Electric car owners in Victoria now have to pay to use roads, while NSW motorists won't be charged until 2027

Electric car owners in Victoria will, from today, now have to pay to drive their vehicles on public roads at a rate of 2.5 cents per kilometre for fully electric cars and 2c/km for plug-in hybrids, despite these vehicles making up less than one per cent of the state’s car parc.

This is in stark contrast to the NSW government’s approach to electric adoption, which will implement the same tax from July 2027 or when EVs make up 30 per cent of new car sales.

Victoria’s new road tax is expected to reap $30 million in revenue per year, with motorists tasked with logging kilometres to pay the tariff come registration renewal time.

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The controversial tax was passed in late May by the Labour government, and is the only tariff in the world designed to disincentivise electric vehicle (EV) adoption, and has been called out as the “world’s worst EV policy” by brands like Hyundai, Volkswagen and the Electric Vehicle Council.

The tax is targeted at EV owners who, while still using public roads, are able to avoid the fuel excise incurred by motorists who have to fill up at a bowser.

While the fuel excise is pegged at 42.7c per litre, it is a federal tax applicable to the whole of Australia, while the EV tariff applies to just Victorians.

While on the one hand the Victorian government seemingly disincentivises EVs, it is still offering a $3000 kickback on EV purchases under $68,740, which includes the likes of the Nissan Leaf, MG ZS EV, Mazda MX-30 Electric, Hyundai Kona Electric and Tesla Model 3.

Victoria is also aiming to have half of all vehicles in the state be EV by the end of the decade, but has stopped short of offering more than the financial incentive to stimulate interest.

Juxtaposing the Victorian government’s move is the NSW government, which will also $3000 rebate on EVs under $68,750, but will also commit to building more charging infrastructure and allow tailpipe emissions-free cars access to transit T2 and T3 lanes.

NSW will also waive stamp duty for EVs under $78,000, which opens the door for BMW i3, Mercedes-Benz EQA and Volvo XC40 Recharge Pure Electric buyers to take advantage.