EV Lobby Pushes for Double Tax on Fossil Fuel Drivers
A major Australian electric vehicle group wants to keep fuel taxes while adding a new distance-based fee, a move that would significantly raise costs for petrol and diesel owners.
The Australian Electric Vehicle Association has updated its policy stance, advocating for a new road user charge that does not replace the existing fuel excise. This approach would result in double taxation for drivers of petrol, diesel, hybrid, and plug-in hybrid vehicles. The group argues that this financial pressure is necessary to accelerate the shift away from internal combustion engines.
Currently, the fuel excise generates roughly $25 billion annually for the budget, but revenues have declined as vehicles become more efficient and electric models gain market share. By maintaining the fuel tax while introducing a distance-based fee, the association aims to ensure that fossil fuel drivers pay for both their road usage and the environmental impact of their emissions. This strategy contrasts with previous proposals that sought to swap one tax for another.
Calculating the New Road Charges
According to policy details reported by GN auto tech/ev: electric vehicle, the proposed rate is 3 cents per tonne-kilometer. For an average 2.2-tonne vehicle traveling 13,000 kilometers a year, this translates to an additional annual cost of approximately $858. The association claims this rate is fair because it mirrors the average fuel excise cost per kilometer, ensuring that the new charge reflects the actual weight and distance impact on infrastructure.
Dr. Chris Jones, the group’s policy convenor, emphasized that while weight-based charges should be equal for all vehicles, those burning fossil fuels should also bear the cost of pollution. This distinction is central to the lobby’s argument, positioning the extra tax as a penalty for environmental harm rather than just a standard infrastructure fee.
Criticism of State-Level Models
The association has also criticized the New South Wales government’s upcoming road user charge, which is set to begin in 2027. Under the current NSW plan, electric vehicles would pay a higher rate per kilometer than conventional petrol hybrids. The lobby group argues this is inequitable, noting that an electric motorcycle would pay the same as a heavy electric SUV, despite the much lighter impact on road infrastructure.
This critique highlights a broader tension in how different jurisdictions approach the transition to electric mobility. While some policies aim to level the playing field, others may inadvertently penalize the very technology they seek to promote. The AEVA’s proposal seeks to correct what it sees as a misalignment in current state policies.
Political Context and Market Shifts
Federal Treasurer Jim Chalmers previously floated the idea of a national road user charge, but the initiative has been paused. Transport Minister Catherine King indicated a preference for measures that encourage fuel efficiency over direct taxation. Meanwhile, electric vehicles became the most popular fuel source in the new-car market last month, outselling petrol and diesel models individually. This surge is attributed to rising fuel prices and a wider variety of efficient options in showrooms.
The push for double taxation comes at a time when the market is already shifting toward electric options. Critics argue that such aggressive fiscal policies may face significant public resistance, especially among average drivers who are already feeling the pinch of high fuel costs. The outcome will likely depend on how policymakers balance revenue needs with consumer acceptance.
