Proposed EV Tax in Australian State Could Jeopardi
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Posted On: 12/08/2020 2:25:26 AM
Proposed EV Tax in Australian State Could Jeopardize EV Adoption
Australia hasn’t made a lot of progress towards electrifying its roads. While countries such as the UK, France and Germany have set clear targets for banning the sale of new internal combustion engine (“ICE”) vehicles, Australia’s climate politics has been described by some as “broken.” The country currently has a paltry 20,000 electric vehicles on the road, and only 0.6% of new cars sold in the country are electric.
Now the state of Victoria is planning to introduce a road user tax for electric vehicles (“EVs”) that has the potential to cripple the EV industry before it even takes off. The Victorian government wants to impose a charge of 2.5c a kilometer on electric vehicles and 2c/km on hybrid plug-in cars. The argument is that folk who drive ICE vehicles pay for the roads through a national excise on fuel, a charge EV drivers do not have to pay. According to a government spokesman, the tax will make sure that all Victorian motorists pay their fair share.
However, critics of the proposed tax say that it could jeopardize the adoption of electric vehicles in the country. Federal government modelling, based on current policies, had posited that electric vehicles would make up 65% of new vehicles sold by 2050, says Dr. Lake Whitehead from the University of Queensland’s Dow Center for Sustainable Engineering Innovation. His analysis found that if the 2.5c tax rate were imposed without any incentives, EVs would make only 40% of new vehicle sales by 2050.
This equates to at least 4.9 million fewer electric vehicles sold. As the amount of cars on the roads are forecast to increase significantly, having a reduced number of zero-emission electric vehicles will likely lead to increased greenhouse emissions. Without additional measures such as reducing or altogether removing stamp duty, registration costs and road tolls, Whitehead says, electric vehicles will be too pricey for most drivers to switch.
His analysis found that the 2.5c/km tax would be equivalent to a $4,500 bump in the vehicle’s initial purchase price while a $5 congestion tax usually charged in inner-city areas capped at $15 a day would add $2,800 to the price. He concludes that the proposed EV tax is “completely incongruent” and does not line up with the state’s target of achieving net-zero emissions by 2050. Although a road user tax does make sense, it would only work for the EV industry if it was accompanied by incentives that made EVs more affordable.
Elsewhere, the electric vehicle sector is seeing rapid transformations. For example, Net Element (NASDAQ: NETE), a global fintech firm that supports the making and receiving of electronic payments, is set to merge with EV maker Mullen Technologies Inc.
NOTE TO INVESTORS: The latest news and updates relating to Net Element (NASDAQ: NETE) are available in the company’s newsroom at http://ibn.fm/NETE
Please see full terms of use and disclaimers on the Green Car Stocks website applicable to all content provided by GCS, wherever published or re-published: https://www.GreenCarStocks.com/Disclaimer
Australia hasn’t made a lot of progress towards electrifying its roads. While countries such as the UK, France and Germany have set clear targets for banning the sale of new internal combustion engine (“ICE”) vehicles, Australia’s climate politics has been described by some as “broken.” The country currently has a paltry 20,000 electric vehicles on the road, and only 0.6% of new cars sold in the country are electric.
Now the state of Victoria is planning to introduce a road user tax for electric vehicles (“EVs”) that has the potential to cripple the EV industry before it even takes off. The Victorian government wants to impose a charge of 2.5c a kilometer on electric vehicles and 2c/km on hybrid plug-in cars. The argument is that folk who drive ICE vehicles pay for the roads through a national excise on fuel, a charge EV drivers do not have to pay. According to a government spokesman, the tax will make sure that all Victorian motorists pay their fair share.
However, critics of the proposed tax say that it could jeopardize the adoption of electric vehicles in the country. Federal government modelling, based on current policies, had posited that electric vehicles would make up 65% of new vehicles sold by 2050, says Dr. Lake Whitehead from the University of Queensland’s Dow Center for Sustainable Engineering Innovation. His analysis found that if the 2.5c tax rate were imposed without any incentives, EVs would make only 40% of new vehicle sales by 2050.
This equates to at least 4.9 million fewer electric vehicles sold. As the amount of cars on the roads are forecast to increase significantly, having a reduced number of zero-emission electric vehicles will likely lead to increased greenhouse emissions. Without additional measures such as reducing or altogether removing stamp duty, registration costs and road tolls, Whitehead says, electric vehicles will be too pricey for most drivers to switch.
His analysis found that the 2.5c/km tax would be equivalent to a $4,500 bump in the vehicle’s initial purchase price while a $5 congestion tax usually charged in inner-city areas capped at $15 a day would add $2,800 to the price. He concludes that the proposed EV tax is “completely incongruent” and does not line up with the state’s target of achieving net-zero emissions by 2050. Although a road user tax does make sense, it would only work for the EV industry if it was accompanied by incentives that made EVs more affordable.
Elsewhere, the electric vehicle sector is seeing rapid transformations. For example, Net Element (NASDAQ: NETE), a global fintech firm that supports the making and receiving of electronic payments, is set to merge with EV maker Mullen Technologies Inc.
NOTE TO INVESTORS: The latest news and updates relating to Net Element (NASDAQ: NETE) are available in the company’s newsroom at http://ibn.fm/NETE
Please see full terms of use and disclaimers on the Green Car Stocks website applicable to all content provided by GCS, wherever published or re-published: https://www.GreenCarStocks.com/Disclaimer
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