The Fence

Charging electric vehicles for road use?

There’s nothing like road user charging to get a discussion on transport policy going, and this week Infrastructure Partnerships Australia’s paper, Road User Charging For Electric Vehicles should accomplish that.

If you’ve not yet seen the paper, it’s downloadable below. But what’s it all about? First up, is addressing why we need to discuss this. After outlining the benefits of a switch to electric vehicles, namely:

  • More vehicles with zero tailpipe emissions
  • Storage capacity of electric vehicles could help stabilise electrical grids
  • Transitioning to power electric vehicles by renewable energy
  • Reduced reliance on imported petrol and oil

However, that last point is, fiscally, where the rubber hits the road. Part of what motorists pay at the bowser is a fuel excise. A percentage of that excise is used to fund the building of road infrastructure, and road maintenance. As vehicles shift from internal combustion engines to electric power, that is a growing hole in Federal and State budgets. And as put in the Infrastructure Partnerships Australia’s paper:

But electric cars don’t float. They will still use roads, so we need to keep paying for them. And all motorists should pay their fair share. Without reform, fewer road users – particularly those who cannot afford a new vehicle or motorists in regional areas who drive vast distances – will increasingly subsidise electric vehicle motorists. Road funding will also have to be drawn from the broader tax base, taking away resources from critical services such as health and education.

But, this is not to say that electric vehicle owners will be hard done by with the introduction of a road use charge:

Governments can and should ensure that electric vehicle owners will pay no more than other motorists. Some governments may wish to ensure electric vehicle owners pay less than their internal combustion engine counterparts to encourage uptake and unlock the widespread personal and societal benefits that electric vehicles bring sooner. This is rightly a call for governments based on their policy agenda. What is most important is getting a system in place that enables some level of charge for road use and enables governments to manage their networks and sustainably fund their maintenance and upgrades over time.

In regards to timing, Infrastructure Partnerships Australia sees the introduction of road use charging for electric vehicles as a matter to be sorted out sooner rather than later. The reason, because right now electric vehicles form only a very small part (around 0.076%) of Australia’s light vehicle fleet. Another reason to look at this issue is another side of the economic coin. Professor David Hensher, of the University of Sydney’s Institute of Transport and Logistics Studies, and a strong advocate for road use charging covered this in his recent article, Electric Cars – They will in time increase car use without effective road pricing reform.

With a substantial (hopefully total) switch to electric cars, the general position of experts is that the cost of an electric vehicle will be significantly less that a petrol or diesel car (the switching point is unclear, but many suggest in about 10 to 20 years), and that the cost of using such vehicles will decline.

Simple economics, which often drives decisions, suggests to me that the private car will be more affordable and more attractive to use. So all other things being equal, we can expect a notable increase in car kilometres travelled.

Hensher goes on to say:

Thus, moving to green energy to reduce (if not eliminate) end use vehicle emissions runs the very real risk of increasing congestion significantly if governments continue to reject road pricing reform.

Download the paper

There’s a lot to talk about on these related issues of road use charging reform and electric vehicle take-up, and the Infrastructure Partnerships Australia’s paper, Road User Charging For Electric Vehicles is an excellent primer for any debate.

Download the ‘Road User Charging For Electric Vehicles’ paper.

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