NSW announces 2.5c/km EV charge – but not until 2027

The NSW Government has announced a road user charge for EV and PHEV drivers – but it’s not due to be implemented for years.

Under the plan electric cars will be charged 2.5 cents per kilometre and plug-in hybrid electric vehicles will pay 2.0c/km.

The 2.5 cents-per-kilometre charge will not kick in until 2027 – or until at least 30 percent of new-vehicle sales are electric, whichever is earliest.

The charge would cost $375 per year for a car covering 15,000km and effectively cover the fuel excise currently collected by the Federal Government at a rate of 42.7c/km.

By way of comparison, fuel excise for a car using 7L/100km would cost a driver $448.35 per year. A car using 10L/100km would pay $640.50 annually in fuel excise.

The lower rate for PHEVs is to account for the fact they will use some petrol, so in turn contribute to road funding by paying fuel excise.

However, PHEV drivers who drive long distances to take advantage of the extended range of a plug-in hybrid’s petrol engine will effectively be slugged twice. If a PHEV is consuming, say, 7 litres per 100km once the battery has been depleted the driver will be paying $2.99 per 100km in fuel excise (7 x 42.7c) and $2.00 per 100km in road user charges (100 x 2c).

The revenue from the road user charge would be used to fund roads and road maintenance.

Whereas Victoria’s road user charge was rushed and failed to account for the lower fuel use of hybrids, the NSW approach appears more measured. Industry insiders say the NSW government was more pro-active in consulting key stakeholders and providing a longer term vision for EV uptake.

Announced as part of a broader incentive program for EVs, the phased approach is being welcomed by the automotive industry and the Electric Vehicle Council.