Road Pricing and Electric Vehicles: Where to from here?

A road use charge on EVs is not a disincentive [Source: Mariordo, CC BY-SA 2.0]

Details for this event are available here: https://ciltinternational.org/events/road-pricing-and-electric-vehicles-where-to-from-here/.

Please note I will be updating this article over the next few days to provide more of the detail behind our presentation at CILTA in Canberra entitled "Road Pricing and Electric Vehicles: Where to from here" on 12th October 2021 with John Poljak, the founder of www.keynumbers.com.

The slides from our presentation are available below:

Background reading

Dossor, R. (2015). Revenue from road use. Parliamentary Library Briefing Book - 45th Parliament. Canberra: Parliamentary Library. https://www.aph.gov.au/About_Parliament/Parliamentary_Departmen ts/Parliamentary_Library/pubs/BriefingBook45p/FundingRoads. 

Model of Critical Junctures

See my paper with Stephen Darlington from the AusPSA Conference 2021 here: https://www.politicalscience.com.au/2021/09/apsa-2021-conference-paper.html.

EV Road Use Charge: What's happening now?

Victoria: Road use charges of 2.5c/km (Victoria) on zero and low-emissions vehicles (ZLEVs) from 1 July 2021 (equivalent to fuel exercise charges). Note that conventional hybrids are not considered to be ZLEVs. Source: https://www.vicroads.vic.gov.au/registration/registration-fees/zlev-road-user-charge.

NSW: 2.5 cents per km (indexed) for electric vehicles and 2 cents per km (i.e. 80% of EV charge, indexed) for plug-in hybrid vehicles, by 1 July 2027 or when EVs reach 30% (whichever comes first). Source: https://www.nsw.gov.au/initiative/nsw-governments-electric-vehicle-strategy/road-user-charge 

SA: $3,000 subsidy with 2 cents per km (indexed) for plug-in hybrid vehicles, and 2.5 cents per km (indexed) for any other electric vehicles, by 1 July 2027 or 30% (as per NSW)

Timing

Infrastructure Partnerships Australia (2019) Road User Charging for Electric Vehicles. URL: https://infrastructure.org.au/wp-content/uploads/2019/11/Road-User-Charging-for-Electric-vehicles-1.pdf.

Introducing a road user charge for electric vehicles is a home run reform. It represents a win-win for infrastructure users and taxpayers. But there is a catch – reform must be delivered soon.

keynumbers

  • Headline versus reality: Keynumbers https://keynumbers.com
  • Signal versus noise: EV road use charge 2.5c/km versus ICE Fuel excise at $0.427/litre
  • Australia as a laggard? See Canada (which manufactures EVs) (comparative data)
  • London congestion charging does not reduce congestion in the same way a distance-based charge, so not a panacea for congestion management
  • NSW toll roads – M4
  • Rome – surge pricing fast lanes

Incentives

KPMG Canada (2021):

“For those already inclined to buy an EV, they were motivated by environmental concerns, lower operating costs, tax incentives, and the prospect of reduced insurance premiums. For them, tax incentives were much less of an incentive than the environment or lower operating costs”.

Other incentives:

  • Investment in charging infrastructure
  • Reductions in registration fees
  • Reductions in stamp duty and other purchasing-related subsidies
  • ‘Soft’ loans 

Disincentives


KPMG Canada (2021) (replicated findings of Electric Vehicle Council 2020):

“The main reasons cited by those planning to buy a vehicle but not an EV are the high cost (60 per cent); limited driving range [range anxiety] (51 per cent); lack of charging infrastructure (50 per cent); dubious battery lifespan (30 per cent), limited model options (24 per cent); and recharging time (24 per cent).
  • 83 per cent of Canadians believe the auto makers should be required to invest in a national charging infrastructure.
  • 89 per cent want EV charging stations installed at "every gas station" as well as shopping malls and grocery stores.
  • 61 per cent say the pandemic made them realize that they need a vehicle. They said they would rather drive than take public transport.”

See: Electric Vehicle Council in partnership with carsales (2021). Consumer Attitudes Survey 2021. URL: https://electricvehiclecouncil.com.au/wp-content/uploads/2021/10/2021-EVC-carsales-Consumer-attitudes-survey-web.pdf.

Particulate emissions

OECD. https://www.oecd.org/environment/measures-needed-to-curb-particulate-matter-emitted-by-wear-of-car-parts-and-road-surfaces.htm.

Advocacy since 2015

  • Based on understanding of technological inventions as critical junctures
  • "Road Users Must Pay, Sooner Rather Than Later", The Conversation, 16 June 2015.
  • "Toll war revs up: Sydney drivers face congestion tax or road user-pay system", The Sunday Telegraph, 12 July 2015.
  • Getting serious on roads reform is one way our political leaders can get back on track, The Conversation, 25 August.
  • De Percy, M.A. and Wanna, J. (Eds.) (2018). Road Pricing and Provision: Changed Traffic Conditions Ahead. Canberra: ANU Press. DOI: http://doi.org/10.22459/RPP.07.2018.
  • Road user fee a step to reform: Those who drive petrol-fuelled cars are subsidising drivers of electric vehicles. The Australian, 25 November 2020. 
  • Pearls and Irritations https://johnmenadue.com/road-pricing-must-start-with-electric-vehicles/