Electric car executive warns road-user charge will punish drivers doing the right thing as government pushes to plug fuel tax shortfall

Sky News AU

12 hours ago

The boss of electric vehicle maker Polestar in Australia has hit out at federal plans to introduce a road-user charge (RUC) for EVs, accusing the government of rushing a policy that could penalise drivers who are trying to do the right thing.
Scott Maynard, Managing Director of Polestar Australia, said any move to slap electric vehicle owners with a per-kilometre fee must be 'fair and equitable' – and not just a quick fix to plug budget holes caused by falling fuel excise revenue.
'Motorists are already subject to stamp duty, registration fees, fuel excise, Fringe Benefits Tax, Luxury Car Tax in some cases, as well as tolls and parking space levies in the CBD,' Mr Maynard told News.com.
'Driving is an essential activity. It's important the government has a clear understanding of what it would be seeking to achieve with a road user charge.'
Mr Maynard's comments come amid a renewed push by the federal government to implement a distance-based charge for EVs, as the uptake of zero-emissions vehicles starts to cut into the billions generated each year by the fuel excise.
In 2024, Australia recorded 91,292 EV sales, a 4.7 per cent rise year-on-year, as more drivers began ditching petrol for electric.
While Tesla remained the market leader with 38,347 sales, the US brand saw a 16.9 per cent drop, facing stiff competition from Chinese carmakers like BYD and MG, whose MG4 model made a major dent in Tesla's dominance.
Plug-in hybrid (PHEV) and hybrid sales surged even more significantly, with PHEVs doubling to over 23,000 units sold, and hybrid cars climbing by 76 per cent to 172,696.
Polestar, however, saw a 30.3 per cent drop, reflecting just how quickly new taxes or charges could further shake confidence.
The Productivity Commission last week recommended urgent reform, warning that the current funding model for roads is 'unsustainable' and 'inefficient'. With fuel excise revenue in long-term decline, Treasurer Jim Chalmers is accelerating efforts to design a scheme that would apply to EVs and fill the looming shortfall.
But Maynard warned against introducing a system that unfairly targets regional drivers, or fails to account for vehicle emissions or weight.
'We don't want to have a situation where people who commute long distances from regional or rural areas are at a disadvantage to drivers who can afford to live in the inner city,' he said.
Instead, the Polestar chief argued, any charge should reflect both distance and vehicle weight to properly account for road wear and should especially target heavy emitters.
'If emissions reduction is the aim, then targeting heavy vehicles with higher emissions should be a priority,' he said.
Maynard also called for transparency, saying revenue from the proposed charge should be ring-fenced for road maintenance and infrastructure – unlike the current fuel excise which goes into general government coffers.
But while the EV industry is calling for caution, infrastructure leaders and policymakers argue the charge is long overdue.
Former Victorian Treasurer Tim Pallas, who previously introduced a per-kilometre charge in Victoria before it was struck down by the High Court, said EVs 'had a very substantial free ride' when it came to road funding.
'They're heavier and do more damage to the road network than internal combustion engine vehicles,' Mr Pallas told the Australian on Monday.
'But there's an environmental plus to EVs. Getting that balance right was key to us.'
He said the Victorian model charged EVs up to 2.6 cents per kilometre, amounting to about $300 a year – roughly half the average fuel excise paid by a petrol vehicle.
Mr Chalmers has confirmed he is working 'with states and territories on the future of road-user charging' and says any changes will be 'considered and consultative'.
Maynard agrees a new system is inevitable but insists it must not undermine Australia's transition to cleaner transport.
'I don't think any driver, electric or otherwise, will have an issue with a road user charge to replace fuel excise, as long as it is fair and equitable,' he said.