22 May 2024

Aussie motorists to save $95 billion in fuel costs by 2050, but there's a dark side

| James Coleman
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Toyota EV

A different kind of filling up. Photo: Toyota Australia.

Who, or what, exactly will be paying for the roads in 30 years’ time? It’s a question this week’s Budget has left unanswered.

The Albanese Government’s proposed New Vehicle Efficiency Standard (NVES) swept through Parliament on Thursday without protest or amendment, two days after it was allocated $154.5 million over six years – and then $12.6 million per year ongoing – in the 2024-25 Budget.

You’ll have heard the headlines.

Russia is on its own now as the only developed country in the world to require no emissions standards from its new cars.

From January 2025, car brands will have four years to bring their average annual emissions down to no more than 58g CO2/km for their passenger cars and 110g CO2/km for light commercial vehicles (including large 4WDs and dual-cab utes), or pay a $100 penalty per gram over the limits.

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This is designed to reduce emissions from new passenger vehicles by more than 60 per cent by 2030, and roughly halve the emissions of new light commercial vehicles over the same period. By 2050, it will have saved 321 million tonnes of CO2 from entering the atmosphere.

Close to the all-important hip pocket, Australian motorists are predicted to save around $95 billion in fuel costs by 2050.

But that’s provided you’re in one of the new EVs. For those who are left, it might be about to get a lot more expensive.

First, there are the fines.

The best-selling vehicle in Australia is the Ford Ranger and, in its most efficient four-cylinder guise, it emits 189g of CO2/km. If Ford can’t bring this figure down, or import plug-in hybrid or EV models by 2029 to compensate, by 2029 it will pay a fine of $7900 per Ranger.

Many of the big players, including Isuzu and Toyota, have already said they’ll have to pass this cost on to the consumer (in what they dubbed the ‘ute tax’).


Ford will be paying a $7900 fine per Ranger if they can’t work out a way to slash average emissions by 2029. Photo: James Coleman.

Second, there is fuel excise.

The Budget estimates the NVES will result in a $470 million total reduction in fuel excise collections over its first three years.

When the former Coalition government halved the fuel excise rate to 22.1 cents per litre ahead of the 2022 election, that cost them $5.6 billion in foregone revenue. Imagine the figure when motorists are paying $95 billion less at the bowser by 2050.

A road-user charge, applied to EVs on a per-kilometre basis, looks like the obvious choice to make up this shortfall.

The Victorian Government tried this in 2021, when it imposed a 2.8 cent levy for every kilometre driven by an electric or hydrogen car, and 2.3 cents per kilometre for plug-in hybrid vehicles.

Within two years, the High Court of Australia had thrown it out and ruled any future road-user charge was up to the Commonwealth.

High Court of Australia

The High Court of Australia ruled Victoria’s road-user charge was unconstitutional. Photo: Michelle Kroll.

It’s why the Australian Automobile Association (AAA) was disappointed to not see mention of it in this year’s Budget.

Ahead of the reveal on Tuesday, AAA managing director Michael Bradley said they would be looking to see “whether the government has a plan to ensure that everybody who uses our roads is paying their share toward their upkeep”.

The papers outlined an investment of $120 billion in road and rail projects across the country, followed by a continued annual investment of $1 billion in the ‘Roads to Recovery’ program, $150 million for the ‘Black Spot Program’, $200 million for the ‘Safer Local Roads and Infrastructure Program’ and $32 million over six years for the National Road Safety Data Hub.

Included in the NVES figures, there was also $60 million to roll out EV chargers at car dealerships across the country.

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It’s understood the government has postponed any decision on a road-user charge until at least after the next election, not wanting to put off EV buyers just as they’re trying to encourage them.

“It was disappointing that Australians heard nothing about the government’s plan for a more affordable, sustainable, and equitable system for paying for our roads,” Mr Bradley said.

All in all, the AAA described the Budget as a “missed opportunity”.

Mr Bradley added the outdated “legacy” import tariffs and Luxury Car Tax were only making the situation worse.

“Abolishing these protectionist measures must form part of a broader reform of tax arrangements, which should seek to ensure all Australians pay their fair share toward the upkeep of the road system and spread the cost burden more evenly across the community.”

Tesla car

The Luxury Car Tax threshold was increased to $89,332 for “fuel-efficient vehicles” in 2023-24. Photo: James Coleman.

Import tariffs and Luxury Car Tax (LCT) are expected to raise $1.69 billion this financial year and while this will drop to $1.11 billion in 2024-25, it will then head back the other way to net $1.33 billion in 2027-28.

The Australian Automotive Dealer Association (AADA), also based in Canberra, also called for a “comprehensive” overhaul of automotive taxes.

“Particularly the Luxury Car Tax which often applies to more efficient vehicles and applies to optional features which discourage consumer uptake of safety features,” AADA CEO James Voortman said.

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The elephant in the room here is still caravans. No-one wants to write about what the impact will be, or how they will come up with an alternative to participate in what is a massive industry and pastime in Australia.

You can power your caravan off solar as well.

Capital Retro11:16 am 26 May 24

To run the 3-way fridge 6 hours a day, only.

i’ve owned an ev for the past five years have no regrets. I’ve saved money on fuel but that’s not the only reason I bought one. I just love some of the benefits that come with ownership some of the simplest things for example pal being able to preheat the car in less than a minute when I go out early morning drives and one pedal driving

My car is three years old. Chris Bowen wants me to fork out 10s of thousands of dollars on a more fuel efficient car of EV because I will save money. A comedy club is missing its comedian

Almost like this law is meant to progressively improve emissions over time, rather than force people to buy new cars now.

