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Feann Torr12 Jan 2021
NEWS

Toyota not sold on EV taxes

Australia’s dominant car brand says it’s ‘too early’ to begin taxing electric vehicles

As various Australian states move towards a road user tax for electric vehicles, the country’s largest car company, Toyota, has spoken out on the issue, arguing that such measures are punitive and premature.

Toyota does not yet offer an EV in its Australian showrooms, but the Japanese car-maker sold almost 55,000 petrol-electric hybrids here last year – about a quarter of its total volume and 85 per cent of all electrified vehicles in the market – and has indicated that it could accelerate plans for plug-in models in the years ahead.

Asked about moves by several state governments to hit EVs and plug-in hybrid electric vehicles (PHEVs) with a road user tax – as seen late last year in Victoria, South Australia and New South Wales – Toyota Australia president and CEO Matthew Callachor said it was counterproductive at this stage.

“It seems early to start putting taxes on these vehicles at this very early stage,” he said.

Plugging in could become more costly as EV taxes loom

“On top of that it’s inconsistent from state to state, it’s a different tax from state to state. So at this early juncture, we personally think it’s too early to do this.”

EV road user taxes are on the national agenda because those vehicles contribute reduced or no revenue via fuel excise, leaving all other motorists with traditional combustion-engine vehicles to shoulder the tax burden at the fuel bowser.

Heading up the brand that has been the market leader for the past 18 years, Callachor admitted that a move away from fuel excise to other forms of taxation for road use was inevitable.

“There certainly needs to be a broader perspective on road taxes into the future,” he said.

The Tesla Model 3 is Australia's most popular EV

“I think longer term, as EVs grow in popularity on the road, there clearly needs to be a methodology by which roads can be maintained, a revenue base itself.

“But really to just pluck one element [EVs] I think is a bit pre-emptive.

“The FCAI has also been working on a broader perspective of EV taxing and also entire road user charges. And so further into the future, yes there is going to be something necessary.”

Callachor said the tiny take-up of EVs – accounting for less than one per cent of the market in 2020 – would suggest a specific tax was not a great way to improve EV adoption rates in this country.

“Despite the fact that we’ve had some good increases in electric vehicles this year, it’s off a very, very, very low base. And there is still a lot of concerns in the general market about EVs and adoption rates off this very low base,” he said.

Some argue that only the rich can afford EVs so a tax is fair

Federal Chamber of Automotive Industries (FCAI) chief executive Tony Weber has been a strident critic of EV road user taxes, but acknowledged that the decline in excise must be addressed.

“Other countries bend over backwards to increase the use of EVs and other low-emission vehicles because they recognise the benefits,” he said.

“The FCAI recognises that the decline in excise, the taxation of motorists and their vehicles, is a long-term issue that needs to be addressed. We also understand that road user charging may play a role in Australia’s future tax regime.

Toyota says an EV tax is premature

“However, such a transition needs to be undertaken in a holistic and nationwide manner, recognising the importance of EVs and other low-emission vehicles.

“Let’s not kill EVs in their infancy.”

According to Infrastructure Partnerships Australia chief executive Adrian Dwyer, EV taxes are good idea.

“At its heart, this reform is about fairness,” he said.

“It’s not fair that right now a family in a Mazda or Kia is paying to use the roads while a millionaire in an electric Tesla, Porsche or Jaguar gets a free ride.”

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