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Uncovering the hidden costs and benefits from electric vehicles

Final report for the Electric Vehicle Council
Excise tax Tax reform Cost-benefit analysis Electric vehicles Carbon emissions Emissions reduction Australia

Electric vehicles (EVs) offer a range of environmental benefits, including the potential for reduced greenhouse gas (GHG) emissions, airborne particulates and other pollution from road transport, and would support Australia in achieving its international emissions targets. Despite this, support and demand for passenger EVs in the Australian market has historically lagged behind the rate of increase experienced in similar international markets. Outside of Australia, different policy incentives have made EVs a more attractive option to drivers and policy-makers, accelerating their uptake.

The Electric Vehicle Council (EVC) engaged EY to assess the costs and benefits associated with EVs displacing internal combustion engine vehicles (ICEVs) in Australia, separating these impacts into costs and benefits to government, and to society. Media reports have suggested that some state governments have considered implementing a tax on EV drivers out of concerns that EVs would reduce government revenue (through lower fuel excise revenue). However, EVs have broader economic, societal and environmental costs and benefits, and these need to be recognised and quantified as part of any discussion on the overall cost and benefits of EVs in Australia.

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