No more free ride: EV owners to pay road user charges from April

The New Zealand government has announced that owners of electric vehicles (EVs) and plug-in hybrids (PHEVs) will have to pay road user charges (RUC) from April 1, 2024. The decision comes as the number of EVs on the road has reached 2 percent of the light vehicle fleet, triggering the end of the exemption that was introduced in 2009.

Transport Minister Simeon Brown said the change was necessary to ensure fairness and equity among road users. He said that petrol tax and RUC are paid by road users to contribute to the costs of maintaining and improving the land transport system, but EVs and PHEVs have been exempted from RUC.

“This means that other road users have been subsidising them, which is unfair and unsustainable,” he said.

He added that the government was committed to transitioning all vehicles to RUC in the future, as part of the National-ACT coalition agreement.

No more free ride: EV owners to pay road user charges from April
No more free ride: EV owners to pay road user charges from April

How much will EV owners pay?

EV and PHEV owners will have to buy a RUC licence and display it on their windscreen from April 1, 2024. They will be able to buy their licence online or at an NZTA agent.

The RUC rate for light EVs will be $76 per 1000km and for PHEVs it will be $53 per 1000km. The reduced rate for PHEVs reflects that they also pay fuel excise duty when they buy petrol.

The first time an EV owner buys their RUC licence, they will have to give their odometer reading at the time of purchase. If they give an inaccurate reading, they may be invoiced for any difference at their next WOF.

EV owners will have until May 31, 2024 to buy their licence without risk of penalty.

What are the impacts?

The government expects that the RUC will generate about $30 million in revenue in the first year, which will go towards the National Land Transport Fund.

The RUC will also have an impact on the cost of owning and operating an EV or PHEV. According to the NZ Herald, the average EV owner will pay about $1000 a year in RUC, compared to about $300 a year in petrol tax for a similar petrol car.

However, the government said that the RUC will not affect the environmental benefits of EVs, which emit less greenhouse gases and air pollutants than petrol or diesel vehicles.

The government also said that it will continue to support the uptake of EVs through other measures, such as the Clean Car Discount, the Low Emission Transport Fund, and the Low Emission Vehicles Contestable Fund.

How are EV owners reacting?

The announcement has drawn mixed reactions from EV owners and advocates. Some have welcomed the move as a fair and inevitable step, while others have criticised it as a disincentive and a betrayal.

Mark Gilbert, the chair of Drive Electric, a group that promotes EVs, said that the RUC was a reasonable way to fund the transport system, as long as it was accompanied by other incentives and policies to encourage EV adoption.

“We don’t want to see the RUC as a standalone measure that could dampen the enthusiasm for EVs,” he said.

However, Tim Jones, the co-convenor of the Better Futures Forum, a group that advocates for a low-carbon future, said that the RUC was a bad idea that would discourage people from switching to EVs.

“It’s a slap in the face for EV owners who have been doing their bit to reduce emissions and pollution,” he said.

He said that the government should have waited until EVs reached a higher share of the vehicle fleet, and that it should have introduced a congestion charge or a carbon tax instead of a RUC.

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