Tesla and power giants revolt against Australia’s ‘EV charger tax’

Tesla and some of the largest Australian power companies have united to fight a controversial plan to pass the cost of building public EV chargers onto all households through electricity bill increases, even if or those who do not own an EV.

In a joint letter to local authorities, the electric car giant and more than a dozen industry players – including AGL, EnergyAustralia, Engie and private charge-point operators like Evie Networks – are warning that a recent decision allowing monopoly power-grid owners to expand into the EV-charging market risks saddling households with higher costs for uncertain benefits.

The clash comes as booming sales of EVs, which now account for one in four new vehicles sold across the country, are piling pressure on governments and the industry to urgently scale up public charging infrastructure to keep pace with demand.

To accelerate the rollout of kerbside chargers, Australian power distributors – owners of the grid’s poles-and-wires infrastructure – have secured preliminary approval from the Australian Energy Market Commission (AEMC) to mount 14,000 EV chargers on existing power poles in regional blackspots and other areas underserved by private companies. Under the trial, they will be allowed to recover 70 per cent of the costs through regulated charges paid by all electricity consumers on their power bills, with the federal government footing the remainder.

The AEMC estimates the initiative will add $1 a year to people’s bills over a five-year period – an increase it argues is outweighed by the broader economic and environmental benefits.

“Having weighed all factors, the commission is satisfied the program’s likely benefits outweigh its costs to consumers, given its targeted and time-limited design,” AEMC chair Anna Collyer.

“Lessons learned from the trial program will inform future commission decisions regarding EV infrastructure.”

However, energy retailers and private charging networks are demanding greater scrutiny of the program’s assumed costs and wider benefits.

In the joint letter to the AEMC, they expressed concerns that the true bill for consumers could escalate beyond the estimated $1 annual charge and impose unfair burden on households already struggling with rising living costs, and said the commission’s own analysis had been unable to confirm whether each network-owned charger would lead to 1.5 to 3.8 new EV purchases – the number needed to justify the cost.

Their submission also argued that allowing government-regulated grid monopolies into the market will distort competition by undermining the private operators risking their own capital to build competing networks.

Stephanie Bashir, founder of consultancy Nexa Advisory, which organised the letter, said the signatories supported the rollout of more EV charging. But the need for more chargers did not “establish a case for electricity networks to own them or for every electricity customer to help pay for them”, she said.

“This is potentially like an EV tax on electricity bills,” Bashir said.

“People who cannot afford an EV, do not own a car or will never use these chargers would still contribute through their electricity bills – the AEMC must explain why that is justified.”

Tesla, one of the world’s biggest EV makers, said a network operator’s job was to build, run and maintain the shared grid, “not to own, control, or rollout the batteries, chargers and other equipment sitting in people’s homes and driveways”.

“Networks should set the table, so competitive markets can do their work – they should not pull up a chair and play, while also owning the table, writing the rules for who gets a seat, and acting as umpire,” it said.

AGL, the second-largest Australian power retailer, echoed those concerns, stressing that it was important for the rollout to deliver the best outcomes for customers at the lowest possible cost, and that the case for network ownership had “not yet been established”.

“The AEMC’s proposal would require all electricity consumers to fund charging infrastructure through their electricity bills, even those who may never use the service,” the spokesperson said.

“Allowing monopoly network businesses to lead the rollout risks higher costs and weaker service outcomes.

Australia’s network companies such as Ausgrid, CitiPower, Powercor, and Essential Energy, said in a submission earlier this year that waiving “ring-fencing” rules and allowing them to enter the competitive public-charging market would help ensure greater access for those unable to charge EVs at home because they lived in apartments or did not have off-street parking.

“We do not have enough accessible, affordable public charging,” said Energy Networks Australia, an industry group. “By enabling distribution networks to install, own and maintain kerbside electric vehicle charging using existing infrastructure, such as power poles, we can deliver faster, more affordable, and more widespread access to charging where people need it.”

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