Here’s my probably unpopular take on Victoria’s proposed 2.5 cents per kilometre Electric Vehicles charge:
Even with the tax it will still be cheaper to drive an EV than a petrol car. (In terms of taxes, about 2 cents per km cheaper, the state government claims, plus of course the huge overall saving in fuel costs).
We do need to transition to EVs, but the barrier is purchase price (around $20K higher than a conventional car) – not a small additional running cost.
I went through this when buying a new car a couple of years ago. It was looking like ~$20K for a petrol car, $30K for a hybrid, and $45K for an EV. For most people, including myself, that’s a significant barrier to EVs, even if they are cheap to run and maintain.
Nobody who buys a $75K Tesla (or even the cheapest EV, a $45K MG) is going to credibly claim that ~$350/year is going to send them broke… though a few seem to be implying it.
The cheapest Tesla costs about $67,000.— Daniel Bowen (@danielbowen) March 13, 2021
Sorry, but a Tesla owner crying poor about the Vic EV tax (average $330/year) gets very little sympathy from me. https://t.co/GpsZikp3r1
However the argy-bargy over this has the State negotiating with the cross-benchers, which might result in purchase incentives.
EVs should also be cheaper to register. This is a State responsibility, and they already offer $100 annual discount. Perhaps this discount should be increased further?
Whatever the incentives to own one, EVs shouldn’t be free to drive. They cause congestion and road trauma and most of the other problems of petrol vehicles.
There are some issues with the proposal. The obvious one is it arguably sends the wrong signal towards prospective EV buyers. It’s not clear if any exemptions would be granted for people who substantially drive interstate. It’s a blunt instrument – not factoring in things like congestion. And the burden is on EV drivers to keep records for 5 years, as they may be audited.
But the main plus is that this is a way that Victoria can move towards a pricing model that helps discourage excessive driving.
It’s not like EVs are actually environmentally friendly. They’re still cars, causing all the problems that cars do – except for tailpipe emissions. At best they are less environmentally damaging than petrol cars.
And some fear that EVs may be a threat to action on walking, cycling and public transport.
For years the State Government has rejected any form of road pricing – even a central city congestion charge. This is politically expedient, but from a policy perspective is very short-sighted.
The simple conclusion here is that they’re playing the long game. This is a way of getting it in, but also covering for lost petrol excise tax. It doesn’t pay the cost of roads, but it helps. Initially only a few people will be paying it, but in the next 20 years, it’ll be most of us. Treasurer Tim Pallas has said as much:
Mr Pallas said he wants to establish a user-pays structure that will avoid a future dilemma where electric vehicles dominate new car purchases but owners pay little to no tax.The Age 17/3/2021
For the State, it’s about protecting the revenue base. But sustainable transport advocates should welcome it as a move towards a cost to driving more often.
Ultimately if the proposal passes, we’ll have a future situation where there’s an obvious cost of hopping in the car for every trip – which will help people better consider their travel choices. And that will be no bad thing.
More reading: PTUA: Myth: Electric vehicle owners pay more tax, so shouldn’t be charged to use roads