Electric vehicles charged for every kilometre they drive under new state plan

South Australians will be paying dearly to drive their electric cars after the state government passed a new tax on the vehicles.

Owners of electric cars will almost certainly be slugged for every kilometre they drive after state parliament’s upper house voted to introduce a new tax on the vehicles.

South Australia would be the third state to adopt such a tax, which was passed the Legislative Council on Thursday. But the charge would not come into effect until either July 2027 or the time that electric cars make up 30 per cent of the market – whichever happens sooner.

Treasurer Rob Lucas said the successful passage of the government’s reforms was “a critical moment for the future of South Australia”.

“The pace of change is overwhelming – where the future is zero emissions, the future is electric vehicles,” he said.

“As the state transitions to a higher concentration of zero and low-emission vehicles, it’s vital to ensure all vehicle owners, regardless of what car they drive, contribute to the upkeep of our roads into the future.”

Among groups supporting the reform is peak motoring body RAA, which said the tax was in line with the direction of motoring.

“RAA lobbied for increased incentives, which were adopted, as well as delaying the introduction of the road user charge, because we recognise electric vehicles are the future of motoring,” spokesman Mark Borlace said.

Amendments to the original Bill include the delayed introduction, as well as $3000 subsidies for the first 7000 electric cars sold, and an exemption from registration fees.

Opponents of the tax said there was “no need” for the parliament to rush it through, which is currently the subject of a High Court constitutional challenge.

“While important improvements have been secured since the government first announced their EV Tax, the parliament has missed an opportunity to genuinely support electric vehicles in South Australia,” the Australia Institute’s SA director Noah Schultz-Byard said.

Clean energy advocacy group Solar Citizens welcomed the stronger financial incentives for electric car buyers but warned the package would still leave local buyers paying more than in other states.

The Bill passed with the support of SA-Best MLCs Connie Bonaros and Frank Pangallo, as well as independent MLC John Darley, but Labor and the Greens opposed the Bill.

Modelled on similar schemes interstate, the charge would be calculated at 2c a kilometre for plug-in hybrid vehicles, and 2.5c a kilometre for any other electric vehicles.

The rates would be indexed and the charge will be calculated and billed in arrears as part of the registration process. The Bill will go to the lower house, which had already voted in favour of its original form, to consider the amendments.