Polestar Demands Universal Road-User Charge and Criticises Winding Back of EV Tax Exemptions

Polestar Australia has strongly criticized the Federal Government’s approach to automotive taxation, calling for a universal road-user charge to be levied against all drivers—including those in petrol and diesel vehicles—while condemning the planned reduction in Fringe Benefits Tax (FBT) exemptions for electric vehicles (EVs). The charge is being considered to offset the decline in fuel excise revenue as EV adoption increases.

Currently, the Federal Government levies a fuel excise of 53.7 cents per litre on all petrol and diesel sales, a figure that increases biannually in line with the Consumer Price Index (CPI). Maynard argues that if a road-user charge is introduced, it must apply equally to all motorists, rather than unfairly targeting early EV adopters.

"We see the inevitable introduction of a road-user charge, and we feel that it's critical that [the] charge be levied against all road users, and not just electric vehicle owners," Maynard said. "We don't have a congestion tax in Australia. We don't have any other form of pollution tax, as such, and so it would make sense that a road user charge be levelled fairly and evenly across all users."

Maynard proposed that under a universal per-kilometre road-user charge, the existing fuel excise could remain in place on combustion vehicles, functioning effectively as an emissions or "output tax" to maintain the financial advantage of zero-emission vehicles.

Federal and State Road-User Charge Developments

Federal Minister for Climate Change and Energy, Chris Bowen, confirmed in August 2026 that the government is actively developing a road-user charge, though he noted it is a "very big undertaking" that "should not be rushed unnecessarily."

Simultaneously, the New South Wales Government is progressing with its own state-based EV road-user charge, scheduled for introduction in July 2027. Under the NSW proposal, pure electric vehicles will be charged 3.095 cents per kilometre, while plug-in hybrids (PHEVs) will pay 2.476 cents per kilometre. This state-level push follows a 2023 High Court ruling that struck down a similar Victorian tax, determining that only the Federal Parliament possesses the constitutional authority to impose such excise duties.

FBT Exemption Wind-Down Criticized as "Half-Arsed"

In a separate critique, Polestar condemned the Federal Government’s incoming modifications to the EV Fringe Benefits Tax (FBT) exemption. Currently, eligible electric vehicles priced beneath the $91,387 Luxury Car Tax (LCT) threshold enjoy a full FBT exemption. (Plug-in hybrid vehicles lost this exemption on April 1, 2025).

Under the revised federal plan, the EV FBT exemption will be phased out:  

• From April 1, 2027: The threshold for full exemption will be lowered from $91,387 to $75,000. EVs priced between $75,000 and $91,387 will only be eligible for a 25 per cent tax exemption.
• From April 1, 2029: The 25 per cent exemption rate will also apply to EVs priced beneath $75,000.

Government data projects these changes will generate an additional $1.94 billion in tax revenue by the end of the 2030-31 financial year.

Maynard described the initial 2027 phase as "somewhat half-arsed" because it specifically targets vehicles in the narrow $75,000 to $91,387 price band, leaving lower-priced models untouched initially. He argued the government is simultaneously failing to address widespread FBT exemptions utilized by businesses for internal-combustion utility vehicles.

"[The Government is offering incentives] for luxury utes, and we're spending far more money incentivising people to buy those than we are incentivising people to buy [electric vehicles]. That doesn't make sense," Maynard stated. "So if the government wants to change its expenditure on the encouragement of automotive sales, then start scrutinising how much money you spend putting people into $100,000 dual cabs."

Once the FBT exemptions are fully wound down, the primary federal incentive remaining for EV buyers will be the elevated LCT threshold for "fuel-efficient vehicles," which currently provides a $10,852 buffer over non-efficient internal combustion models.