Leaked reports show governments were warned EV taxes would hurt uptake

Leaked reports show that governments were warned that the introduction of new taxes targeted at electric vehicle users will significantly discourage the uptake of zero emissions vehicles and spark strong opposition from environmental and transport industry groups.

The reports, prepared by the Board of Treasurers, an intergovernmental group made up of representatives from each of the Australian states and territories, examined the impacts of the potential ‘road user charges’ in electric vehicles, as are being considered by Victoria and South Australia, to boost government revenues.

The Board of Treasurers warned governments that such measures were ‘likely to discourage [zero emissions electric vehicle] uptake’ and ‘impede government process on transport sector pledges’ to reduce emissions.

The report also warned that the implementation of such charges would face ‘strong opposition from industry and environmental stakeholders’, a warning that has already proven true in light of the backlash from the industry in response to the proposals.

Several state governments are considering the introduction of road user charges for electric vehicles, to account for a reduction in fuel excise revenues, as electric vehicles owners do not need to pay for fuels, the price of which contain a component of tax.

Governments have argued that some form of tax would be necessary to secure funding for road and infrastructure upkeep, but electric vehicle advocates have responded by saying the proposed road user charges are poorly designed, often impose higher taxes than those that would be paid through equivalent fuel tariffs, and would undermine efforts to support greater electric vehicle uptake.

Advocates have also argued that the introduction of a new tax targeted at electric vehicles also ignores the wider community benefits of zero emissions transport, including reduced emissions and avoided air pollution.

Director of the Australia Institute’s climate and energy program, Richie Merzian, said the report showed that there were substantial risks created by the proposed introduction of new taxes on electric vehicles.

“Privacy issues, practical difficulties, constitutional concerns and discouraging the uptake of EVs are just a few of the problems highlighted in this discussion paper,” Merzian said.

“EVs are a cleaner, quieter and safer transport alternative. Now is not the time to put a great big new tax on this emerging industry. Governments need to hit pause on this half-baked policy proposal and come back after undertaking proper consultation with industry representatives and the community.”

“It is ironic that states with net zero emissions targets are now pulling the handbrake on reducing pollution from one of the highest emitting sections,” Merzian added.

The report also warns that the introduction of road user charges in some states, could see electric vehicle owners transfer their registration to states without such charges, creating an issue of registration ‘leakage’ that could ultimately amplify the issue of reduced government revenues.

Governments are considering a range of ways of monitoring and enforcing such road use taxes, including the use of odometer reporting, through to the installation of GPS tracking devices on vehicles.

The leak reports say that the use of GPS trackers on electric vehicles would enable greater levels of automation in reporting, as well as enabling time-of-use and location based concessions, but would raise substantial privacy and security issues, that may undermine any community acceptance of a road user charge.