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Government considers road user charge as EV adoption accelerates
drive.com.au, 6 Aug '26Headlines 6 Aug 2026
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Australia's Minister for Climate Change and Energy, Chris Bowen, said a road user charge is under consideration, stating that no one in the electric vehicle (EV) industry has told him they oppose the policy.
However, it remains unclear how the government would implement a road user charge to ensure that all vehicle owners contribute to road use in proportion to their use of Australia's public roads. Bowen told the media that the government's plans for implementing a road user charge had not yet been finalised.
"I think a road user charge is something that Australia should be working towards. It's got to be done right. It's got to be done carefully, and that includes timing. It's a very big undertaking. It should not be rushed unnecessarily, the treasurer and I are of one mind on that. That's why it wasn't in the budget because it needs more work. It's a conversation that we'll continue to have," Bowen said.
Currently, a fuel excise is applied to every litre of fuel sold in Australia. The principle behind the fuel excise is that vehicles driven more frequently consume more fuel and therefore contribute more towards funding the road network.
Heavier vehicles, which cause greater wear to roads, also typically consume more fuel.
However, as more vehicles become electrified and fuel-efficient, resulting in lower or no fuel consumption, an alternative system, such as a road user charge, may be required to ensure motorists contribute towards road use and provide funding for road maintenance and infrastructure.
In his address to the National Press Club of Australia, recently, Bowen said there is support for a road user charge, provided it is implemented "right".
"I haven't found anyone who really disagrees with the need for a road user charge. No one in the EV industry says 'we oppose a road user charge' ever. They say do it right, plan it well. Get all the designs right, and when the time is right, it'll be an important part of ensuring that the transport revolution in Australia, which is, you know, can't be turned back despite the best wishes of some in Canberra, in Parliament House, can't be turned back because the Australian people are well on the journey. We've got to make sure it works. And part of that is a sensible longer-term discussion about the impacts on government revenue, state and federal, including a road user charge. It's important it happens, but it's important to be done right. It's important it's not rushed in a way which threatens getting it right," Bowen said.
Polestar Australia's Managing Director, Scott Maynard, told the publication earlier this year that he believes a road user charge should apply to all vehicles and be based on vehicle weight.
"It would make sense to us if a road user charge was deployed unilaterally across the industry, and not a tax on electric vehicles, so that's what we would be hoping for, but it's looking less and less likely. It shouldn't be applied against [just] electric vehicles, it should be applied across the board, and it would have made sense to take this opportunity to reconcile all of the fees, charges, taxes, and duties that are applied when a motorist seeks to buy, register and drive a car on Australian roads," Maynard said.
New registrations of fully electric vehicles nearly matched those of petrol-powered cars last month and exceeded registrations of both plug-in hybrid and conventional hybrid vehicles.
Electric vehicles accounted for 21.7% of new vehicle sales in July, ranking behind diesel-powered vehicles.
Interest in electric vehicles increased among new-car buyers following concerns over fuel security and rising fuel prices after the outbreak of conflict in the Middle East earlier this year.
