Electric vehicle (EV) owners in Australia could soon be required to pay an annual tax of around $363 as part of a new proposal to ensure all drivers contribute to road maintenance costs. Currently, drivers of petrol and diesel vehicles pay a fuel excise that helps fund the country’s transport infrastructure. EV drivers, however, don’t pay this tax because their vehicles run on electricity.
That may soon change. Federal Treasurer Jim Chalmers has indicated the government is considering a road-user charge (RUC) for EVs. While the exact details are still being worked out, the shift aims to level the playing field as EV ownership continues to rise rapidly across the country.
“Electric vehicles need to start paying their share,” EV expert Toby Hagon told Yahoo Finance. “It’s inevitable. Petrol and diesel cars are taxed, and EVs eventually will be too.”
Chalmers acknowledged the proposal would not be straightforward. “All of this represents a big agenda on the supply side of our economy. None of these reforms are simple,” he said during a speech at the National Press Club this week.
The move comes as EV sales surge in Australia, with brands like Tesla, BYD, Hyundai, and Polestar gaining popularity. EVs now make up a significant portion of new car registrations, prompting policymakers to rethink how road funding is collected.
Though no official figures have been released, Hagon estimates the proposed tax could amount to approximately 3 cents per kilometre. For a driver covering 12,000 kilometres a year, that would total about $360—comparable to the average annual fuel excise paid by drivers of petrol cars.
The federal government will need to collaborate with state and territory governments to finalize the RUC framework, making it clear that implementation is still some time away.
If approved, the tax could change the way EVs are perceived in Australia, shifting them from being a cost-saving alternative to one that comes with new responsibilities. Still, industry experts believe the transition is necessary for long-term infrastructure sustainability.