Weird huh.

How are you going to improve current levels of emissions if you do not buy a more efficient car? Hence, how is forking out for a new vehicle a saving on your hip pocket? Fine if you need a new car, but in my circumstance, not a valid argument.
John Cadogan does an excellent job of explaining the scam here:
He’s an engineer too


“Fine if you need a new car, but in my circumstance, not a valid argument.”

Slowly for you…..your specific situation doesn’t apply to everyone.

So the people that do buy new cars as their old ones are sold/scrapped slowly improve emissions. You know cars don’t last forever right?

And no, John Cadogan doesn’t explain anything well, he does the same shilling for ICE vehicles that he always does.

The Havana effect is coming. Do you know what that is? Just for you – people keeping their cars for longer, much longer, defeating the purpose of the NVES

FP, Havana effect — this is probably going to be true, at least for people who know how to work on cars. That won’t be most elites of course, who have minimal or non-existent practical skill sets. The trick will be to decide which ice vehicle is the best bet to keep going.

Doubtful over the longer term for a number of reasons, although there might be shorter term increases in vehicle age.

The costs to keep those older vehicles going will increase over time at the same time that EVs are becoming more price competitive. And it’s almost certain that governments will eventually begin to directly tax transport emissions, making those older ICE vehicles uneconomic.

Capital Retro7:48 pm 19 May 24

These ridiculous predictions a just another chapter in the “Renewables Reverie”.

Already there is massive overproduction of EVs nand the unsold ones are clogging storage facilities all over the world.

Yes, the 35% increase in global EV sales last year is definitely signs of trouble….

Unsurprisingly you mistake increased market competition for problems in the industry, when it’s actually the opposite.

Capital Retro5:03 pm 21 May 24

You are living and thinking in the past again.

One of is is living in the past but it ain’t me.

Global EV sales have grown year on year and will do the same in 2024, current sales for 2024 being about 25% above that for the same period in 2023.

Do you ever tire of being so hopelessly wrong about almost every topic?

Capital Retro2:42 pm 25 May 24

I am talking about overproduction of EVs, not sales. The manufacturers have over- estimated the take-up of the EV novelty.

Why do you think there is massive price discounting? It’s not because the good fairy has become a virtue signaler.

You are talking about increasing industry competition in a massively growing market, with new manufacturers entering the market regularly to take advantage of the increasing demand. Sounds fantastic.

Hilarious that you talk about price discounting as if it’s a bad thing. Particularly so when you’ve complained about EVs being too expensive in the past.

Lowering prices are evidence of a competitive and maturing market, exactly what you would want to see as the transition to EVs continues.

Oh good, they are cheaper. So many people were complaining about that.

Capital Retro11:12 am 26 May 24

You must have missed your first lecture about economics 1.01, supply and demand because when supply exceeds demand prices fall and buyers defer signing up because the price may be cheaper tomorrow.

Capital Retro11:15 am 26 May 24

Indeed they are, especially buyers who have just paid 20% more for the same vehicle which will probably be 20% cheaper again next month.

And the market for used EVs will disappear. Oh, those foolish leasing financiers.


Used EVs don’t keep their value due to battery degradation. They’re basically a throw-away consumable. Just how “sustainable” is that? Not to say in the future, that won’t be solved. But the current generation of EVs are more or less just a consumerist status symbol.

Capital Retro complaining about EVs becoming more affordable as if it’s a bad thing. LOL.

Also thinks that a 25% increase in Global EV sales this year is a bad sign for EVs somehow.

Economics 101? No, I think that’s a bit too advanced for you.

Capital Retro4:21 pm 26 May 24

Are you and chewy rostered off today, byline?

Capital Retro, you missed the bit about early adopters characteristically trading depreciation for earlier benefits. In fact you missed everything about variations in consumer valuation.

Used EVs will be cheaper as well? That is market expansion and social benefit, not vanishing. Many people here were moaning about lack of a second hand market as well. Good to have you put their minds at rest.

Felix the Cat6:39 pm 26 May 24

Lucky that ICE vehicles go forever and never need replacement motors or transmissions

CR the balloon payment on an EV lease is based on the original price of the car at the time, so if you were one of those poor schmucks that leased a Tesla Model 3 when they were nearly 70k, your balloon payment could be almost as much as a new Model 3. If you wish to sell it, you are up the creek. You will get next to nothing for it, and if you buy it outright, it’s comparible to paying iPhone 15 money for an iPhone 8

Those heavy EVs aren’t going to be doing roads any favours. My Ranger is a lightweight compared to many of them

Media Critic8:40 am 21 May 24

Sorry incorrect, my base model new Tesla model 3 weighs less than 1800kg, same as my wifes similarly sized diesel SUV.

Media Critic8:44 am 21 May 24

My wifes SUV is a similar size to my new Tesla Model 3 and both weigh about 1800kg so both are far lighter than your Ranger mate.🙂

The whole rush to EVs with massive government support has been dubbed reverse Robin Hood-ism, ie robbing from the poor to give to the rich! So the working bloke with his old petrol burning clunker who has no option but to drive a long distance to work pays the full amount of annual registration plus fuel excise every time he fills up. Those who can afford an expensive new EV are subsidised every bit of the way. This is clearly unsustainable. The Federal Government must move now to introduce an equitable nation wide kilometre based road user charge on EVs.

An alternative Robin Hood-ism: To make global mining companies build one kilometer of highway for every ton of dirt they dig out. 😉

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