South Australians who are looking to buy an electric vehicle after 1 July 2021* will have to pay an extra tax. SA is the first state in Australia to introduce a road user charge for EVs to replace lost fuel excise.
Fixed and variable charge
The new tax on EVs will probably include a fixed charge and a variable charge that depends on distance travelled. EV drivers will need to keep a logbook of their driving each year. Currently only 1% of vehicles in SA are electric. This means the government will raise only $1 million or $400 per EV, in the first year.
Some states in the US, such as California and Washington, are also trialling this type of EV charge. However, EV proponents argue this is because they had in the first place offered subsidies and tax incentives to encourage people to buy EVs.
SA will be the first place in the world to create an apparent financial disincentive to buy EVs.
More than financial
An Ernst & Young study for the Electric Vehicle Council in September 2020 found the average EV owner already pays more federal and state tax than other vehicle owners – even without paying fuel excise.
Researchers found the government would receive net revenue of $137 per EV each year and $8,763 over 10 years. On top of the financial benefit, they also lower pollution, reduce noise and improve respiratory health.
Victoria quickly followed with a similar road user charge for EV owners, beginning in July 2021. Fully electric EVs will be 2.5 cents per km while plug-in hybrids will pay 2 cents per km. New South Wales is expected to follow suit.
It’s part of a wider plan to introduce road user charging for all vehicles, rather than continue with the outdated system of registration and fuel excise.
* Since delayed until 1 July 2027