The government has tempered suggestions that a road user tax will be applied to EVs anytime soon, amid speculation on how it should work.
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The federal Minister for Infrastructure, Catherine King, has poured cold water on suggestions a road user tax for electric vehicles will be implemented anytime soon as electric vehicle sales rise amid record high fuel prices.
Meanwhile, Polestar's Australian boss has offered his take on how it should work.
King told the ABC's Insiders television program that while her department had been actively working on the details of a road user charge for electric vehicles since last December, she poured cold water on suggestions that anything that disincentivised EVs would be implemented in the near future, citing several reasons.
“The first is that we want to try and not disincentivise electric vehicle uptake, and particularly right at the moment when we're seeing such a surge in that, so it may not be the time for it right now," King said.
The second is, it's obviously going to have to be legislated through the parliament, and I'm not clear that there's a pathway for it through the parliament at this stage. We'll wait and see.”
Australia's governing political party, the Australian Labor Party, currently lacks a majority in the Senate. This means for any legislation to become law it needs the support of senators from the Australian Greens or the Liberal National Coalition.
A possibility exists that individual states, rather than the federal government, could implement their own versions of a road user tax, with NSW announcing plans to do so.
However this approach has failed for states in the past, with an attempt by Victoria to do so blocked by the High Court in 2023.
Opinions on how a road user tax should be implemented differ among politicians and the automotive industry. The Australian Managing Director of all-electric car brand Polestar, Scott Maynard, believes a road user charge should apply to all vehicles and be based on weight.
"It would make sense to us if a road user charge was deployed unilaterally across the industry, and not a tax on electric vehicles," Maynard said.
"It would make sense to us, that it would be applied according to weight of vehicles. It is a road user charge and designed to fund the upkeep of our roads and infrastructure. And so, the majority of its cost should be borne by those that use it the most, and cause the most damage to our roads.
"So that's what we would be hoping for, [but] it's looking less and less likely.
"It shouldn't be applied against electric vehicles, it should be applied across the board, and it would have made sense to take this opportunity to reconcile all of the fees, charges, taxes, and duties that are applied when a motorist seeks to buy, register and drive a car on Australian roads."
At the beginning of April 2026 the federal government temporarily halved the 51.5 cents per litre fuel excise tax in an attempt to lower fuel prices, which have skyrocketed since the outbreak of conflict in the Middle East.
This tax is intended to fund road maintenance and infrastructure, and is based on a simple methodology that those vehicles using more fuel — and therefore paying more tax to maintain those roads — must therefore be using Australia’s roads more and/or be heavier vehicles.
But as electric and hybrid vehicles have crept onto Australia’s roads, this logic has been upended. Electric cars, such as the 22,239 Tesla Model Y vehicles sold last year don’t use liquid fuel which means their owners currently avoid this tax aimed at funding road infrastructure.
Scott Maynard hopes that one road user charge applied across all vehicles, regardless of fuel type, would create a fairer system.
"There are just a litany of different charges and taxes that are applied. This would be a great opportunity to clean all those up, and apply an overlay road user charge," Maynard said.
"It would be disappointing to see the government just take a stopgap measure, and simply put a flat rate and slam it on EVs. That would be poor policy.
"This is the opportunity to make an adjustment that would then create a really fair system, it remains to be seen what's revealed in the coming budget and the time after that."
The 2026 Australian federal budget is expected to be revealed by Treasurer Jim Chalmers on 12 May.
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Max is the News Publishing Coordinator for Drive. He enjoys creating engaging digital content, including videos, podcasts, interactive maps, and graphs. Prior to Drive, he studied at Monash University and gained experience working for various publications. He grew up playing Burnout 3: Takedown on the PS2 and was disappointed when real life car races didn’t have the same physics.
