Victorian government to impose an electric vehicle tax for drivers

Following new legislation introduced last week, Victoria is about to become the first state in Australia to impose a tax on electric vehicles (EVs) and other zero-emission vehicles. 

The new tax is set to come into effect on July 1 and will cost EV owners 2.5 cents per kilometre and two cents per kilometre for hybrid vehicles. It’s estimated that the total cost for EV owners will be up to $300 every year at registration time. 

Victorian Treasurer, Tim Pallas explained that the decision to introduce the tax on EVs was to ensure that all Victorian drivers were treated equally while creating a sustainable road network. 

"We are providing confidence to new electric vehicle owners with a massive boost to our charging network, funded by the distance-based charge, which will reduce range anxiety as a key barrier to take-up," he said.

However, not everyone is on board with the new initiative, Greens MP, Sam Hibbins said the argument for the EV tax was not justifiable and was nothing more than a “tax grab by the government”.

Aussies are fans of EVs, so what’s stopping us?

According to the 2020 State of Electric Vehicles Report, only 3,266 electric vehicles were purchased at the start of 2020. 

Despite the slow uptake, the same report found that more than half (56%) of Australians would consider purchasing an EV as their next car, citing ‘environmental benefits’ and ‘lower maintenance costs’ as their top two reasons.

What’s more encouraging is that 46% said that if they were able to acquire an EV, they would use renewable energy to charge it.  

But unfortunately, the cost of an EV and easy access to charging stations continue to hold Aussies back from picking up one of their own, as in July 2020, Mozo reported that the upfront cost of an EV was upward of $50,000. 

Behyad Jafari, the chief executive officer for the Electric Vehicle Council, says that to make EVs more financially accessible to the average Aussie driver, increased government support is essential. 

“If we had politics that really backed the electrification of our fleet, and people understood the government was behind the transition, we could be actively transforming our cities and our economy,” he said. 

If you’d like to learn all the ins and outs of EV’s, have a read of our electric vehicle guide!