Tesla has told a federal parliamentary inquiry that if Australia brings in a national per-kilometre road user charge, it should apply to every new light vehicle, petrol and diesel included, and that fuel excise should stay on top for combustion cars. The proposal is in Submission 258 to the Senate Select Committee on Productivity in Australia, dated 16 October 2026.
It is the opposite of what most motorists expect a road user charge to look like. Debate in Australia has largely focused on making EV owners pay something to replace the fuel excise they no longer contribute. Tesla argues that an EV-only charge penalises the cars governments want people to buy, and that a fair system would charge everyone for distance while keeping excise as a price on pollution.
What Tesla is proposing
The road charge is recommendation six of eight in the submission. The others cover public charger connections, freight charging, heavy electric trucks, emissions standards and autonomous vehicle trials. On road funding, Tesla sets out these principles.
| Design point | Tesla's position |
|---|---|
| Who pays | All light vehicles, whether petrol, diesel, hybrid, plug-in hybrid or electric |
| Fuel excise | Kept on petrol and diesel as a levy on pollution and other unpriced costs, not absorbed into the road charge |
| Transition | Applies to all new light-vehicle registrations from a set future date, and to every EV new or existing. The existing petrol and diesel fleet, more than 15 million vehicles, is exempt |
| Starting rate | A nominal fraction of a cent per kilometre, phased up over several years |
| Rate basis | Real road maintenance costs, split by vehicle mass and distance |
| Offsets | Any later increase should come with cuts to stamp duty and upfront rego |
| Collection | Commonwealth collects, GST-style, and passes revenue to states, territories and councils |
| Regional protection | Annual price or kilometre caps for outer-metro and rural cars, regional multipliers and rate caps for rideshare |
| If EV-only instead | No more than 1.5 cents per kilometre |
Tesla points to Norway, where a universal road toll system sits alongside fuel taxes, as the international precedent.
Why it has to be federal
Victoria introduced a per-kilometre charge on EVs and plug-in hybrids in 2021, set at 2.5 cents for electric cars. In 2023 the High Court ruled in Vanderstock v Victoria that it was an excise, which only the Commonwealth can impose, and the charge was struck down. NSW had also legislated a future EV charge, but the ruling leaves any state scheme on shaky ground. Tesla's submission says any lasting road user charge must therefore be a Commonwealth instrument.
A federal decision is still some way off. Climate Change and Energy Minister Chris Bowen said in August that a road user charge would come "when the time is right", and the federal government has not published a model, a rate or a start date.
What it could cost drivers
Tesla does not propose a rate for a universal charge beyond starting at a fraction of a cent. To show what different rates mean, we used the 11,025 kilometre annual distance from Tesla's own example.
| Charge per km | Cost a year at 11,025 km |
|---|---|
| 0.5 cents | About $55 |
| 1.0 cent | About $110 |
| 1.5 cents (Tesla's ceiling for an EV-only charge) | About $165 |
| 2.97 cents (state-level EV rate cited by Tesla) | About $327 |
For comparison, fuel excise has been 53.7 cents a litre since 3 August 2026, according to the ATO excise rate table. A new petrol car using 7.0 L/100km over the same distance burns about 772 litres, which is about $414 in excise, or roughly $456 once GST charged on that excise is included. Under Tesla's model, the owner of that car bought after the start date would pay the road charge on top. An owner of an existing petrol car would not.
Tesla's case against a high EV-only rate rests on this example. It says a hybrid using 3.3 L/100km pays about $249 a year in fuel excise and GST. To match it, an EV would need a charge of no more than 1.62 cents per kilometre. At 2.97 cents, Tesla calculates the EV owner pays about $149 a year more than the hybrid owner, a 60 per cent penalty.
Running costs are only part of the picture. Our guides to car rego costs by state and stamp duty on new cars show the fixed charges Tesla suggests could fall if per-kilometre charges rise, and our EV rebates and incentives guide tracks what states still offer.
Who would gain and who would lose
- EV owners. They would pay a road charge either way, but a universal scheme starting at a fraction of a cent would cost far less than the rates states have tried.
- Buyers of new petrol and diesel cars. They would pay both excise and a distance charge, which is the point. Tesla wants to keep the running cost gap that favours EVs.
- Owners of existing combustion cars. Exempt under Tesla's transition plan, which avoids odometer checks on older cars without connected telematics.
- Regional drivers. Would face higher bills because they drive further, which is why Tesla wants caps and multipliers.
Critics will note that Tesla sells only electric cars and stands to gain from a gap between EV and petrol running costs. The submission itself acknowledges that adding a charge to excise risks cost-of-living pushback, which is why it exempts the existing fleet.
What it means if you are buying now
Nothing changes yet. No national charge has been designed, and any scheme would need legislation and likely years of phasing. For now the running cost case for an EV still depends mostly on how and where you charge. Our petrol vs hybrid vs electric running cost guide and public EV charging costs explainer break that down.
Tesla says it has delivered more than 151,000 cars in Australia since 2023. The Tesla Model Y is listed from $58,900 before on-road costs, and recent stock deals are covered in our story on Model 3 and Model Y discounts.
Policy details are from Tesla's Submission 258, read in full on 3 November 2026. Excise rates are from the ATO.