Road tax for electric cars?
The Australian state and federal governments know that EV users pay far more than their fair share of vehicle use tax which contributes to road infrastructure, so what's the real reason they want to introduce an EV tax?
Electric Vehicles (EVs) are taking over, although living in Australia, you might not think so.
The Greek government has announced extensive subsidies encourage EVs. The goal is for every third vehicle to be electric by 2030 as the country invests in charging infrastructure.
The USA, in 2010 implemented a program that offers up to $7500 in tax credits to purchasers of electric vehicles. The purpose of the program is to encourage people to buy more fuel-efficient vehicles by bringing the price of EVs down closer to that of internal-combustion vehicles
Norway became the first country to sell more electric cars than petrol, hybrid and diesel engines put together in 2020, with EVs accounting for two-thirds of sales in the final months of 2020.
Norway has one of the world’s most ambitious green targets, planning to phase out sales of all new fossil-fuel vehicles by 2025, five years earlier than the UK.
Their incentives and exemptions include:
- No vehicle purchase tax
- No VAT – usually 25%
- Zero road tax
- Free parking in some municipal car parks
- Reduced tax on company electric cars (at a lower rate than fossil-fuel vehicles)
- Reduced or free tolls in some areas
- Driving in a bus lane if carrying a passenger
- 50% or 100% discount on some car parks, tolls and ferry fares
As a result, the number of electric cars sold has soared, from 3% of total sales in 2012, to 54% in 2020.
So, what is Australia doing to encourage the clean air alternative to fossil cars? Nothing. Actually, that's not true, Australia is doing less than nothing. They are looking at introducing an EV tax! Governments will tell you that the reason is
"Because EV owners don't pay fuel excise which helps fund roads". But that isn't true, and they know it.
Fuel excise does not ‘pay for our roads’
Just like every other tax, it goes into what’s called ‘general revenue’, which is from all of our taxes. Our roads are then paid for from that.
'The government doesn’t, and can’t, segregate revenue from road use to spend on roads. Federal spending on infrastructure is funded from general government revenue, the pool of funds received from the full range of federal taxes.' - Gratton Institute
What does the maths say?
- A Toyota Corolla includes a tax component of about $3,200.
- A Hyundai Kona Electric includes a tax component of about $9,315.38
(GST: $6136.95, Stamp Duty: $2704 and Luxury Car Tax: 475.38).
- The electric car owner pays $6,115.38 more tax when they buy an EV.
So, which car owner has paid more tax in the long term, being tax money available to be spent on roads?
- Fuel excise is currently around $0.423 per Litre.
- The Corolla has a Combined efficiency rating of 6L per 100km.
- Australians drive an average 13,400km per year.
That means the Corolla is paying $340 every year in fuel excise that the Tesla doesn’t have to pay.
But remember, the Tesla driver has already paid an additional $30k in taxes up front.
To work out even, the Corolla driver would have to keep driving for 18 years before it ends up paying the same tax.
Given that EV drivers won't keep a car for 18 years, an EV driver pays a lot more taxes.
- Doctors tell us around 1,715 people die each year from vehicle exhaust fumes and many more get sick. That’s more than the number of people who die from crashes.
- We spend $16bn importing fuel to the country, to say nothing of the cost of sending warships to protect supply lines.
Roads are paid for by the general government revenue - i.e. from ALL the tax we pay, not just fuel excise. EV Owners pay more vehicle generated tax than fossil car owners.
If anything, EV owners should be rewarded for paying more, and not polluting the air, not charged an extra fee!
So the question that remains is what is the real reason the governments want to introduce this EV tax?
One muppet who should resign because he is either too stupid for his job, or has been bribed to support this is Nicholas Platt of RACV.
Senior engineer, Nicholas Platt, says the EV levy lays the foundation for a fair and efficient user-pays system to replace existing federal and state road taxes.
He explains that where motorists driving conventional petrol-fuelled cars currently pay a fuel excise of about 42 cents a litre, which funds road maintenance and infrastructure, electric vehicles avoid the charge – even though they use the same roads.
“As the number of zero-emissions cars on our roads continues to grow, the EV tax will make up for lost fuel excise, so authorities can continue to fund and maintain Victoria’s roads,” he says.
Nicholas, you're not seeing the big picture, nor do you understand how roads are paid for, or how much extra tax EV users pay already. Or maybe you do, and you've been paid to lie to the public.