Upcoming Law For Electric Vehicles In NSW

Key Member Takeaways

  • Refund and rebate for eligible owners of electric vehicles.

  • Road user charge to be imposed on eligible owners of electric vehicles.

  • Members should plan for transition of road users to zero or low emissions electric vehicle (“EV”) in NSW.

MTA NSW brings into the spotlight for Members the recent passing of NSW Government law for EV.
As Members may be aware, the NSW EV Strategy is a plan to accelerate the State’s vehicle fleet for the future and ensure at least 50% of new vehicles sales are EV by 2030.
In this communication we look to outline the NSW Government commitments to increasing the uptake of EV to ensure NSW shares in the future benefits.
1       NSW Government EV Strategy
1.1    Under the EV Strategy, the NSW Government is investing almost half a billion dollars in tax cuts and incentives to drive uptake and reduce barriers for EV purchases over the next four (4) years.
1.2    Under the EV Strategy, the NSW Government is:
(a)     Making it easier to afford an EV by providing incentives and phasing out stamp duty on eligible EV.
(b)     Transitioning the NSW Government passenger fleet to EV by 2030.
(c)     Proposing to build world class road network of ultra-fast charging stations across NSW.
(d)     Introducing a distance-based road user charge for eligible EV.

2       New EV Law
2.1    To implement the EV Strategy, the NSW Parliament has recently passed the Electric Vehicles (Revenue Arrangements) Act 2021 (“EV Law”).
2.2    Summary of the new EV Law:
(a)     The EV Law will commence on the same date it is signed into law by the NSW Governor.
(b)     The EV Law applies to the following EVs in NSW:

  • a battery electric vehicle (“Battery Vehicle”),

  • a hydrogen fuel cell electric vehicle (“Hydrogen Vehicle”), and

  • a plug-in hybrid electric vehicle (“Hybrid Vehicle”).

(c)     The EV Law does not apply to:

  • a motor vehicle that is not required to be registered in New South Wales,

  • a heavy vehicle (i.e. motor vehicle or trailer over 4.5 tonnes GVM), and

  • a motor vehicle exempted by the EV Law from being applicable under the EV Law.

(d)     In essence, the EV law consists of:

  • Imposing a road user charge on EV owners (see paragraph 2.3 below for details); and

  • Providing refund and rebate to EV owners (see paragraph 2.4 below for details)

2.3    Road user charge on EV owners under the EV Law
(a)     Similar to the EV schemes in Victoria and South Australia, owners of EV are to pay a Road User Charge on a per kilometre basis driven on a road or any non-private place in Australia. The Road User Charge will commence on the Relevant Date (i.e. the earlier of either 1 July 2027 or when the sales of Battery Vehicles in NSW make up at least 30% of new car sales in NSW) subject to the followings:

  • Owners of Battery Vehicles or Hydrogen Vehicles will have to pay 100% of the rate per kilometre for the relevant financial year; and

  • Owners of Hybrid Vehicles will have to pay 80% of the rate per kilometre for the relevant financial year.

(b)     For the purpose of sub-paragraph (a) above, the rate per kilometre for the relevant financial year is calculated as follows:

  • From the Relevant Date but within the 2021-2022 financial year, the rate per kilometre is fixed at 2.5 cents, and

  • After the 2021-2022 financial year, the rate per kilometre for each and subsequent financial year will be based on the Consumer Price Index (“CPI”).

(e)     The above Road User Charge is also applicable to owners of Battery Vehicle and Hydrogen Vehicle registered before the Relevant Date and were exempted from paying stamp duty pursuant to paragraph 2.4(a) below.
(f)      The Road User Charge can be paid in the following options:

  • Pre-paid option – advance payment for each 1,000 kilometres and owners of EV must ensure the vehicle does not travel several kilometres that is more than the number of kilometres for which the road user charge for the EV has been paid, unless the EV owner has a reasonable excuse.

  • Post-paid option –before travelling the number of kilometres for which the charges are payable, an EV owner must notified Transport for NSW that the EV owner has elected to use the post-paid option to pay the charges.

(g)     After the Relevant Date, owners who are registering or renewing the registration of their EV must give:

  • the odometer reading in the way approved by Transport for NSW; or

  • an estimate of the number of kilometres travelled by the EV during the period to be calculated in a way Transport for New South Wales considers reasonable in the circumstances.

2.4    Refund and rebate to EV owners under the EV Law
(a)     Purchasers of the following types of vehicles are allowed to (retrospectively after 1 September 2021 but before the Relevant Date) apply for both:

  • a refund of full stamp duty on eligible Battery Vehicles and Hydrogen Vehicles priced up to $78,000;

  • a rebate of $3,000 for the first 25,000 purchasers of eligible Battery Vehicles and Hydrogen Vehicles under $68,750.

(b)     Purchasers of all EV (including Hybrid Vehicles) registered from the Relevant Date onwards, can apply for a refund of full stamp duty regardless the price of the EV.
(c)     Application for refund and rebate will open on 1 November 2021.
2.5    The maximum penalty for offences under the EV Law is:

  • $2,200 for an individual (including sole trader and partnership)

  • $11,000 for a body corporate (for e.g. a corporation or an entity that is not a corporation but registered under the Corporations Act 2001).

3       Additional incentives not announced by the EV Law
3.1    From 1 November 2021, eligible EV will be able to use Transit T2 and T3 lanes until at least 31 October 2022, making travelling in an EV even easier.
3.2    The NSW Government has committed $171 million to help co-fund with private operators the installation of EV charging infrastructure across the whole State:
(a)     at every 5km along Sydney’s major commuter corridors,
(b)     on average every 100km along major highways in NSW,
(c)     within 5km of residential areas with limited off-street parking, and
(d)     in or near commuter car parks and other Transport for NSW owned land.
3.3    The NSW Government announced that the Road User Charge is shaped in a way to ensure that drivers of EVs should not pay on average more under the Road User Charge than they currently pay through stamp duty and fuel excise.

If a Member has any question or query then please contact the MTA NSW Employment Relations at P: (02) 90169000 or at E: [email protected]

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