Polestar Australia wants a road-user charge for all drivers, not just EV owners

Polestar pushes for an all-driver charge

Polestar Australia managing director Scott Maynard says the company has been working with government officials on the design of a proposed federal road-user charge, and that it should apply to every motorist rather than only electric vehicle owners. "We see the inevitable introduction of a road-user charge, and we feel that it's critical that [the] charge be levied against all road users, and not just electric vehicle owners," Maynard told CarExpert. ¹

Maynard's argument, as reported by CarExpert, is that Australia has no congestion tax or comparable pollution tax, so a road-user charge should be levied "fairly and evenly across all users". He also suggested any new charge could be accompanied by a review of the fuel excise, which would remain in some form as a congestion or output-style tax so electric vehicles stay cheaper to run. "That's, I think, really important," Maynard said. The federal government currently adds 53.7 cents per litre to petrol and diesel sales, a rate indexed twice a year against CPI figures, according to CarExpert. ¹

The government's position: work towards it, but carefully

In August 2026, Climate Change and Energy Minister Chris Bowen addressed the National Press Club and said Australia should work towards a road-user charge, while stressing the design and timing need care. "It's a very big undertaking. It should not be rushed unnecessarily. The Treasurer and I are of one mind on that," Bowen said, according to CarExpert. He added that the EV industry's position is not opposition to a charge in principle, but a demand that it be planned well and done right. ¹

The federal position has shifted over the year. CarExpert reports the government is devising a road-user charge for passenger vehicles that could apply to all drivers, with the surge in EV sales reducing the pool of motorists paying excise on petrol and diesel. By contrast, Torque Cafe reports that Treasurer Jim Chalmers raised the prospect of a national charge last year but the work was put on hold in May, with Transport Minister Catherine King telling the ABC's Insiders program the government wanted to help drive people towards more fuel-efficient vehicles. ¹⁵

The commercial backdrop to the revenue debate has also changed quickly. Torque Cafe reports that in the month before its September 2026 article, EVs were the most popular fuel source in the new-car market for the first time ever, outselling petrol and diesel vehicles separately, citing rising fuel prices from conflict in the Middle East and a broader array of fuel-efficient vehicles in showrooms as factors. ⁵

AEVA's universal charge proposal

The Australian Electric Vehicle Association has separately called for combustion-powered car owners to keep paying fuel excise on top of a forthcoming distance-based road-user charge, framing the excise as a "pollution tax". News.com.au reports the association says a charge applied only to EVs would erode the cost advantage of electric drive, and that more than 85 per cent of its members back applying road-user charges to petrol, diesel and hybrid drivers as well as EV owners. ²

AEVA policy convener Dr Chris Jones argues that two vehicles of the same weight driven the same distance should pay the same road-user charge, but that a vehicle burning petrol or diesel should additionally pay for its pollution. The association's policy, detailed in a Pearls and Irritations piece authored by Jones, proposes a universal charge based on vehicle mass and distance, eventually reaching 3c/tonne-km for light vehicles and 0.5c/tonne-km for heavy vehicles, introduced gradually alongside the existing excise. ²³

Torque Cafe reports the AEVA estimates the average vehicle pays about 5.3c/km in fuel excise, and calculates its proposed 3c/tonne-km rate would equate to an annual charge of $858 for a 2.2-tonne vehicle travelling 13,000km a year, applying to vehicles under 4500kg gross vehicle mass. The association also criticises the NSW model, with Jones arguing it would mean an EV paying more per kilometre than a conventional petrol hybrid, and an electric motorcycle paying the same rate as a three-tonne electric SUV despite negligible infrastructure impact. ⁵

NSW charge and the Victorian precedent

The NSW Government plans to introduce its own road-user charge on electric cars and plug-in hybrids from July 2027, set at 3.095 cents per kilometre for battery electric vehicles and 2.476 cents per kilometre for plug-in hybrids, as reported by CarExpert and news.com.au. AAP reports the measure was expected to collect $214 million in its first two years, and that a NSW inquiry into road-user charges heard calls from experts to broaden the charge to all vehicles based on weight, partly to reduce the risk of a legal challenge. ¹²⁴

That concern reflects the Victorian precedent. Victoria introduced Australia's first state road-user charge for electric vehicles in 2021, at 2.8c/km for EVs and 2.3c/km for plug-in hybrids, before the High Court struck the scheme down in 2023, ruling that only the federal parliament can impose duties of customs and excise. Victoria ended the scheme and issued refunds, news.com.au reports. University of Sydney constitutional law professor emerita Anne Twomey told the NSW inquiry the ruling was flawed, and suggested the state could avoid a similar outcome by designing the charge to fund road maintenance and applying it to all vehicles on a weight basis, though AAP reports she said fuel excise should then be removed to avoid an unfair burden. ¹²⁴

Opinion at the NSW inquiry was divided. AAP reports representatives of Infrastructure Partnerships Australia and the NRMA supported the charge as designed, with NRMA policy general manager Robert Giltinan arguing delays would make implementation harder. The Electric Vehicle Council, by contrast, said a charge should not be introduced until EVs make up 30 per cent of the national fleet, which chief executive Julie Delvecchio said could take a decade or more, warning that an earlier introduction may jeopardise a five million EV target by 2035. ⁴

How the fuel excise works, and why revenue is in question

Fuel excise is a federal tax collected at the wholesale level on petrol and diesel and passed to motorists at the bowser, funding consolidated revenue including land transport investment, motoring body RACQ explains. RACQ analysis of the May 2026 budget papers found fuel excise raised $17.2 billion in FY26, with $13.9 billion, or about 81 per cent, spent on land transport. Torque Cafe separately cites $25 billion raised across the 2023-24 financial year. ⁶⁵

The size of the 2026 temporary excise reduction is reported differently by the available sources, and the discrepancy is unresolved. RACQ says the government reduced the excise to 20.6 cents per litre in April 2026, and that from 1 July it increased to 36.6 cents per litre – a 16 cents-per-litre discount off the full rate, which RACQ puts at 52.6cpl in mid-2026. Canstar, by contrast, reports the excise was halved to 26.3 cents per litre from 1 April 2026 for three months. Separately, CarExpert and news.com.au cite the current full rate at 53.7cpl, slightly above RACQ's mid-2026 figure. ⁶⁷¹²

RACQ says fuel excise revenue will decline over time as EV adoption grows, though the most recent Federal Budget forecast excise revenue to increase across the forward estimates, at annual growth below inflation. Long-term, RACQ is asking for the excise to be replaced by a universal per-kilometre road-user charge, introduced on EVs first and expanded incrementally to all vehicles. That differs from the AEVA and Polestar positions, which both want a road-user charge introduced while the fuel excise is retained in some form. Canstar reports the temporary reduction ran for three months from 1 April 2026, while RACQ describes a staged return towards the full rate from 1 July. ⁶¹⁷