Morning all, I read an article that the government are considering how to tax ev owners moving forward. One of the suggestions was a pay per mile scheme. Has anyone else read any articles on what the future is likely to be for ev owners once incentives are gone.
In Victoria, Australia, we have a pay per km tax which is almost triple what we should be paying. These are Australian figures but you could work out the situation in Britain. It looks at battery and petrol in terms of energy equivalence. The average EV owner in Victoria is paying about twice as much for fuel as a petrol car owner in energy terms. (One interesting thing to note is that the MG ZS EV short range battery holds energy equivalent to about 4.5 litres, 1.12 gallons, of petrol.
Cost of petrol in Victoria should be raised to $3.52 per litre to maintain parity with electric vehicles.
Cost of petrol
In these days of petrol car drivers complaining about the price of petrol, how would they like to pay $3.52 per litre? We do. Let us compare petrol and electricity in energy terms. Say a litre of petrol costs $1.67.* Of that, 42 cents is excise duty (actually 42.7 but rounded down.)
Petrol/Electricity Conversion
The energy in a litre of petrol is 9.1 kwh. Thus, a “litre equivalent” of electricity is 9.1 kwh.
Cost of Electricity
Assuming we are paying 25 cents per kwh** we are looking at a cost of $2.27 per litre equivalent. So in energy terms we are already paying 36% more for our electricity than petrol users are paying for their petrol. (Note: we are paying 36% more to buy a cleaner form of energy!)
EV tax compared to petrol excise
Now how much tax are we paying per litre equivalent of electricity? If we take a typical EV range figure of, say, 18.2 kwh per 100 km we use 9.1 kwh i.e. one litre petrol equivalent per 50 km. At 2.5 cents per kilometre tax we pay $1.25. That is an additional tax of $1.25 per litre; the additional tax is 197% more than the petrol excise (42.7 cents). Whereas a motorist may pay $1.67 per litre (which includes the excise), the EV owner is paying $3.52; $2.27 plus $1.25 tax, totalling $3.52.
*State average as at 27 January 2021
** Typical general rate price of home electricity. Obviously, some with solar pay less and others who charge at charging stations pay more.