Major electric vehicle manufacturers, charging suppliers and industry groups have issued a joint declaration that the Victorian government’s plan to tax electric vehicles is the “worst EV policy in the world”.
The joint letter, published in newspapers on Thursday, says that no other jurisdiction in the world has implemented such a standalone tax on electric vehicle use.
“No other jurisdiction has introduced such a targeted levy on the cleanest vehicles on the road without significant incentives to balance it out,” the letter says.
“Most industrialised countries are prioritising incentives for electric vehicles to benefit from cleaner air and new jobs from a growing industry. This new tax means the world’s manufacturers are far less likely to send Victorians their best, most affordable, zero emissions vehicles.”
The letter was co-signed by a group of 25 organisations, including vehicle manufacturers Hyundai, SEA electric, Custom Denning and Volkswagen, and by charging infrastructure providers Tritium, Jet Charge and ChargeFox. The group was joined by a number of industry organisations including the Electric Vehicle Council and the Transport Alliance of Australia.
CEO of the Electric Vehicle Council, Behyad Jafari, said the the proposal to hit electric vehicle drivers in Victoria with a tax of 2.5 cents for every kilometre driven would act as a disincentive to buy electric vehicles.
“Victoria is already massively behind comparable jurisdictions in the US, the UK, and across Europe in terms of electric car uptake. This tax will exacerbate the yawning gap,” Jafari said.
“Far from being on track to achieving net zero emissions by 2050, emissions from transport are rising in Victoria. This is the wrong time to tax zero emissions vehicles.”
National Director of Solar Citizens, Ellen Roberts, who co-signed the joint letter, said that the Victorian government should be looking to support the purchase of new electric vehicles, in the same way it had been supporting the installation of rooftop solar across the state.
“The Victorian Government is helping households install cleaner solar energy, and they should be leading the charge and making it easier for Victorians to invest in cleaner transport,” Roberts said.
“Just like rooftop solar, we want to see electric vehicles become more affordable for everyday Australians. But this tax on cleaner vehicles will just jam on the handbrake.”
The Victorian government has proposed new legislation that would levy a per kilometre tax on electric vehicles and plug in hybrids. The tax would see a 2.5 cent per kilometre tax applied to electric vehicles and other zero emissions vehicles, as well as a 2 cents per kilometre tax charged to plug-in hybrid vehicles.
The Victorian state government argues the tax is necessary to recoup revenues that would otherwise be paid by drivers of petrol vehicles through fuel tariffs. The electric vehicle tax could add around $330 a year to the cost of running an electric vehicle, for the average driver.
But electric vehicle advocates say the proposal ignores the wider public benefits of switching to electric vehicles, including reduced air pollution and greenhouse gas emissions.
The Australia Institute’s climate and energy program director, Richie Merzian, labelled the plan as “absurd”.
“Penalising electric car owners because they don’t consume petrol that pollutes the atmosphere and our environment is absurd,” Merzian said.
“Our research shows that there are a range of policies that support the uptake of EVs which are very popular the public. These include offering loans for electric vehicle purchases, building more charging stations and removing the Luxury Car Tax on zero emissions cars.”
“It is somewhat disingenuous to suggest that roads are funded by the fuel excise, as those funds collected by the Federal Government and goes towards general revenue. If the State Government is looking to increase revenue, there are far better ways to go about it that don’t disincentivise the use of electric vehicles.”
The letter was issued ahead of public hearings in Melbourne for an inquiry into federal legislation proposed by the Australian Greens that would work to nullify any moves to tax electric vehicles.
Under the proposed legislation, grants of funding provided by the federal government to Australian states and territories would be reduced by an amount corresponding to revenues generated by taxes levied on electric vehicle users, cancelling out any benefits to state government revenues.