"Road user fees for electric vehicles face opposition: A heated debate ensues"
The Australian government is actively moving forward with plans to introduce a road user charge for electric vehicles (EVs), aiming to replace declining fuel excise revenue as EV adoption grows. This charge would require EV drivers, who currently do not pay fuel excise, to contribute to road funding based on their road usage[1][2].
Key recent developments include:
- Federal Treasurer Jim Chalmers has placed the EV road user charge high on the tax reform agenda after an economic summit in August 2025, with strong conceptual support but no finalized model yet[1].
- The proposed charge might be around 2.874 cents per kilometre for battery EVs and slightly less for plug-in hybrids, indexed to inflation[3].
- This policy response follows the High Court ruling that state EV levies are unconstitutional, leaving the Commonwealth responsible for implementing a national scheme[2].
- Industry and EV advocates acknowledge the need for a fair contribution to road funding but warn that the charge should not hinder the transition to electric vehicles[5].
Regarding impact on EV uptake:
- Introducing EV road user charges could increase the cost of owning an electric vehicle, effectively reducing some of the financial incentives that have encouraged uptake.
- Nonetheless, the government appears to be balancing revenue needs with the goal of sustaining Australia's EV transition, suggesting that charges will be phased in carefully[1][3][5].
In summary, Australia is moving toward a national EV road user charge to address lost fuel excise revenue, with plans still under development as of mid-2025. While this may raise the operating costs of EVs, policymakers and industry stakeholders emphasize that it should not stall the broader shift toward electric vehicles.
Notably, New Zealand already has a road user charge scheme for EVs based on vehicle weight and distance driven. Frontbencher Tanya Plibersek suggests the idea of a tax for EV users makes sense, while some federal frontbencher view it as a "sensible" solution for funding road maintenance as more people switch to electric vehicles[4].
However, the Electric Vehicle Council recommends that reforms should only apply once electric vehicles reach 30% of new vehicle sales, and the federal treasurer is being urged to adopt user charges for electric cars[6]. The Victoria's proposal for a two cent per kilometre charge on EV users in 2023 was overruled by the High Court, effectively banning states from implementing a road user charge[7].
As Australia faces the challenge of providing infrastructure to support its growing population and economy, the introduction of road user charges is seen as a necessary step to ensure that EV owners contribute fairly to road funding[8]. EV owners, on the other hand, are urging the government not to slow the transition from internal combustion engines[9].
References: 1. ABC News 2. The Guardian 3. The Australian 4. SBS News 5. The Conversation 6. Electric Vehicle Council 7. The Age 8. Infrastructure Partnerships Australia 9. EV Owners Australia
- The Australian government's plan to introduce a road user charge for electric vehicles (EVs) is supported by Federal Treasurer Jim Chalmers, who views it as a key point in tax reform following an economic summit in August 2025 [1].
- The proposed amount for the EV road user charge could be approximately 2.874 cents per kilometre for battery EVs, with a slightly lower charge for plug-in hybrids, adjusted to match inflation [3].
- A national EV road user charge scheme is necessary as state EV levies were declared unconstitutional by the High Court, leaving the Commonwealth to implement a national scheme [2].
- The environmental-science and technology sectors, as well as electric vehicle advocates, acknowledge the need for EV drivers to contribute to road funding but remain cautious about the charge as it could slow the transition to cleaner energy and sustainable transportation [5].
- The business sector, including Infrastructure Partnerships Australia, supports the introduction of road user charges for EVs as a means to provide fair funding for public-transit systems and transportation infrastructure, crucial for supporting Australia's growing population and energy-efficient economy [8].
