Savvy modelling shows that the Australian Government is missing out on close to $360 million every year in fuel excise revenue due to the uptake of electric vehicles, and the figure is only rising. With the country’s EV fleet reaching 500,000 and counting, the decreasing market share of internal combustion engine (ICE) vehicles is causing the Government financial headaches. The average Australian passenger vehicle uses around 10.6L of fuel per 100km and travels roughly 12,600km a year.

That works out to about 1,336L of fuel annually, and at 53.7 cents per litre, roughly $717 in fuel excise per car, per year. When you consider the number of cars on the road that require no petrol or diesel whatsoever sits at approximately 500,000, that $717 per car turns into $359 million in lost government revenue. The number would be slightly higher again when PHEVs are taken into account, depending on the usage. As EV adoption accelerates and the number of ICE vehicles on the road falls, though, the burning hole in the Government’s pocket will only grow wider. If BEV sales maintain the pace they have had since March of this year, the fuel excise shortfall could grow to $554 million within 12 months. The surge in EV purchases isn’t without reason; electric cars are becoming more accessible and affordable, while fuel price hikes are putting plenty of Aussies in a world of hurt. A Savvy fuel survey from earlier this year found that 76% of respondents were experiencing some form of financial stress as a direct result of petrol and diesel prices going up, while 38% of prospective car buyers were considering switching to an EV.

The big issue for the Government to contend with here is that every EV purchased is a car that’s using the same roads, causing the same wear and congestion and paying nothing towards maintaining and expanding them. One of the proposed solutions is the introduction of a road-user charge, which would likely be paid on a per-kilometre basis, to combat the lost excise revenue. While there’s no word on what the specific charge may be, modelling based on 3 cents per kilometre and average annual driving and fuel economy suggests EV owners could end up paying around $350 to $400 a year. That’s still a fair way short of the more than $700 the average ICE driver hands over annually, but it would mark the end of the free ride EV owners have enjoyed on Australia’s roads.