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Image by David Waterworth


Looking More Closely At Victoria’s Road Usage Tax For Electric Vehicles

Recently, Victoria became the first jurisdiction in the world to introduce a road usage tax for Plug In Electric Vehicles. Other states are planning to follow here in Australia. Victorian EV owners were coerced into sending their odometer details to the government so that the tax can be calculated. If they do not comply, they are threatened with the cancellation of their registration.

Do I want yet another tax? No. Do I think it has been implemented at the right time (when only 2% of vehicle sales in Australia are electric)? No. Do I think the matter has been handled in a caring and courteous way? Definitely not!

However, when you do the math, it isn’t a great imposition.

From a financial point of view: the tax is 2.5 cents per km. An average Australian driver does 15000 km per year. Hence, the cost per year would be = $375 ($31.25/month). This is a very small cost. Weigh against this the cost benefits of an EV. In my case, I have gone from a V6 registration (over $1000) to a four cylinder registration ($600) — plus, on 15000 km driven, I would be paying roughly $1000 state tax on the petrol my car used and another $1000 federal tax. Against this, $375 is a small amount.

The people who are really feeling the pinch are the PHEV drivers — they have to pay the road usage tax and the petrol tax.

In case you hadn’t heard, petrol has hit $2 a litre in Australia, and the only suggestion being made in the media is to fill your tank before it goes up further. No mention of electric cars of course. The Ioniq a sign of the high demand for EVs here in Australia — 240 Ioniq 5 electric cars arrived the other day and were sold out within hours. There was lots of griping on Facebook about people missing out. Demand for EVs here is high; supply (apart from Tesla) is very limited.

To those who are complaining about this tax, and worse still, fighting it in the High Court, I would say: accept the tax graciously. In terms of PR, it might be a good thing. EV drivers in Australia are already being thought of as freeloaders because we don’t pay petrol tax. This view is pushed by politicians who want to perpetuate the lie that the petrol tax is used to build and maintain roads. 

I think fighting this minimal tax is counterproductive.

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Written By

David Waterworth is a retired teacher who divides his time between looking after his grandchildren and trying to make sure they have a planet to live on. He is long on Tesla [NASDAQ:TSLA].


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