Tesla urges Australia to apply road-user charge to all cars, not just EVs

Tesla's call for a universal charge

Tesla Australia wants drivers of petrol, diesel and hybrid vehicles to pay a road-user charge alongside electric vehicle owners, arguing in a submission to a federal parliamentary inquiry that an EV-only charge could distort perceived costs for motorists and penalise EV buyers, as first reported by CarExpert. ¹

The submission, one of hundreds to the Select Committee on Productivity's inquiry, states: "If the Government develops a national road user charge, [it must] apply it universally to all vehicles on the road, phased-in, and the rate (c/km) per determined based on real road funding costs." Tesla also says it "considers the productivity constraint on increased electrification of transport and energy as a national issue". ¹

Tesla frames its interest directly: the maker of Australia's best-selling EV, the Model Y, says the charge must extend beyond electric vehicles if it is to encourage uptake of zero-tailpipe-emission vehicles. The submission argues that rather than motivating drivers towards public transport or carpooling, an EV-only distance levy "acts as a financial penalty for decarbonising personal transport, encouraging motorists to retain or revert to internal combustion vehicles that do not face an explicit per kilometre surcharge". ¹

How a road-user charge would work

One proposal for a road-user charge would see EV drivers charged per kilometre travelled, with motorists required to report annual mileage or use in-car GPS tracking to calculate distance driven, according to CarExpert's reporting. ¹

Under an EV-only scheme, petrol and diesel vehicles would not face the charge, with owners instead paying fuel excise, currently 53.7 cents per litre. Tesla's submission instead proposes retaining fuel excise while introducing a universal charge, meaning owners of newly registered petrol, diesel and hybrid vehicles would eventually pay both. ¹

Tesla argues fuel excise is ineffective in discouraging petrol or diesel use because it is hidden within the pump price. "Because fuel excise is hidden within the aggregate pump price, consumers remain largely inelastic to the tax component of their travel, treating fuel as a bundled cost rather than an identifiable usage fee," the submission states. It argues a transparent, distance-based charge in cents per kilometre would introduce price salience that fuel excise lacks, but says "this price signal is productive only if it applies universally across every passenger vehicle powertrain". ¹

The submission points to the 2.97c/km rates previously attempted at state levels for electric cars only, arguing that levying a distance charge exclusively against zero-emission vehicles "introduces a distortionary price signal". ¹

The government's position and NSW's EV tax

A road-user charge was raised publicly by federal Treasurer Jim Chalmers in 2025, when the government said it was accelerating work on how it would be implemented. Speaking on the ABC's Insiders in August 2025, Chalmers said: "Our focus in road user charging is on electric vehicles… We're not trying to work out ways to double-tax internal combustion engines." He said the aim was to ensure growing numbers of EV drivers contribute to road upkeep, calling it fundamentally about making the system fairer. ¹

Progress on a national charge slowed ahead of this year's federal budget, with federal Transport Minister Catherine King suggesting in April that introducing it could discourage EV uptake. Her comments came days after the government enacted a three-month fuel excise reduction in response to record pump prices tied to conflict in the Middle East; the relief was extended at a reduced level for one month past its original June 30 end date before the full rate was restored on August 3, 2026. ¹

Separately, the Australian Financial Review reported in July 2026 that Tesla says NSW should scrap its planned electric vehicle tax and that Australia should adopt a national road-user charge paid by all drivers, including petrol car owners. A NSW parliamentary inquiry has exposed widespread concerns about the state's EV and hybrid tax, which is legislated to begin in July 2027, and has sparked calls for national-level reform that could result in drivers being charged for road use on top of petrol excise. ²¹

EV market context and industry support

Tesla's submission lands as EVs reach record market share in Australia. Electric vehicles made up 24.2 per cent of all new-vehicle sales in September alone, according to figures reported by CarExpert, more than petrol models (23.9 per cent) and diesel models (23.1 per cent). The Model Y was the first EV to top Australia's monthly sales chart, beating the Ford Ranger in May 2026 and again in June and August. ¹

Tesla's position echoes comments from Polestar Australia boss Scott Maynard, who told CarExpert: "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." He argued that because Australia has no congestion tax or pollution tax, a road-user charge should be levied fairly and evenly across all users. ¹

The RUC is widely discussed as a way of recovering revenue lost as drivers switch to EVs and no longer buy petrol or diesel, which attract fuel excise for every litre sold. Whether a national charge proceeds, and whether it applies universally or only to electric vehicles, remains unresolved: the inquiry submissions, including Tesla's, feed into deliberations that have not yet produced a government decision. ¹