NSW’s ambitious plans to speed up electric vehicle adoption

NSW Transport Minister Andrew Constance has warned Australia will be the “laughing stock of the world” if various state governments push ahead with plans to introduce a tax on electric vehicles (EVs).

Instead, Mr Constance proposed a number of incentives to expedite the take-up of electric vehicles in NSW, including subsidised car parking, waving stamp duty and allowing EVs to use transit lanes normally reserved for buses and taxis, according a to a report in the Sydney Morning Herald.

He also proposed any road-user levies on electric vehicles should not be introduced until EVs make up 40 to 50 per cent of the car market.

“What we will do is make ourselves the laughing stock of the world,” Mr Constance said if NSW introduced an electric vehicle tax too soon. “The rest of the world will have moved to full manufacturing of electric vehicles and here we are sort of struggling.”

Mr Constance said NSW should not rush head-long into imposing a user tax on electric vehicles that would see owners pay a per-kilometre levy.

He added that the push toward an EV future should come from every level of government – federal, state, and local – urging every jurisdiction to switch their fleets to electric vehicles, a move he said would then have a flow-on effect on the second-hand car market.

“We’ve got to be able to make it easier for people to crack this market,” he told the SMH.

“We’ve also got to look at ways in which we make it easier for those who run fleets. It wouldn’t matter if it’s the taxi industry, rental cars, share cars, we’ve got to be able to look at those opportunities.

“This is the time that we will be judged accordingly for those who deliver a system which scales up EVs and improves our air quality and our public health and at the same time delivers for our environment,” said Mr Constance.

NSW Treasurer Dominic Perrottet told the Sydney Morning Herald he was working on a “holistic package” for electric vehicles set to be announced in this year’s state budget but added that any distance-based tax on EVs would not be brought in until the take-up of the technology was more substantial.

“Over time, people who use the roads should pay for the roads, just like they do with fuel excise,” Mr Perrottet told the SMH. “A user charge is where the future lies but what’s important is that we promote, not impede, the take-up of electric vehicles.”

While details of the NSW policy have not been revealed, it’s unlikely to mirror that of Victoria where electric vehicle users will pay a levy of 2.5c per kilometre when it comes into effect later this year.

However, the Victorian government confirmed this week it would start offering a subsidy of up to $3000 for buyers of electric vehicles – though the subsidy is currently capped at 4000 vehicles, which must be priced below $68,740 before road costs.

The chief executive of the electric Vehicle Council, Behyad Jafari, agreed with Mr Constance, stating the NSW government now had an opportunity to lead Australia in EV take-up.

“At this point in time the public interest is going to be much better served by rapid electric vehicle uptake than by skimming a little extra tax from the few EVs that are already registered,” Mr Jafari said in a statement.

“The transition to electric cars will clean our streets of exhaust and noise, lowering health costs, reducing carbon emissions, and helping break the state’s dependence on foreign oil. This will represent billions of dollars in economic benefit.

“There's a great opportunity for New South Wales to have it all here. Well-targeted subsidies now, as seen elsewhere across the globe, would create a boom in EV sales.

“Then, once the state starts capturing the benefits from fleet electrification, that would be the perfect time to start introducing smart road user charges.”