RUC makes little difference to EV sales.
Under a year ago I wrote this piece Would RUC for EVs harm sales? largely in reference to concerns in Australia from the Electric Vehicle sales lobby that Australian states investigating road user charging (RUC) based on distance, for light vehicles; would significantly reduce consumers' propensity to buy such vehicles.
Dr Jake Whitehead from the University of Queensland apparently conducted a study which was cited in an article in Driven that claimed it would hurt sales by 25%, claiming that it would be perceived by drivers as adding $4,000 on the cost of owning and operating an electric vehicle. I demonstrated in my previous article that this was highly questionable, because no purchasers of petrol powered cars estimate the fuel tax they would pay on top of the cost of owning and operating the car. If they did, it might be around A$367 a year for a new petrol Hyundai Kona driving the average annual 13,838km of a car in Victoria. This compared to around A$346 for an equivalent EV paying the Victoria state RUC. Sure I understand Whitehead's estimate, but it simply isn't a valid comparison to think anyone buys a car thinking about the lifecycle costs of charges associated with using the road (although buyers of many commercial vehicles do make such estimates).
However, there is now some actual evidence, with the latest sales data on electric vehicles in Australia. You see Victoria introduced RUC (known as the ZLEV road-user charge) at A$0.025 per km for battery-electric EVs (BEVs) and A$0.02 per km for plug-in hybrid vehicles (PHEVs). Both also obtain a registration fee discount of A$100 a year.
The data for 2021 indicates that 6,396 EVs were sold in Victoria, with 7,430 sold in NSW and 5,342 in Queensland. Given RUC was introduced in July 2021 if Dr. Whitehead's assessment were valid you would expect a significant decline in EV sales relative to other states, but that isn't what happened.
You see the 7,430 sold in NSW compared to the total passenger vehicle fleet in NSW is around 0.17% of all vehicles. Whereas the 6,396 sold in Victoria, compared to the total passenger vehicle fleet in Victoria is around 0.16% of all vehicles. If it made a difference it was barely discernible, and undoubtedly less relevant than other factors.
In the ACT, the number of EVs sold comprised 0.37% of all passenger vehicles registered in the territory, the highest of any state and territory, but that's not so surprising. The ACT has relatively high affluence, motor vehicle registration is free for two years for EVs, with a 20% ongoing reduction.
Queensland has a slightly higher number of EVs as a proportion of all passenger vehicles at 0.18%, but that's close enough to NSW and Victoria to suggest that there isn't a significant difference in policy impacts.
Western Australia, Tasmania, South Australia and Northern Territory all have much lower sales, as a proportion of the total passenger vehicle fleet, than the other states, ranging from 0.1% to 0.05%. In shortsthere is a great deal of reluctance to buy EVs in Australia, but the wealthiest eastern states/territory have better sales. Note that both NSW and South Australia announced they would introduce RUC from 2027.
So from that I conclude that RUC in Victoria has made virtually zero difference to EV sales in the state.
That's with a RUC rate of A$0.025 which is equivalent to US$0.029 per mile or £0.02 per mile or €0.016 per kilometre. That is higher than some US states have implemented or are proposing, but much lower than would be a replacement rate for fuel taxes in any European countries.
A higher rate might make a difference to sales. Certainly New Zealand has maintained an exemption from its RUC system for EVs, which would have resulted in them being charged NZ$0.076 per km (A$0.071 per km, €0.045 per km, US$0.08 per mile or £0.06 per mile). Exemption EVs from RUC has undoubtedly contributed to greater sales per capita than in Australia, but I suspect other factors, including price of electricity and the network of charging points matter as well (plus less range anxiety in a smaller jurisdiction).
What it means is that RUC, as a policy tool, needs to be considered within the context of a wide range of pull and push factors for jurisdictions that want to encourage sales of EVs.
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