Victoria will follow South Australia with a per-kilometre usage fee for pure electric and plug-in hybrid cars.
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Victorian will follow South Australia’s lead and impose a tax on electric vehicles from 2021.

Dan Andrews’ Labor Government confirmed it would charge owners of electric and plug-in hybrid vehicles a usage fee from July 2021.

Victorian Treasurer Tim Pallas confirmed the per-kilometre-usage-fee on Saturday afternoon.

Under the new laws, full electric vehicles would be charged 2.5 cents per kilometre travelled while plug-in hybrid vehicles would face a usage tax of 2.0 cents per kilometre travelled.

Using the average annual motor vehicle distance travelled of 15,000km (based on Australian Census data) that would mean electric cars would pay an additional $375 each year, while plug-in hybrids would face an additional $300 fee.

According to its data, the Victorian government anticipates raising around $30 million annually via the electric vehicle tax, although Mr Pallas said owners of such vehicles would continue to pay less to use the state’s roads than drivers of vehicles fitted with petrol or diesel engines.

“Even after the introduction of this charge for usage of our road network, people driving electric vehicles will pay between 40 and 45 per cent less than motorists driving in a car fuelled by petrol or diesel,” said Mr Pallas.

The new charge has been brought in to offset the loss of revenue collected from the sale of petrol and diesel.

Currently, 42.3 cents from every litre of petrol and diesel sold at the bowser goes to the Federal Government. A portion of that – between 40 and 50 per cent in recent years – goes towards national transport infrastructure. The balance of fuel excise goes into consolidated revenue.

Electric Vehicle Council CEO Behyad Jafari was critical of this latest tax on electric vehicles, stating it was “built on a myth”.

“Fuel excise income is not quarantined for roads and will drop in the long run,” said Mr Jafari. “But as we shift away from petrol and diesel, diseases linked to air pollution and other costs associated with climate change will also decrease.

“Why would you tax a technology that will drive profound savings and economic benefit? Now is the time to be encouraging EVs, not holding them back with a new tax.”


Mr Jafari added the new charges could dis-incentivise buyers looking to make the switch to electric mobility.

The Victorian Government’s move to apply a usage charge on electric and plug-in hybrid vehicles comes a week after the South Australian government confirmed it would introduce an electric vehicle levy from 2021.

It also comes in the same week the Australian Capital Territory government promised to introduce free registration and interest-free loans for new electric-car buyers.