Victoria EV tax rises for 2023-24, as EV rebate ends early

October 18, 2023: Victoria's EV road tax has been struck down

In a blow for the state, Victoria’s zero-emissions vehicle road-user tax has been deemed unlawful.

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It will become even more expensive to own an electric vehicle in Victoria from July 1.

According to VicRoads [↗], the Zero and Low emission Vehicle (ZLEV) road user charge will increase to 2.8 cents per kilometre (previously 2.6 cents) for full EV or 2.3 cents per kilometre (previously 2.1 cents) for plug-in hybrid electric vehicles.

Only trips made on and after July 1 will be subject to the new rate.

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The charge is a controversial mandatory fee to pay each year to the Victorian Government based on how much owners travel – which contributes to a general tax pool.

Similar to car registration, it is indexed every financial year based on the inflation rate.

Victorian EV and PHEV owners still receive a $100 discount for renewing their car registrations, though.

When the ‘EV tax’ was first legislated in 2021, the rate was 2.5 cents per kilometre for full EVs or 2.0 cents for PHEVs – with a major consequence for not paying the fee.

The new rate will come into effect a day after the $3000 Victorian EV purchase rebate is abolished on June 30.

June 8, 2023: Victoria to end EV subsidy

As Queensland doubles its offer, Victoria will end its $3000 electric vehicle rebate policy on June 30 – reportedly earlier than initially promised.

First uncovered by The Driven [↗] in budget papers, the state government will abolish its Zero Emissions Vehicle (ZEV) Subsidy with only 7692 handouts having been given out, according to Carloop data.

When it was introduced on May 2, 2021, the scheme was promised to end after “more than 20,000 ZEV purchases”. It was intended to be offered in stages for eligible new EVs priced under $68,740.

The government’s official Solar Victoria [↗] page now states that applications must be received by 6pm on June 30 via a participating car dealer in order to qualify for the rebate.

This move comes as the Queensland Government doubled the subsidy for buying a new EV to $6000 in April for eligible households.

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Victorian EV tax indexation coming

Victoria’s EV rebate previously helped offset the state’s contentious EV tax. However, a higher rate increase is expected from July 1.

This is because the EV tax is indexed based on inflation every new financial year – which has been particularly high this year due to the demand for goods and services outweighing supply in Australia’s economy, despite the Reserve Bank's attempts to curb spending by hiking interest rates.

For context, the Higher Education Loan Program (HELP) for current and former university students was recently raised by 7.1 per cent on June 1 – the second-highest indexation in more than 30 years.

No other state in Australia imposes an EV tax, but some plan to do so in the future.