The Australian government is moving forward with plans to introduce a national road user charging system for electric vehicles (EVs), with Prime Minister Anthony Albanese confirming the reform will be discussed at a productivity roundtable in Canberra next week. The move comes as new data from the Australian Automobile Association shows that EVs accounted for nearly one in ten new car sales in the June quarter, a record high.
The government has flagged the need for a sustainable revenue source for roads, as declining fuel excise revenue—currently 51.6 cents per litre—continues to impact the federal budget. A 2023 High Court ruling struck down Victoria's attempt to impose a state-level EV tax, ruling that only the federal government can levy excise taxes on consumption. Since then, state and federal treasurers have been exploring alternative ways to tax EV drivers.
Prime Minister Albanese stated on Wednesday that a realistic and implementable plan is needed. 'What I believe is that we need money to ensure that roads are adequate and that is a long held belief,' he said. Treasurer Jim Chalmers noted that Labor had flagged the potential for new EV rules before the May election, but added that no model or timing has been settled yet.
Industry representatives have urged caution. Scott Maynard, managing director of Polestar Australia, called for a broader review of the transport ecosystem rather than adding another charge on top of existing taxes such as stamp duty, registration, fuel excise, and tolls. The Productivity Commission has previously recommended road user charges that reflect the efficient cost of providing and maintaining infrastructure, giving drivers a clear incentive to use roads more efficiently.
The Australian Automobile Association's quarterly EV Index reported that Australians bought 29,244 new battery electric vehicles in the June quarter—a 63% increase from the previous quarter, reflecting the accelerating shift to electric mobility in the country.
