RUC, set to be imposed in 2027, which doesn’t take into account vehicle mass and doesn’t impact non-EV vehicles.

“The NSW model means an EV would pay more per kilometre than a conventional petrol hybrid,” said Dr Jones.