It’s a good feeling when your business goes national. Once you start crossing borders, however, the amount of administration increases because of the different regulations and taxes imposed by different state governments.
The two current cross-border challenges for organisations that manage fleets in different states are vehicle registrations and licences. Over the next decade, as fleets increasingly transition to electric vehicles, road user charges could replace fuel excise, which will create an opportunity for national fleet operators to make use of new technologies.
Fuel excise vs. road user charge (RUC)
Australians with petrol and diesel vehicles currently pay a fuel excise to the Federal Government of 47.7 cents per litre when they purchase fuel at a service station. This generates a significant amount of money each year and a portion of it is used to build and maintain roads around the country.
Heavy vehicles may cause more damage to the roads, but they also use more fuel. So, with a fuel excise, larger vehicles pay more towards road construction and maintenance.
An RUC will be a fee per kilometre travelled and will vary depending on the size and weight of the vehicle. Vehicles that travel high kilometres will be paying more to use the roads more, and heavy vehicles will be charged a higher rate per kilometre.
When will it change?
The RUC is meant to replace the revenue collected by the fuel excise and reflect the cost of building and maintaining roads across the state. The state governments have different views on when to start the RUC for electric vehicles, and how much it should be.
Most states acknowledge that the transition to electric vehicles will take time and are supporting fleets to adopt EVs by delaying the RUC until a large percentage of new vehicle sales are electric (2027 is the date indicated by NSW).
For national fleets, if the implementation timing of a new RUC varies in each state, it might create some administration challenges at first, but managing the change one state at a time may be a good way to ease the burden.
How will this impact businesses with cars?
There are no plans to introduce an RUC for petrol or diesel passenger vehicles or light commercial vehicles (the charges for vehicles over 4.5 tonne are calculated differently). It will only apply to electric vehicles (EVs) or plug-in electric vehicles (PHEVs), which have significantly lower running costs, so the impact to your business should be minimal.
There are differences in the calculations and payments when comparing the RUC and fuel excise. For example, the fuel excise is captured in the pump price. It’s a system that has operated for many years where the fuel companies collect it on behalf of the Federal Government.
An RUC will be paid by the fleet operator and the method of calculation and collection could vary by state. This is where technology will bridge the gap and provide a solution for fleet managers to avoid any additional administration.
Victoria has already adopted an RUC so businesses that have added electric vehicles to their fleet are getting an introduction to the new processes. This means that when it becomes common in the other states, they will be ready for the change.
We’ll keep our finger on the pulse of the electric vehicle world and keep you updated on any changes and developments. If you’d like to browse articles, info, reviews and more on electric vehicles, check out our new electric vehicle hub.
