Electric cars to overtake levies
DON’T underestimate the emergence of electric cars. Researchers say that if the government doesn’t look at an alternative to the fuel levy, its fourth biggest source of income will dry up.
Professor Stephan Krygsman, an expert in transport economics in the Department of Logistics at Stellenbosch University, is currently researching the ways that road users are being taxed and if it is sustainable.
Fuel tax on each litre was an important revenue stream for the government, he said.
“Even though there’s an increase in the number of vehicles on the country’s roads, the fuel levy, which contributes 5% to the national tax revenue, could be gone in 10 years, with the increase in vehicles’ fuel efficiency and electric and hybrid vehicles emerging.
“The fuel levy is supposed to reflect the cost you impose on society – maintaining your roads, admin costs, congestion cost, environmental costs, accident costs. The problem is that we’re not good at capturing environmental and congestion costs.”
Electric vehicles could hasten the demise of the fuel levy, as they used less or no fuel, resulting in less fuel consumption per kilometre, which meant the fuel levy would decrease, said Krygsman.
“It’s being estimated that by 2040, electric cars can make up 30% to 40% of the world’s 2 billion cars,” he said.
Some countries would ban diesel cars from city centres as early as 2025, according to Krygsman, and most were already looking at alternatives to the fuel levy, such as a kilometre-based system.
“What this means is that road users are charged for the distance they travel. They pay per kilometre and get an invoice at the end of the month.”
“Through an on-board GPS it will be possible to track different vehicle types to charge for actual road use. The charge will be based on distance travelled, the vehicle type (eg large or small), the weight of the vehicle, time of day and where the travelling takes place (eg cities or rural areas). This data will then be transmitted through a cellular network and used to calculate what each road user would pay.”
“If we set the right price, this system can deliver sufficient income for the government.”
There are still several issues that have to be solved before such a system can be implemented, including but not limited to privacy and ethical considerations, user needs, technical system requirements and the role of the government, Krygsman said.
“While in South Africa there are fewer than 1 000 electric cars, because they are expensive, by 2024/25 it will get cheaper. We are not technology leaders but we tend to follow.”
Several GPS devices have been installed in cars to test the model. Individuals using these test cars will receive invoices every month, and researchers will see if it alters their behaviour.
“We will also try to motivate them by providing two or three alternatives to reduce their costs,” Krygsman said.