Victoria’s misguided numbers imply that electrical autos pay extra taxes than gasoline ones

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Victoria’s controversial plan to charge battery electric vehicle drivers 2.5 cents per kilometer means they often pay more taxes than gasoline car drivers, the EV Council warned.

The Labor Andrews government plans to introduce the road user tax in July. It is claimed that the figure of 2.5 cents per kilometer is reasonable as it is much lower than the equivalent the average motorist pays for an internal combustion engine, which is 4 cents per kilometer. Plug-in hybrid drivers pay 2 cents per kilometer.

The government says the road toll is necessary to ensure that EV drivers contribute to road maintenance instead of the fuel consumption tax. It is argued that this lower rate means there is still an incentive to drive electric as you will pay less tax.

However, Behyad Jafari, executive director of the EVC, says this is not true. He says the 4 cents per kilometer figure is based on cars that are 11 years old. New cars, he says, are much more economical, which means there are plenty of new cars out there that pay less than 2 cents per kilometer.

He says the Toyota Yaris, which sold around 5,000 units last year, about as much as the total number of battery-electric vehicles, pays just 1.2 to 1.4 cents per kilometer.

While Jafari doesn’t deny that older gasoline cars pay more, he says the only meaningful comparison for electric vehicles is with new cars – because an electric vehicle itself will almost certainly be a new car.

“If you have a new electric vehicle, which is a new car that is sold with new gasoline vehicles today, around 100,000 vehicles were sold last year that used less than 2.5 cents per kilometer of fuel.

“Fuel consumption tax is a factor in fuel efficiency. The more economical your vehicle, the less fuel you use and the less excise tax you pay. “

He said he had discussed this with the treasurer’s office and they were “surprised to find out”.

“Obviously they hadn’t worked on how fuel consumption taxes work. We know that last year or last year there was a lobby group that said the average was 4 cents per kilometer. And so clear that the treasurer has just recorded this number and is running with it. “

He said he had raised this point several times but it made no difference to politics and the legislation had the figure of 2.5 cents written on it.

The legislation is to be voted on in May. If passed, it will become law on July 1st. The Victorian government expects the average EV driver to expect around $ 330 a year, while the average plug-in hybrid driver can expect around $ 260 a year (plus excise tax) a lot They consume fuel).

However, success is not assured. While the Andrews government has a massive majority in the House of Commons, it will depend on the support of independents and smaller parties in the House of Lords. The liberal opposition has ruled out supporting them.

Jafari says the majority of crossbenchers are currently against the bill, which means the government will likely have to make some concessions to enforce it. He is confident that this could include further incentives to support the uptake of electric vehicles.

The tax has been widely criticized as a perverse incentive to introduce electric vehicles in a country that already has no incentives. According to Jafari, Victoria’s decision to move forward regardless is more about wrestling control of road taxation by the federal government, which controls fuel consumption tax, than trying to prevent the uptake of electric vehicles. But he says electric vehicles have gotten into the crossfire in this battle for control of a potentially highly lucrative tax revenue.

James Fernyhough is a reporter for RenewEconomy and The Driven. He has worked at The Australian Financial Review and the Financial Times and is interested in anything to do with climate change and the transition to a low carbon economy.