Answers to Questions

Electric Vehicles

In reply to the Hon. R.A. SIMMS (22 June 2021).

The Hon. J.M.A. LENSINK (Minister for Human Services): The Treasurer has advised:

The Marshall Liberal government is committed to investing in the uptake of environmentally friendly, zero and low emission vehicles, whilst ensuring that there is a sustainable model for critical road funding into the future.

In South Australia’s 2020-21 budget, the Marshall government made the single largest investment in electric vehicles in the state’s history through its $18.3 million Electric Vehicle Action Plan. The 2020-21 budget also announced the government’s intention to introduce a road user charge for zero and low emission vehicles.

Drivers of internal combustion engine vehicles pay fuel excise when they fill up their vehicles with petrol, diesel or LPG. Drivers of zero and low emission vehicles pay little or no fuel excise. Currently, there are very few zero and low emission vehicles in South Australia, but it is expected that the uptake will increase as the availability of models increases and they reach price parity with comparable internal combustion engine vehicles.

As the state transitions towards a higher concentration of zero and low emission vehicles, there will be a corresponding reduction in the number of motorists paying fuel excise, which contributes funding to help maintain and improve the state’s road network. A road user charge ensures that all vehicle owners, regardless of what car they drive, contribute to the maintenance and improvement of our road network into the future. This includes supporting infrastructure for electric vehicles.

The details of the proposed road user charge are included in the Motor Vehicles (Electric Vehicle Levy) Amendment Bill 2021.

Recognising that the market for electric vehicles is still being established, the road user charge is now proposed to commence from 1 July 2027, or when the sale of battery electric vehicles reaches 30 per cent of new motor vehicles sale in South Australia, whichever is earlier. This is the same approach proposed in New South Wales.

The details of the charge are broadly consistent with similar arrangements in place in Victoria and proposed in New South Wales.

The Tasmanian government has also announced as part of its recent 2021-22 budget that it intends to introduce a road user charge for zero and low emission vehicles from 1 July 2027, or when zero and low emission vehicles make up 30 per cent of all new vehicles sales.

The charge will be calculated on the number of kilometres travelled by an electric vehicle apart from travel undertaken on an area of private land that is not open to or used by the public.

The rate applying to the number of kilometres travelled by an electric vehicle is in line with that applying in Victoria and proposed in New South Wales at:

2.0 cents per kilometre (indexed) for plug-in hybrid vehicles; and

2.5 cents per kilometre (indexed) for any other electric vehicles.

Consistent with the proposed indexation arrangements in New South Wales, the prescribed rate will be indexed annually, from 2022-23. The prescribed rate will be indexed by movements in the Adelaide consumer price index.

These rates are below the average amount of fuel excise paid per kilometre by owners of internal combustion engine vehicles. The lower per kilometre charge recognises that there are environmental and health benefits associated with electric and zero emission vehicles. The lower rate for plug-in hybrid vehicles compared to other electric vehicles recognises that they pay some existing fuel excise.

Based on the average fuel consumption and distance travelled by passenger vehicles in South Australia (2018 ABS data), a non-electric vehicle pays around $565 in fuel excise each year, on average, at the current fuel excise rates. This is around $260 higher than the charge that would be payable by a battery electric vehicle.

The road user charge would be calculated and billed in arrears as part of the vehicle registration process. Owners will be required to provide their odometer readings when they register, with the charge calculated on the distance travelled since the last renewal/odometer reading. This approach is intended to minimise the administration burden associated with the new charging arrangements by leveraging off the existing registration arrangements.

To support the uptake of electric vehicles while the market is being established, the government will also introduce an $18 million electric vehicle subsidy package subject to the passage of this bill through parliament. The package will provide a $3,000 subsidy for the first 6,000 battery electric vehicles purchased in South Australia from the date the bill is approved by parliament. A price cap of $68,750 (GST inclusive) will apply for the subsidies to provide an incentive to bring lower priced electric vehicles to the market and avoid subsidising expensive electric vehicles.

Combined with the existing $18.3 million Electric Vehicle Action Plan in South Australia, this package will increase the total level of support for electric vehicles to $36 million, and should support the uptake of electric vehicles in South Australia while introducing a more sustainable long-term road funding model.

The final package considers feedback received through the consultation process and allows the market for electric vehicles to develop further before commencing new charging arrangements. The design also takes into account the similar arrangements introduced in Victoria and those proposed in New South Wales.