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Electric vehicles are racing ahead overseas, so why isn’t that happening in Australia?

Australia’s position as a laggard in the global electric car race is unlikely to change despite the election of a Labor government more friendly towards clean transport, according to industry experts.

Key points:

  • Experts say the lack of fuel efficiency standards is the biggest roadblock to electric vehicle uptake in Australia
  • Apart from Russia, Australia is alone among developed economies in not having minimum fuel efficiency standards
  • Federal Labor has promised to cut fringe benefit and import taxes while spending more money on charging stations

The election of Anthony Albanese’s government last month has raised expectations that uptake of electric vehicles (EVs) in Australia would accelerate as a result of more generous subsidies and fewer disincentives.

Labor has pledged to cut fringe benefit and import taxes for EVs, while promising to double the amount of money spent on charging infrastructure to $500 million.

It has also vowed to end the culture wars on EVs, which the former coalition government claimed would “end the weekend”, as part of an ambition to increase the technology’s share of new car sales to almost 90 per cent within a decade.

Will Edmonds from Bloomberg New Energy Finance, an analysis firm, said Labor’s rise to power would likely spur demand from motorists keen to buy an electric model.

But Mr Edmonds said extra demand would not necessarily do much to boost supply.

He said there was already plenty of demand for EVs in Australia, but automakers were shunning it as a market because of the country’s lack of fuel efficiency standards.

Sales of electric vehicles in Australia are accelerating, but from a low base.(ABC News: Daniel Mercer)

Supply, not demand, the problem

Such standards, which are in place across most of the developed world, require car makers to ensure the models they sell over a year – on average – meet minimum quality and efficiency benchmarks.

To meet them, Mr Edmonds said, automakers typically tried to sell low or zero-emitting models such as EVs to offset the sale of any polluting lines.

He said if car makers failed to meet the targets, they faced potentially steep fines.

“Automakers do face their supply constraints but they are able to prioritize their EVs for other markets,” Mr Edmonds said.

“The reason why Australia is not a priority market for these automakers is because Australia does not have a fuel economy standard in place.

“Other markets — like the EU, China and the US — have fuel emissions standards which automakers need to hit.

A black Tesla Model 3 sedan is shown with large five-spoke alloy wheels and shrubbery in the distance.Tesla’s Model 3 is the company’s bid to bring plug-in electric vehicles to the masses.(Flickr: Marcus Zacher)

“This means that for every big polluting vehicle they sell, they need to sell a smaller, more efficient, ideally electric vehicle to balance this out and hit that emission target.

“Since Australia has no fuel emissions standard, automakers are free to ship all their most polluting vehicles here.

“It also means they have little incentive to send their scarce supply of electric vehicles here.”

Automakers call for better fuel

Adding to the calls for a tougher set of fuel efficiency standards in Australia is the car lobby.

Federal Chamber of Automotive Industries chief executive Tony Weber said consumers as well as the environment were being left worse off by Australia’s lack of quality controls.

Mr Weber said part of the solution involved upgrading the nation’s remaining two fuel refineries to ensure they could produce better quality stocks.

But he warned that Australia would remain a global laggard unless it overhauled its fuel standards.

A mix of cars and trucks fill four lanes of peak hour traffic on freeway.The auto industry wants better fuel standards for the 20 million cars already on Australia’s roads.(ABC News: Andrew O’Connor)

“Australia has the lowest quality petrol in the OECD,” Mr Weber said.

“We currently are one of only two advanced nations in the world without a CO2 standard — the other nation being Russia. So, we’re not in a particularly good company there.”

In the run-up to the 2019 federal election, Labor vowed to introduce a fuel efficiency standard along with a target for 50 per cent of all new cars sold in Australia to be electric by 2030.

However, the party junked those policies in the wake the 2019 election defeat, taking a pared-back set of policies to this year’s May poll.

Mr Weber said the car industry did not support a mandatory EV sales target.

Australia could fall ‘further behind’

Rather, Mr Weber reasoned, fuel efficiency standards would be a better way of achieving the same outcome by allowing automakers to choose the models they supplied while improving the performance of and emissions from the 20 million cars already on Australian roads.

“There are numerous technologies out there in the marketplace that will give you low-emission outcomes,” he said.

“What the government should do is not mandate that we should have electric vehicles or a percentage of hydrogen fuel cells, or any other type of technology.

Close up of Anthony Albanian speaking.Prime Minister Anthony Albanese took a slimmed-down transport policy to May’s election.(ABC News: Luke Stephenson)

“What we should do is develop a target and say to the brands, ‘You need to meet that target and you need to meet that with any technology mix’.

“What I say to the government is, ‘You give us the CO2 target, we will give you the technology to meet that target’.”

Mr Edmonds said the absence of fuel standards would act as a handbrake on Australia’s transition to cleaner transport that would only get worse the longer it lasted.

“We’re already feeling the effects of not having a fuel emissions standard now,” he said.

“Wait times for the Tesla model 3, which is Australia’s most popular electric vehicle … in 2022 have blown out to 12 months.

“And then when it comes to other automakers, they’re beginning to cancel existing models here.

“So, Europe, China, the US … their fuel emission standards ratchet up over time, meaning there’s increasing pressure on automakers to send vehicles there.

“If Australia doesn’t have that fuel emissions standard, it risks falling even more behind.”

‘The technology is here’

James and Nina Hope say anything that would help to encourage the adoption of EVs in Australia makes sense.

The couple, who run a cropping and livestock farm at Kojonup, about 300km south-east of Perth, decided to buy an EV last year.

Man and woman holding a black puppy standing in a shed in front of their electric carKojonup farmers James and Nina Hope are feeling good about their decision to get an EV.(ABC News: Daniel Mercer)

Mrs Hope said the decision was philosophical as much as anything else.

But she said a big benefit had also been a sharp fall in fuel and maintenance costs since buying the vehicle.

“I used to spend a lot of my time driving to Albany [150km away] to get the car serviced… and it just got hard,” she said.

“This [EV] … you don’t have to service it, ever.

“We just thought it was the right thing to do at the right time.”

Mr Hope was similarly convinced, saying the savings in operating costs made the vehicles an attractive option.

But, he said, increasing their driving range would be key to encouraging “country owners” to buy them.

“This is … in real life a bit over 500km range,” he said.

“If you got that to 700km real-life range, I think that covers 80 percent of the market.

“To me, range for country owners is going to be the key.”

Mr Hope said the nation’s federal energy policy had been “shocking for the last three election cycles”.

“We’ve just got to catch up with the rest of the world and be where we need to be,” he said.

“The technology is here … this car is fantastic.”

Posted 55m ago55 minutes agoThu 16 Jun 2022 at 8:32pm, updated 11m ago11 minutes agoThu 16 Jun 2022 at 9:17pm

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