Driving an EV in VIC is no longer a cost saving slam dunk thanks to the EV tax

Paid my stupid ZLEV road-user charge (aka EV tax) for the 2nd time this year. If you don’t know, this is a fee on top of my car’s registration that the Victorian government set up so electric car drivers “pay their fair share”.

Anyway, it’s now 2.8c per kilometre and when fuel prices are relatively low, I’m paying almost the same as a hybrid car to drive around, negating any savings I have from owning an EV.

A 2021 Corolla Hybrid’s combined fuel economy is 3.6L/100km according to the Green Vehicle Guide. A 2020 Tesla Model 3 Standard Range’s energy consumption is 13.2 kWh/100km according to the same database.

A litre of E10 fuel right now is $1.67/L in the RACV’s Arevo app (why don’t we have a mandatory fuel price database like NSW?!), which I can stack with an additional 5c/L off due to being an RACV member to get the price down to $1.62/L.

My electricity is 23.3299c/kWh (and probably only going to go up in the near future). Putting all that info together, to move 100km:

  • Corolla Hybrid ($1.62/L @ 3.6L/100km) = $5.83
  • Tesla Model 3 (23.3299c/kWh @ 13.2kWh/h) - $3.08 + $2.80 EV tax (2.8c x 100km) = $5.88

It costs more to drive my EV off grid power than it does a Hybrid on petrol. What the hell?!

Yeah, there’s ways to save on electricity, like using solar, which I do, but it’s tough in winter and even in summer you gotta be home during the day to use it, or going on a special EV plan that has super cheap off-peak charging, but you cop higher prices during peak times and/or shitty solar export rates. And yes, fuel goes up, but it also goes down and there’s coupons galore if you’re smart - the government’s road usage fee only ever goes up.

EVs do fare better for bigger vehicles, e.g:

  • BYD Atto 3 (23.3299c/kWh @ 16kWh/h) - $3.73 + $2.80 EV tax (2.8c x 100km) = $6.53
  • Toyota RAV 4 Hybrid ($1.62 @ 4.7L/100km) = $7.614

$1.084/100km saved - $216.80 a year if doing 20,000km, but the RAV4 is $9,722 cheaper than the Atto 3 Extended Range (480km WLTP range). It would take decades to get that saving back in fuel alone. For the first 5 years, the Atto 3 will set you back $1,384 in servicing (12m/20k intervals), compared to the RAV4’s (12m/15k intervals) $1,300. Not a huge saving there either.

BYD Atto 3 servicing schedule

Combine the weak financials with the real impracticalities of owning an EV for many people, particularly those who cannot charge at home and those who can’t get solar, it’s hard to recommend an EV to people now that the cost savings aren’t there.

I’m not saying an EV can’t save you money. In particular circumstances it sure can. Plus driving an EV is way nicer in my opinion and it’s (slightly) better for the environment. But it’s not a slam dunk purchase in Victoria like it is in other states like QLD & NSW where they have loads of incentives and are investing heavily in public EV charging. Victoria is doing worse than nothing, it’s actively punishing those who buy an EV.

The real issue isn’t how much money drivers save, but the impact it’ll have on our environment long term. A hybrid car sold today will spew out CO2 for decades until it’s taken off the road. An EV purchased today gets cleaner and cleaner as the grid moves towards 100% renewables.

By adding a tax to electric cars, the Victorian state government is slowing down the adoption of them, which means it’ll take longer for the carbon emissions generated by combustion engines to go away. While other states are doing incredible things to get more EVs on the road so their carbon emissions are reduced sooner rather than later, Victoria is kicking the can down the road by taxing us 2.8c/km and no longer offering any purchase incentives.

If the state is serious about its net-zero greenhouse gas emissions targets, it would get rid of the EV tax and re-instate some sort of purchase incentive so people start replacing their petrol cars with zero emissions cars now, not in 5 or 10 years time.