Australia is contemplating wholesale road user charging reform to incorporate electric vehicles in response to the reduction in fuel excise revenue and automobile infrastructure's financially sustainable development.

The Australian government is on course to overhaul the road user charging regulations, with Prime Minister Anthony Albanese saying that he is to discuss this issue next week at the productivity roundtable in Canberra.

The move occurs as the Australian Automobile Association announced that EVs amounted to almost one in ten of the new car sales in the June quarter, a record high. Fuel excise income, which is conventionally gathered based on petrol cost, has been coming under stress because the consumers have been switching to battery-driven cars.

An earlier attempt (in 2023) by states, one led by Victoria, to tax EVs was stalled by a High Court decision that pronounced the tax on EVs unconstitutional. Federal and state treasurers have since been trying new models that can enable them to sustain infrastructure funding.

The Treasurer, Jim Chalmers, has not made the final decision yet, but he admits that changes are coming because currently, petrol vehicles are about to leave the market. Industry leaders, including Polestar Australia's Scott Maynard, have urged the industry to take a broader look at the transport ecosystem, which includes admonishment of any new charges without considering the current fees on motorists.

Road user charges have support within the Productivity Commission, who advocate that they would stimulate more efficient use of the road system and strengthen signals on how infrastructure should be invested.

By implementing it, the reform can become a major change in the Australian automobile policy to balance the rise of the EV market and sustainable road financing.