Hot on the heels of MG releasing Australia’s most affordable pure electric car – the 43-grand drive-away ZS EV – two states did exactly what you’d expect blinkered governments to do. They proposed an ill-thought-out and poorly planned new tax.
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MG isn’t the only one either. Tesla has been plugging away in this country for years now, with little incentive other than its own to buy the product. If it wasn’t for the charging network that Tesla built initially, owning one would have been impossible. You’ve got BMW, Nissan, Audi, Mercedes-Benz, Jaguar, Hyundai and Mini in market, with Volkswagen soon to join the fray as well. So even though the percentage ownership of electric vehicles is low, it won’t stay that way forever.

There is currently no incentive in Australia – no real incentive anyway – to make the move to an electric car.

Whether you want one or not, whether you think they are nonsense or not, whether you like them or you don’t, isn’t the point. Forget all that for the moment. Do we, or do we not, want more Australians to buy electric cars? That’s the first question we need to answer.

If that answer is yes, the next thing we need to do is work out the best way to make that happen. Price is obviously the biggest factor, but that will theoretically start to take care of itself, according to the manufacturers anyway.

Infrastructure is a problem in Australia, and will continue to be until we start to look forward rather than back. Yes, most electric car owners will set up so they can charge their car at home, but that won’t help them when they are out on the road needing a top-up. Ever tried to charge an electric vehicle at a public charger?

Outside of the Tesla Supercharger network (which is the best by a country mile), it’s more often than not infuriating.

The one thing that will surely discourage anyone from buying an electric vehicle of any kind, though, is the idea that they will be taxed almost for the sake of it.

This isn’t about forcing Australians to buy electric and work toward reducing emissions either. This is purely about whether we want to make electric vehicles attractive to buyers or not.

One thing is for sure – and we’ve seen it throughout 2020 with the knee-jerk responses to the pandemic and haphazard border closures – state-based ‘solutions’ are not the answer. Ideally, as most of us have been saying for years with licences and road rules, we need a whole-of-Australia approach that shows some planning, forethought, and sense.

In general, Australians are reasonable people – show them a reasonable plan and they’ll get on board.

No-one, certainly not anyone here at CarAdvice, is suggesting that an electric vehicle owner should get a free ride.

There’s more to be considered, though, than just whacking a tax on an electric vehicle without any solid reasoning as to why. Which seems to be the proposal in both Victoria and South Australia.

Victorians will pay a tax of 2.5 cents per kilometre, while South Australians will pay two cents per kilometre. The bigger concern for mine here is the pointer toward a distance-travelled tax.

I’m not so sure I want someone in government knowing exactly where I’ve driven and when, but that’s another fight for another day.

Let’s use the average 15,000km that many claim as the distance a regular Aussie will drive every year. Victorian electric vehicle owners will pay an extra $325 per year, while South Australians pay $300. So, first up, these are not gargantuan amounts we’re talking about, but it’s the principle that needs to be dissected.

Let’s take a quick look at the current state of play if you buy an electric vehicle.

An MG at $43,000 is still a good 15 to 20-grand more expensive than a comparable internal combustion vehicle. So, the MG buyer has already paid more for their car to start with. And, more stamp duty equals more tax.

In theory, it will therefore also cost more each year to insure. That owner is also paying higher electricity costs to charge their vehicle at home each night, too. Not everyone has a solar array big enough to offset the household electricity usage.

Further, that owner will also have to pay to use a lot of the public charging infrastructure that is currently available as well. It’s not as if they are slipping through the net and toddling round for nothing, no matter what the detractors might claim. Audi is offering e-tron buyers six years of free charging (through the Chargefox network), but someone is still paying for the privilege to charge.

On the subject of Audi, a regular Q7 diesel can be had from $103,300 before on-road costs, while the most affordable e-tron starts from $137,100. So again, the e-tron buyer has paid a hell of a lot more for their vehicle in the first place – which means a lot more tax.

Ernst and Young released a report back in September of 2020, which found that each EV actually provided a net benefit to the Australian economy over a 10-year focus period, and in fact contributed more to government revenue than vehicles fuelled by petrol or diesel.

It was commissioned by the Electric Vehicle Council, but it provides an interesting insight nonetheless.

If anyone is willing to formulate an argument as to why we should be paying more for cars than we already to do, and more to use them than we already do, go for it. Don’t forget, we’re still paying the Luxury Car Tax. That one was implemented to protect local manufacturing, even though we never really built ‘luxury’ cars.

And we don’t build cars here at all anymore. We’re still paying it, though.

The reasoning put forward by government is that these new electric vehicle taxes take the place of the fuel excise. Again, that’s a whole other argument; however, it’s worthy of mention here. Australia’s fuel pricing, and the associated reasoning as to why fuel costs what it costs, is a few things – convoluted and nonsense among them. Believe me, we’ve tried to work it out, and the body responsible for the pricing can’t even make sense of it, let alone any of us regular punters.

Be that as it may, and accepting that fuel costs what it costs, part of the price per litre that you pay at the bowser is fuel excise.

Excise, like stamp duty, being just another neat word for ‘tax’. As of February 2020, that excise was a whopping 42.3 cents per litre. Part of that excise, according to governments, although it’s difficult to work out exactly what, goes into the road network.

Australia’s roads are some of the most poorly surfaced, poorly lit, poorly signposted, and poorly maintained in the developed world (especially outside city centres), so I’d like a solid breakdown of where the government thinks it is spending our money once the excise is apportioned. Every time a quality new road opens, it seems to be a toll road that we have to pay to use, so the percentage of the excise certainly isn’t going there.

Going back to the 15,000km theory, we’ll have to make some assumptions here for ease of calculation, so this won’t be exact of course. Let’s assume your vehicle uses 10.0L/100km with fuel costing $1.50 per litre, so that means you’d be going through 1500L of fuel in a year.

In that instance, with 42.3 cents from every litre of that 1500L making up the excise, you are tipping in $635, so it’s not as if internal combustion vehicles don’t pay their own way, too. They absolutely do, but I’d argue the excise needs more explanation than we currently have, in any case.

What we need, then, is a more elegant solution that illustrates some planning and sensibility, and it needs to be the same solution implemented across Australia. An electric vehicle owner in Victoria shouldn’t be worse off than one in NSW – that doesn’t make any sense no matter which side of the argument you sit on.

Electric vehicle acolytes love to use Norway as an example of how to get it done. Norway is way too far down the other end of the scale – and no-one is suggesting that a solution such as theirs would work here. There can be lessons learned, though, from how the rest of the world is approaching the electric vehicle revolution.

Australia – as a non-car-building nation – is now at the mercy of what is being built elsewhere. Soon, we may have no choice but to take up electric cars in ever increasing numbers.

We’re at a stalemate then really.

There is no incentive to buy an electric car, there is no incentive to develop or build any of the public charging infrastructure around the country, and there appears to be no plan on how to move forward. In many ways, it’s sadly a typically Australian approach to a modern problem.

Despite this, the move toward electric vehicles has started and is now material.

Further, it’s gathering pace – slowly at the moment, but that will change – so this is an issue that won’t go away.

It’s yet another example of how a united country-wide approach would be a benefit to all consumers.

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What do you think? Would a national approach to electric vehicle adoption make sense? Share your thoughts in the comments below.