Electric Vehicles

“Tax on clean air:” Victoria wants EV road tax in place by July

Published by

The Driven

The Victorian Labor state government said it would introduce legislation into state parliament today that would force drivers of battery electric, plug-in hybrid and hydrogen vehicles to pay a road user tax worth on average $330 a year.

If passed by both houses, the controversial tax – which has been criticised as a perverse disincentive that would further stall development of the local EV market – would come into effect on July 1.

Under the proposed legislation, battery electric vehicles would have to pay a tax of 2.5 cents for every kilometre they drive, while plug-in hybrid vehicles would have to pay  2 cent per kilometre, even if they are burning fuel. Mild hybrids, which charge themselves rather than plugging to an external power source, are exempt from the charge altogether.

The Andrews government justifies the tax on the grounds that currently EV drivers pay no fuel excise. It calculates that the tax will cost the average battery EV driver $330 a year, and the average plug-in hybrid driver $260 a year (plus the excise on however much fuel they consume.

By contrast, it claims the average internal combustion enginge vehicle driver pays around $600 a year in fuel excise – though it does not detail how it came to that figure, and had not responded to a request for more information at time of publication.

The Driven’s calculations, however, show that the government’s figures are based on petrol and diesel cars consuming 10.5 litres for every 100kms. Most car consume much less than that so likely pay only between $300 and $400, while hybrids would pay considerably less.

To read the full version of this story, please go to our EV-focussed sister site, The Driven and click here…

James Fernyhough is a reporter at RenewEconomy. He has worked at The Australian Financial Review and the Financial Times, and is interested in all things related to climate change and the transition to a low-carbon economy.

James Fernyhough

James Fernyhough is a reporter at RenewEconomy. He has worked at The Australian Financial Review and the Financial Times, and is interested in all things related to climate change and the transition to a low-carbon economy.

Share
Published by

Recent Posts

Rare wind, solar and battery hybrid seeks environmental approvals in new renewables hotspot

New wind, solar and battery hybrid project seeks environmental approval near a wheatbelt town emerging…

22 September 2026

Home battery champion raises $78.5 million towards local growth, global expansion

Renewables retailer and home energy management specialist has closed a nearly twice oversubscribed funding round…

21 September 2026

Intergenerational Report plots fossil fuel decline, rise of electrification, as climate impacts mount

Intergenerational Report estimates coal and gas output could shrink about 70% by 2050 if emissions…

21 September 2026

Local utility gets green light to replace remote town’s diesel and gas power with a solar-battery hybrid

EPBC waves through one of a series of renewable energy projects being built to wean…

21 September 2026

Renewables retailer doubles down on coal country battery plans as huge new BESS prepares to power up

Victoria's coal country is rapidly morphing into battery country, as one huge project starts commissioning,…

21 September 2026

Route for first offshore wind transmission link mapped out amid scramble to meet 2032 target

VicGrid has released its preferred route for the 60 km new transmission line needed to…

21 September 2026