Grattan Institute

Is the “world’s worst electric vehicle policy” really so bad?

Aug 14, 2023

Victoria's per-kilometre charge on electric vehicles is causing controversy and is being challenged in the High Court. The podcast discusses the impact of the charge on revenue, electric vehicle adoption, and road-user charging. It also explores the current state of electric vehicles in Australia and debunks the belief that the government is hindering EV adoption. Fairer per-kilometre charges for EVs are proposed.

11:23

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Quick takeaways

The High Court case in Victoria will determine whether state governments have the constitutional authority to impose a per-kilometer charge on electric vehicles, which has raised concerns among EV drivers and the Australian Trucking Association about financial impact and potential extension to heavy vehicles.

The debate revolves around whether the charge qualifies as an excise, with EV drivers arguing that it undermines their environmental efforts, while the Victorian government argues that it is a tax on driving and falls within their jurisdiction to impose.

Deep dives

EV drivers' legal argument against the charge

EV drivers argue that the per kilometer charge on electric vehicles in Victoria is a penalty and undermines their efforts to contribute to the environment. They claim that the state lacks constitutional authority to impose this charge and are relying on section 90 of the Constitution, which reserves exclusive power to leading excise for the Commonwealth. The crux of their argument revolves around whether the charge qualifies as an excise, as if it does, only the Commonwealth can impose it. The Australian Trucking Association supports the Commonwealth in fears that if the charge is upheld, Victoria may extend it to heavy vehicles, causing significant financial impact for its members.

Introduction

3min

The Argument Surrounding the Zero Emissions Vehicle Charge and Its Impact on Electric Vehicle Usage

2min

The Current State of Electric Vehicles and Costs Associated with Driving

6min

Dubbed by some as the “world’s worst electric vehicle policy”, Victoria introduced a per-kilometre charge on electric vehicles and plug-in hybrids in 2021. EV drivers were so riled up about the charge that they headed to the High Court to fight it. We’re now awaiting the High Court’s decision, which will determine whether state governments have the constitutional authority to impose the tax. But is it really such a bad policy? And, more broadly, why is Australia so far behind other countries in making the switch from high-polluting petrol and diesel vehicles to EVs? In this latest Grattan Podcast, our transport experts Marion Terrill and Natasha Bradshaw discuss the implications of the High Court case for revenue-raising, electric vehicle take-up, and the future of road-user charging.

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Grattan Institute

Is the “world’s worst electric vehicle policy” really so bad?

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

EV drivers' legal argument against the charge

Defense argument and revenue implications

Remember Everything You Learn from Podcasts