Road user charges for electric cars are an “efficient source of road financing”

Road user charges for electric cars are an "efficient source of road financing"

The New South Wales Government says road pricing for electric cars will replace lost fuel tax revenue.

That New South Wales Government has outlined its implementation plans Road tolls for electric vehicles from mid-2027 to ensure that petrol-free cars pay for themselves without fuel tax revenues.

That Future traffic strategy says tolling electric cars will be a fairer way of funding the state’s roads, rather than relying on a portion of fuel taxes collected by the federal government.

Other state governments have considered — or plan to introduce — similar fees to ensure electric vehicles don’t get free rides.

Road pricing is primarily intended to make up for lost revenue from electric cars that don’t pay fuel taxes – a large chunk of which goes to national road funding.

As reported last year, the NSW government plans to introduce a per-kilometer road toll from 1 July 2027 – or when EV adoption in the state reaches 30 per cent.

Under the proposed scheme, electric car owners in NSW will pay a fixed rate of 2.5 cents per kilometer – while plug-in hybrid vehicle (PHEV) owners will be charged 2 cents per kilometer – instead of existing ongoing government costs such as registration, tolls and stamp duty.

These charges reflect similar charges announced in Victoria. Drivers of such vehicles have to fill out logbooks and are then charged accordingly.

NSW is currently offering a stamp duty exemption to all EVs priced under $78,000, while the first 25,000 EVs priced under $68,750 purchased after September 1, 2021 will receive a $3,000 rebate.

The NSW government’s 120-page Future Transport Strategy report suggests that road pricing will encourage drivers to switch from petrol and diesel-powered cars to electric vehicles.

“There is an opportunity to reduce congestion and improve travel opportunities by exploring clearer, fairer, more efficient and more sustainable charges,” the report said.

“Developing a roadmap for long-term reform of user contributions on road and public transport networks provides an opportunity to explore how we can influence travel behavior to match demand with the capacity of our existing networks.

“Any long-term reform must take into account the interactions with all modes of transport, the relationship with parking and equity considerations for customers with limited travel options.

“NSW is leading road pricing reform to support the transition to electric vehicles. This will help provide a sustainable and efficient source of financing for road transport in the future without slowing down the adoption of electric vehicles.”

While Victoria became the first Australian state to introduce an electric car toll from 1 July 2021, the state government has been criticized for forcing plug-in hybrid owners to pay the per-kilometer tax on top of the Bowser fuel tax.

“We have no plans regarding congestion charges and this has already been raised when elements of the document were published. This is important in setting strategy for the future,” Mr Perrotett said, according to a report by The Sydney Morning Herald.

“(A road tax) is clearly the future, and ultimately you’re paying a tax today — stamp duty, fuel consumption — that’s where we are today as we move toward an EV (electric vehicle) future.

“As electric vehicles represent the future of road transport in Sydney, across the country and around the world, we know these new systems must keep pace with this choice.”

Jordan Mulach

Jordan Mulach was born in Canberra/Ngunnawal and currently resides in Brisbane/Turrbal. Jordan joined the Drive team in 2022 and has previously worked for Auto Action, MotorsportM8, The Supercars Collective and TouringCarTimes, WhichCar, Wheels, Motor and Street Machine. A self-proclaimed iRacing addict, Jordan finds himself either behind the wheel of his Octavia RS or berating his ZH Fairlane over the weekend.

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