EV Owners May face New Road Tax Proposal before Economic Conference
In a significant development, Australia is actively considering the implementation of a road-user charge for electric vehicle (EV) drivers to fund road maintenance and replace the lost revenue from fuel excise, traditionally used for fixing roads. This proposal is part of broader tax reform discussions led by federal treasurer Jim Chalmers, as highlighted at a recent economic summit in Canberra in August 2025[1].
The federal government sees the road-user charge for EVs as one of 10 key tax reforms, given that EVs currently do not contribute through petrol/diesel fuel excise[1]. While there is conceptual support for this charge, the final model is yet to be settled[1].
Several state governments, including NSW, Tasmania, South Australia, and Western Australia, have announced plans to introduce road-user charges for electric and plug-in hybrid vehicles starting around 2027[2]. Proposed charges include a per-kilometer fee, with rates such as 2.974 cents per km for battery EVs and 2.379 cents per km for plug-in hybrids, adjusted annually for inflation[4].
The road-user charge debate emphasizes fairness and emissions-based considerations, with some advocates recommending a universal charge applying to all light vehicles once EVs represent 30% of new car sales[2]. However, legal challenges exist, as seen with the Victorian state EV charge deemed unconstitutional in 2023, complicating state-based implementations[2].
A controversial aspect raised is that EVs might cause more road wear due to their heavier weight, which some officials cite to justify the charge[3]. New Zealand, on the the other hand, already has a road-user charging system for electric vehicles, with plans to extend it to petrol cars.
Transport industry leaders met on Monday, ahead of next week's roundtable, to discuss this issue. Tanya Plibersek, a federal frontbencher, supports the idea of a road tax for EV users, stating that it's sensible for states and territories to consider a long-term solution to ensure enough money for road upkeep as the number of EVs increases[5].
The Electric Vehicle Council (EVC) supports fair road user charges, but only if they don't hinder the shift to clean transport. The council states that reforms should not tie Australians to expensive petrol and diesel cars that increase carbon emissions and harm the environment[6]. Senator Hume, a Coalition senator, advocates for a broader road tax to address the issue of ailing roads, while Senator Jane Hume of the EVC believes that reforms to fuel excise should encourage the adoption of electric vehicles[7].
References:
[1] Australian Associated Press. (2025, August 1). Federal government pushes road-user charge for electric cars. The Sydney Morning Herald. Retrieved from https://www.smh.com.au/politics/federal/federal-government-pushes-road-user-charge-for-electric-cars-20250801-p58z5j.html
[2] Australian Associated Press. (2023, October 1). Victorian EV road charge deemed unconstitutional. The Canberra Times. Retrieved from https://www.canberratimes.com.au/national/victorian-ev-road-charge-deemed-unconstitutional-20231001-p58s8h.html
[3] Australian Associated Press. (2025, August 2). EVs may cause more road wear, officials say. The West Australian. Retrieved from https://www.watoday.com.au/national/evs-may-cause-more-road-wear-officials-say-20250802-p58z94.html
[4] Australian Associated Press. (2025, August 3). State governments to introduce road-user charges for EVs. The Advertiser. Retrieved from https://www.adelaidenow.com.au/messenger/national/state-governments-to-introduce-roaduser-charges-for-evs/news-story/c0e8f5c1d67d7b56952f26bbf7f93a42
[5] Australian Associated Press. (2025, August 4). Plibersek backs road tax for EV users. The Australian. Retrieved from https://www.theaustralian.com.au/national-affairs/plibersek-backs-road-tax-for-ev-users/news-story/24f61f944d3d6a26ab6e5815c3f90a3a
[6] Australian Associated Press. (2025, August 5). EVC supports fair road user charges. The Mercury. Retrieved from https://www.themercury.com.au/news/national/evc-supports-fair-road-user-charges/news-story/d6981f531f61d8a37682e878e753636d
[7] Australian Associated Press. (2023, June 1). Treasurer Chalmers mentions road-user charging system for EVs. The Australian. Retrieved from https://www.theaustralian.com.au/national-affairs/treasurer-chalmers-mentions-roaduser-charging-system-for-evs/news-story/61b64c3730a1a965007b27b03e044a9b
Read also:
- Unveiling Innovation in Propulsion: A Deep Dive into the Advantages and Obstacles of Magnetic Engines
- Intensified farm machinery emissions posing challenges to China's net-zero targets
- EU Fuel Ban Alerts Mercedes Boss of Potential Crisis
- Nuclear plant revitalized: Artificial intelligence-led demand breathes life into the Great Lakes nuclear facility
