The sale of Electric Vehicles (EVs) should be booming across Australia. They are quiet, cheaper to maintain than their gas-guzzling cousins and don’t burn or emit CO2. They are the key to reducing greenhouse gas emissions in our transport sector. Adversely, the internal combustion engine-powered vehicles on our roads are the third biggest emitter of carbon dioxide, and cars are responsible for half of those emissions.
Going electric then, makes good sense for the environment by decarbonising transport, and reducing Scope 1 (fuel) emissions and noise, not to mention, each sale fills government coffers. But, sales of EVs in Australia sadly, lag behind the rest of the world and when you consider that over one million cars were sold in Australia in 2018, but only 1350 were electric, you’ve got to ask:
What’s stopping Australians from embracing the chargeable drive?
Several factors are slowing down the sale of EVs in Australia. The cost of one is a huge barrier to purchase. Electric cars are not cheap, with the initial up-front outlay ranging in price from around $49,000 to more than $100,000. Mid to low-level income earners simply can’t afford this and are purchasing ‘cheap and cheerful’ petrol-fuelled cars in line with their budget.
The main contributor to the hefty price tag of EVs is the cost of the battery. For the car to store enough power to go long distances with adequate charge to use headlights and windscreen wipers, the battery has to be energy-dense, light and compact. EVs use lithium-ion batteries, like those in our mobiles and laptops, only bigger. They are costly to manufacture but over time and with technological advances, costs are expected to reduce, flowing through to a less expensive EV.
Going the distance
A lack of national charging infrastructure is a very real obstacle to the uptake of EVs in Australia. The fear of running out of power before arriving at your destination is fuelling drivers’ resistance to purchasing an electronic car. Given that Australia is a car-dependent nation with vast distances between cities, this is a legitimate concern that needs to be overcome with investment in charging stations across the country.
Lack of incentive
Australian drivers lack government incentives to switch to electric vehicles. Electronic cars are subject to the Luxury Car Tax but the threshold is applied at a higher level. The ACT doesn’t charge stamp duty on your purchase and Victoria gives you a $100 registration discount. And then there’s the NSW government’s announcement to introduce another tax on electric vehicles, joining the only other state to do so, South Australia.
The Electric Vehicle Council says any new tax is a major deterrent for the industry. Chief Executive Behyad Jafari said, ‘Every electric car sold today is a net win for government coffers and a net win for the economy more broadly. Why would any government try to discourage that?’
Instead, Australia could adopt the UK’s approach to EVs abolish road tax and charge dirty, higher-emitting cars more.
Norway provides a stellar example of how to encourage electric car ownership. It offers buyers an exemption from import and purchase tax, VAT and road tax and provides a free pass for road tolls, bus lanes and municipal parking.
Of course, all in moderation. While these are great ideas, Australia needs its own, purpose-built EV Policy that is linked with federal government targets for reducing greenhouse gas emissions. The policy would encourage the uptake of EVs through government subsidies which in turn, would reduce the cost of EVs and offer financial benefits for buyers. The move would highlight the government’s commitment to reducing CO2 emissions in the transport sector and emphasise the benefits of clean air and less noise on our roads.
COVID & the Global Recession
The event of COVID-19 and the ensuing global recession have seen EV sales, not surprisingly, slow down. Massive unemployment, and increased anxiety over money, mortgages and the future have all contributed to a rethink of the way we work, live, socialise and move about our cities. People have adopted new ways of getting around - electric bikes and scooters, the re-emergence of ‘feet’ and public transport have all impacted EV sales.
Is there any good news?
There’s always good news. EV manufacturer Nexport is planning to build a $700 million manufacturing plant in the NSW Southern Highlands, to deliver electric buses and vehicles. The move follows the planned decarbonisation of bus fleets in the ACT, while NSW plans to replace its 8000 diesel buses with electric.
The federal government has awarded $5 million to ACE EV, an Aussie EV start-up in Adelaide. Founder Greg McGarvie says it’s a sign the tide is turning on EV acceptance, "That $5 million is a pivot and shows there is a change in sentiment here in Australia".
Let’s hope he’s right
If there is a change in the level of support for the widespread use of electronic vehicles across Australia, then we should expect to see the federal and state governments taking steps to support the expansion of the EV industry.
This means investment in local manufacturers and technology, national charging infrastructure, boosting the uptake of EV sales across the transport sector (public transport, freight and Aussie motorists) through financial incentives and improved access to cheaper EVs.
These measures would reduce the barrier to driving electric but should not be implemented in isolation, but as part of a national framework to reduce greenhouse gas emissions, effectively rewarding drivers for participating in the reduction of transport-related emissions. So we need more than a change in sentiment. We need action!