AN AUSTRALIAN EV association has proposed a China-led EV future with a universal road-user charge. But it wants ICE vehicles to face a double tax system.

The Australian Electric Vehicle Association (AEVA) wants a federal road-user charge (RUC) that would apply to all vehicles. This would be based on both weight and distance travelled. 

But it also wants the fuel excise to be retained as an additional “pollution” levy on petrol, diesel and hybrid vehicles.

Speaking with GoAutoNews Premium, convenor Dr Chris Jones argued the proposed charge – which would be phased in over 10 years – and the retaining of excise tax, should be treated separately.

Dr Chris Jones

“You are paying for two different things — one of them is an excise that is placed on fuel that everyone who buys fuel, presumably to burn on the road, has to pay,” he said.

“The other charge is (to recoup) the costs associated with supplying roads and infrastructure to support automobiles.”

AEVA is proposing an eventual rate of about three cents per tonne-kilometre, but Dr Jones said the charge should start much lower and rise as Australia’s transition to an electrified vehicle fleet progresses. He suggested a 10-year phase-in period.

“It is an incentive, but it is also a recognition that burning fuel in our cities is poisoning people and warming the planet and we really have to stop doing that,” he said.

Dr Jones said the full charge would only become significant after motorists had been given several years to change across to an electric vehicle.

At the full rate cited by Dr Jones, a 1.5-tonne vehicle — akin to a Mazda CX-5 or Toyota Corolla Cross — driven 10,000 kilometres per year would pay about $450 under AEVA’s proposed weight-distance RUC.Meanwhile, a 2.5-tonne vehicle — such as Ford Ranger Raptor or the fully electric Kia EV9 — would pay about $750 to be driven for 10,000km, irrespective of powertrain or fuel type.

Beyond the proposed RUC model, vehicles with internal combustion engines (ICEs) would continue to pay fuel excise at the current rate of 53.7 cents per kilometre.

This equates to about $400 a year for an ICE vehicle travelling 10,000km a year while consuming an average of 7.5L/100km.

Retaining the fuel excise atop AEVA’s proposed RUC would equate to an ICE (using the above Mazda example) motorists paying about $850 a year – more than double the current tax rate.

AEVA said more than 85 per cent of its members had voted in support of the model, which would create a direct ownership-cost incentive for lighter vehicles — particularly those with battery-electric powertrains.

Dr Jones agreed the RUC model would pressure electric vehicle manufacturers away from simply fitting larger and heavier batteries to increase driving range and toward a concentration on efficiency.

The proposal has landed while Australian federal and state governments continue to work toward a national RUC system following the High Court of Australia’s 2023 Vanderstock decision, which invalidated Victoria’s EV distance charge as an unconstitutional state excise.

Federal, state and territory jurisdictions agreed in September 2025 that reform should provide fair and sustainable road funding, treat vehicle types more equitably, be simple to administer, and avoid depressing EV uptake. 

A final model proposal or timeline is yet to be announced, but federal climate change and energy minister Chris Bowen confirmed last month that an RUC was “not something which is imminent.”

New South Wales had announced, before the Vanderstock judgment called into question state-run charges, that it would commence operation of a state RUC at an indexed rate of 3.095c/km for full EVs and 2.476c/km for plug-in hybrids.

Several levers may be available for a national system: a flat annual EV charge, distance-only charging, distance charges differentiated by mass or axle count, and more sophisticated location- and congestion-based pricing.

New Zealand already charges light EVs and diesel vehicles at a rate of $NZ76 (about $A61) per 1000km, and plug-in hybrids at a rate of $NZ38 (about $A30) per 1000km, while vehicles requiring liquid fuel also pay excise.

A poll commissioned by Transport Australia in April 2026 found that 59 per cent of surveyed Australians supported replacing fuel excise with a per-kilometre RUC for all drivers, rising to 71 per cent among EV and hybrid drivers.

Scott Maynard

AEVA differs in seeking to retain fuel excise as an additional disincentive for retention of combustion vehicles.

Industry opinion is divided over how far a national RUC scheme should go.

Polestar Australia managing director Scott Maynard told GoAutoNews Premium he backed a universal application.

“Australia has a golden opportunity to rethink the way roads are funded, as the rollout of hybrid, PHEV and electric vehicles continues,” he said.

“A tax hurriedly slapped only on electric vehicles squanders that opportunity and will serve to disincentivise uptake. Any RUC needs to be applied equally to all Australian motorists.”

But Dr Jones said that even a simple per-kilometre RUC would only depress electric vehicle uptake “a little bit — but really not much.”

However, the AEVA convenor warned that a simplistic system could produce anomalies such as electric motorcycles paying the same per-kilometre rate as a three-tonne electric SUV while leaving PHEVs as the least-taxed vehicle type. 

Research commissioned earlier this year by the Electric Vehicle Council suggested that 28 per cent of likely EV buyers were dissuaded after being shown a personalised charge of 3c/km.

Mazda Australia managing director Vinesh Bhindi said he was less convinced by the AEVA proposal but said he was open to various methods for administering a future RUC.

Vinesh Bhindi

“I’m not sure I am in the camp of the weight (based RUC), but it really doesn’t matter that much,” he said.

“In the end, as long as it is national and transparent and workable for the consumer and OEMs, it’s okay,” said Mr Bhindi.

The Mazda chief said “simpler is better” and said additional reporting or weight-based variables could distort vehicle purchase decisions—the latter being something that AEVA sees as an advantage of its proposal.

But Dr Jones said reporting would be simple enough, with the government already holding the vehicle mass compliance data needed for a weighted scheme, while odometer self-reporting would keep things simple.

Drivers would be invoiced for a default rate of 10,000km per year under the AEVA proposal, giving drivers who drove less an incentive to self-report, with false declarations to be picked up if the driver was stopped by police.

“It’s not like governments can’t do it — they’ve got all this information at the click of a mouse,” said Dr Jones.