20-08-2023, 08:50 PM
The RNZ interview I linked to above indicates that there is a significant effort going on at present in the depths of parliament to redesign the entire RUC system. The only given is that EVs are scheduled to be drawn into the RUC net in April next year but recent comments are suggesting that even this date isn't set in stone yet according to a Newsroom article on the FET rise, and the level of RUCs that EVs will be charged is unknown though the present diesel rate of ~7.6c/km has been loosely suggested.
Most EV owners are well aware that they will be paying RUCs at some stage but the cost of running an EV is very low and an extra few cents per km is no big deal. In my own case our EVs cost about 2c/km charged from our PV (based on lost export opportunity to the grid), 4c/km if charged off peak and about 6c/km if peak rates apply (which is virtually never for us). Public charging on the Chargenet DC fast chargers is more expensive at ~16c/km so for those with no home charging, or those with frequent long journeys, if the existing diesel RUC rate was applied to EVs it would bring the total running (charging + RUCs) up to the equivalent of fueling an equivalent petrol car.
The complication in adding RUCs to EVs is how the question of Plug in Hybrid EVs (PHEVs) and hybrids generally are treated. The PHEVs in particular are able to operate on battery power only for short trips so have the ability to operate as an EV so RUCs will have to apply to them too (with their petrol FET refunded?). A problem is also identified in the Newsroom article in that increasingly fuel efficient vehicles in general are impacting the income stream from RUCs to less than their intended taxation level.
The existing RUC system is becoming increasingly not fit for purpose and it appears that the government is working on a major dejig of it in conunction with its EV inclusion. The logical way to balance the whole RUC system would be for all road vehicles to be charged on a distance system as diesel vehicles currently are. This would present logistical challenges in monitoring and paying for so many vehicles would probably overwhelm the existing set up. FET on petrol would need to be removed to compensate for the RUC content it currently includes. It would however make for a far fairer collection system as petrol used by boats, power tools and off road vehicles currently pay RUCs which goes against the intent of RUCs.
RUCs are as they suggest meant to pay for road construction and maintenance so a distance based charging system adjusted for weight is the best way of addressing this. Heavy Goods Vehicles in particular pay much higher RUCs based on their impact on roading and this may well need revision considering the worsening state of the state highways that they use. A purely distance based system also gets around the PHEV and hybrid conundrum.
The other current issue with RUCs on light diesel vehicles is the amount of evasion occurring by way of odometer tampering and downright ignorance of payment. A remotely monitored system similar to the existing ERoad one for commercial vehicles would work but would meet resistance (big brother?) and have a significant implementation cost.
So far as disincentivising fossil fuel use this would most easily be done by way of a variable carbon tax on petrol, diesel, etc. RUCs are a contribution towards roading costs so differentiating them to favour various fuel types runs against their primary intent. The government's recent move to raise FET in order to address roading expenditure shortfall seems like a very curious move in light of a shiny new RUC system being just over the horizon which would be better suited to balance their roading budget.
When all said and done the government have a complex puzzle to sort out with RUCs and to further complicate matters an election looming in the meantime. At some stage in the next 6 months or so we will learn how they're going to move on this but in the meantime they are very much keeping things under wraps by all accounts. Time will tell...
Most EV owners are well aware that they will be paying RUCs at some stage but the cost of running an EV is very low and an extra few cents per km is no big deal. In my own case our EVs cost about 2c/km charged from our PV (based on lost export opportunity to the grid), 4c/km if charged off peak and about 6c/km if peak rates apply (which is virtually never for us). Public charging on the Chargenet DC fast chargers is more expensive at ~16c/km so for those with no home charging, or those with frequent long journeys, if the existing diesel RUC rate was applied to EVs it would bring the total running (charging + RUCs) up to the equivalent of fueling an equivalent petrol car.
The complication in adding RUCs to EVs is how the question of Plug in Hybrid EVs (PHEVs) and hybrids generally are treated. The PHEVs in particular are able to operate on battery power only for short trips so have the ability to operate as an EV so RUCs will have to apply to them too (with their petrol FET refunded?). A problem is also identified in the Newsroom article in that increasingly fuel efficient vehicles in general are impacting the income stream from RUCs to less than their intended taxation level.
The existing RUC system is becoming increasingly not fit for purpose and it appears that the government is working on a major dejig of it in conunction with its EV inclusion. The logical way to balance the whole RUC system would be for all road vehicles to be charged on a distance system as diesel vehicles currently are. This would present logistical challenges in monitoring and paying for so many vehicles would probably overwhelm the existing set up. FET on petrol would need to be removed to compensate for the RUC content it currently includes. It would however make for a far fairer collection system as petrol used by boats, power tools and off road vehicles currently pay RUCs which goes against the intent of RUCs.
RUCs are as they suggest meant to pay for road construction and maintenance so a distance based charging system adjusted for weight is the best way of addressing this. Heavy Goods Vehicles in particular pay much higher RUCs based on their impact on roading and this may well need revision considering the worsening state of the state highways that they use. A purely distance based system also gets around the PHEV and hybrid conundrum.
The other current issue with RUCs on light diesel vehicles is the amount of evasion occurring by way of odometer tampering and downright ignorance of payment. A remotely monitored system similar to the existing ERoad one for commercial vehicles would work but would meet resistance (big brother?) and have a significant implementation cost.
So far as disincentivising fossil fuel use this would most easily be done by way of a variable carbon tax on petrol, diesel, etc. RUCs are a contribution towards roading costs so differentiating them to favour various fuel types runs against their primary intent. The government's recent move to raise FET in order to address roading expenditure shortfall seems like a very curious move in light of a shiny new RUC system being just over the horizon which would be better suited to balance their roading budget.
When all said and done the government have a complex puzzle to sort out with RUCs and to further complicate matters an election looming in the meantime. At some stage in the next 6 months or so we will learn how they're going to move on this but in the meantime they are very much keeping things under wraps by all accounts. Time will tell...