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The number of diesel and petrol vehicles in New Zealand is expected to halve by 2040 as electric vehicles take over. OPINION: Let's talk about petrol excise duty and road user charges – those fees that every motorist pays to help maintain our roads. They're going up. On September 30 the excise duty on petrol will rise 5.9 per cent to 72.4 cents a litre, and on October 1 the road user charge on diesel engined vehicles weighing less than 3.5 tonnes will also rise 5.9 per cent, to $68 per 1000 kilometres. Oh – and by the way, these fees will rise again by the same percentages next year and the year after. EVs don't pay petrol excise tax (obviously).
But is it time for them to start paying Road User Charges? That's unless the car is a pure electric vehicle – because they don't pay anything at all. Obviously pure EVs don't consume any petrol, and the Government has exempted them from paying any RUCs.
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The bureaucrats say this is intended as one way of encouraging people to buy the vehicles. This exemption will continue either until 2021 or until EVs comprise 2 per cent of our light vehicle fleet, whichever comes first. Energy and Resources Minister Megan Woods and Acting Associate Transport Minister James Shaw have jointly boasted that there are now 10,000 EVs on NZ's roads. Shaw added that this was an important milestone, particularly considering that just five years ago there was only 210 EVs registered here. Are EV owners now getting it too good - while other motorists pay more and more tax to maintain roads? Some of that 'EV' number includes plug-in hybrids of course, but there are still over 7000 new and used-import pure-EVs registered in NZ.
It is an important milestone, too. EVs emit at least 80 per cent fewer emissions than their fossil fuel equivalents, and there's going to be a lot more of them needed if NZ is going to meet its greenhouse gas target under the Paris Agreement of reducing emissions by 30 per cent below 2005 levels by 2030. But is it fair that this growing fleet of electric vehicles should be contributing nothing towards meeting the cost of the wear and tear they are causing to NZ's roading network? Now that the EV fleet has reached 10,000 cars, and at the current RUC rate, the battery-only vehicles are now not paying at least $7 million a year into the National Land Transport Fund. But they're out there using our roads, which is something that could be said to be totally removed from the climate change good they are achieving. And consider this. If our EV population continues to grow at such a rate that it reaches the 2 per cent of our light vehicle fleet before 2021, that will mean they will be bludging even more from our highway maintenance operation.
In its excellent report on an inquiry into how NZ can best transition to a low-emissions economy, the Productivity Commission heaped praise on the huge potential of the EV in helping meet this aim. It pointed out that if NZ's entire light vehicle fleet was replaced with EVs right now, our annual CO2 emissions would fall by 11 million tonnes. The report added there are currently three major barriers to the uptake of EVs: the high up-front cost of purchasing the vehicles, their limited range, and a lack of public awareness and understanding. No mention was made as to whether any exemption from paying RUCs might factor into any EV purchasing decision. With that in mind, now that the 10,000-vehicle mark has been reached, is it really appropriate that so many owners are being allowed to continue to pocket the millions of dollars that could be going into much-needed improvements to the roads they drive on?
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