Electric Vehicle Tax (Vic)

From 1 July 2021, every owner of an electric vehicle and other zero-emissions vehicle in Victoria was required to pay a road-user charge. The charge was introduced because drivers of these vehicles do not pay fuel excise, about half of which is spent on roads.

How much is the charge?

The charge for Zero and Low Emissions Vehicles (ZLEVs) is 2.5 cents a kilometre. ZLEVS are electric, hydrogen or plug-in electric-hybrid vehicles. Drivers of plug-in hybrid vehicles, which are powered by petrol and electricity, are required to pay 2 cents for every kilometre driven. Conventional hybrid and mild hybrid vehicles, which cannot be charged by an external power source, are exempt from the charge but will lose their annual $100 registration concession.

Fuel excise is 42.3 cents a litre on petrol and diesel, and 13.8 cents a litre for LPG. This revenue goes to the Federal Government. The electric vehicle tax goes to the Victorian Government to invest in increasing the uptake of ZLEVs, including vehicle-charging infrastructure and buildings to accommodate it.

Paying the charge

ZLEV registered operators must submit an odometer reading photo and declaration  to VicRoads when the registration is to be renewed, transferred or cancelled. This can be done online or at a VicRoads Customer Service Centre.

Failure to comply can result in suspension or cancellation of registration, or the issuing of a pro-rata invoice based on an estimated annual travel distance of 13,500km.

Exemptions

Exemptions to the charge apply in very limited circumstances. These are:

• for ZLEV motorcycles;
• when ZLEV vehicles are registered as mobile plant vehicles (such as electric forklifts), or heavy Special Purpose Vehicles;
• when ZLEV vehicles are used on private roads or agricultural land;
• for licensed vehicle traders, for the first 1500km of a vehicle’s first registration period, to cover any short periods of use such as new vehicle delivery or vehicle transfer.

Documents required to support an exemption claim include proof of address, proof of employment, diarised entries in logbooks, and data from vehicle tracking apps.

Criticism

The charge has been criticised as a disincentive for both manufacturers and consumers.

In April 2021, a group of 25 companies and organisations published an open letter to the Victorian parliament calling on it to vote against the electric vehicle charge. Signatories included Hyundai, Volkswagen, Uber, the Electric Vehicle Council, Solar Citizens, Environment Victoria, Doctors for the Environment Australia, the Australian Conservation Foundation and the Clean Energy Council. They pointed out the charge would be the only stand-alone vehicle tax in the world, and “no other jurisdiction has introduced such a targeted levy on the cleanest vehicles on the road without significant incentives to balance it out”.

Opponents also say the charge penalises vehicle owners who do not consume petrol, and gives the impression that the Victorian Government does not fully support green technology, when the government provides rebates for households that install solar panels.

In contrast to Victoria, the Australian Capital Territory offers free registration for 2 years on all new electric vehicles, as well as no stamp duty on the purchase of an electric vehicle.

For advice or representation in any legal matter, please contact Armstrong Legal.