Companies Criticize Victoria, Australia’s 'Worst EV Policy'

The state government of Victoria, Australia, is considering imposing a punitive mileage tax on hybrid vehicles. In a full-page ad in Melbourne's The Age newspaper, a group of groups, including Hyundai, VW, Uber, ABB, WWF, among others, have spoken out against the plan, calling it the "worst electric car scheme in the country."

The Victorian government actually levies no such tax on petrol cars - in fact, no gas tax is assessed at all. There are also no clear electric car incentives to offset the proposed tax.

Tax for Electric Vehicles

The tax would be assessed at 2.5 cents per kilometer and collected at the time of registration renewal. Drivers of electric cars will be required to keep logs for five years, with fines if they failed to do so. There is no such mileage log provision for gas car users, which places a time and expense pressure on EV drivers.

The average Australian car travels 13,300 kilometers a year, so the annual tax will be $332, or $255 in the United States. This is better than the electric vehicle fee in the United States. However, considering the irrationality of these EV taxes, which we and others have discussed many times, some of these states do offer EV benefits. There is no such EV-specific reward in Victoria.

Even if the expense per owner is better than what we've seen in the United States, it won't be enough to cover a large portion of the deficit. Victoria now has over 6,000 hybrid cars registered throughout the province, so you can foresee a yearly support of 1-2 million dollars. Not including administration costs for the new levy, that's enough to create around one new kilometer of lane. Victoria, by contrast, has over 155,000 kilometers of road.

Open Letter from Businesses

In their open letter, businesses seized on this fact, claiming that Victoria will be the first in the world to impose an EV tax without any countervailing benefits to promote EV possession. These businesses, which included several manufacturers, said that the payments would make automakers less willing to bring their best new cars to Victoria, jeopardizing the state's ability to achieve its carbon targets, which it has been deferring.

According to the Victorian government, these taxes are essential because electric vehicles do not pay petrol taxes and therefore do not contribute to road financing. However, Victoria does not collect a petrol tax; the Australian federal government collects the tax.

No Need for Unnecessary Tax Charges

And, because Australia's road funding isn't entirely derived from gas taxes, the notion that there is a clear and necessary link between gas taxes and road funding is false - mainly because road harm isn't caused by passenger vehicles. Big trucks, for all intents and purposes, cause nearly all road harm. A fully loaded semi-truck does 10,000 times more road damage per mile than a passenger vehicle, according to the fourth force law.

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