On 27 June 2018, a resolution was passed in the Australian Senate for the establishment of a Senate Special Committee on Electric Vehicles. The Committee was instructed to investigate and report on the following matters:
- the potential economic, environmental and social benefits of widespread electric vehicle uptake in Australia;
- opportunities for electric vehicle manufacturing and electric vehicle supply and value chain services in Australia, and related economic benefits;
- measures to support the acceleration of electric vehicle uptake;
- measures to attract electric vehicle manufacturing and electric vehicle supply and value chain manufacturing to Australia;
- how federal, state and territory Governments could work together to support electric vehicle uptake and manufacturing, supply, and value chain activities; and
- any other related matters.
Following consideration of public submissions, five public hearings and approximately five months of deliberations, the Committee’s final report was released to the public earlier this week (Wednesday 30 January 2019).
The 180-page report (see https://acapmag.com.au/wp-content/uploads/2019/02/Senate-Select-Committee-Report-on-Electric-Vehicles-January-2019.pdf) to the Australian Parliament states that the market adoption of EV’s in Australia has been low to date concluding that “EV uptake in Australia lags behind that of other comparable countries due to a relative absence of overarching policy direction from Australian Governments”.
The report went on to note that the low adoption of EV’s could largely be attributed to several factors, including the “higher upfront cost of EVs, concerns about driving range, lack of recharging infrastructure, and limited model availability are key factors hindering consumer uptake”.
These conclusions are relatively well supported by any objective assessment of the development of the Electric Vehicle Market in Australia over the past five years.
Examination of new car sales statistics in Australia over the past five years reveals that sales of pure electric vehicles, as opposed to hybrid vehicles, have accounted for just 0.07% of new cars sold in Australia in the last 5 years – albeit that the figure grew to 0.13% in the last 3 years.
“If Australia is to reach the often-quoted target of 1 million electric vehicles by 2030 (i.e. 7% of all cars in operation in 2030), then annual sales of EV’s will have to increase 100-fold from 2020 onwards”, said ACAPMA CEO Mark McKenzie
“As stated in the media this week, the fuel retail industry is ready and willing to accommodate EV recharging on service station forecourts, but the very low rate of growth coupled with the high cost of fast charge infrastructure means that the business case for such investment does not currently exist”, continued Mark.
For its part, the Select Committee developed a series of recommendations to the Australian Government around two key priorities, namely:
- Australian Governments should prioritise the development of a national EV strategy and an inter-governmental taskforce to lead its implementation. National EV sales targets could be set to deliver certainty to business and consumers, and careful examination should be given to policies that may be introduced to reduce the upfront cost of EVs and improve their price competitiveness with internal combustion engine vehicles.
- The Australian Government should set EV targets for the Australian Government Fleet and work with state and local government to coordinate fleet procurement. It should partner with business to manage and facilitate the roll out of charging infrastructure, establish consistent national standards, and ensure new developments and the electricity grid are ‘EV charger ready’. Government could actively assist industry to develop its domestic EV manufacturing and supply and value-chain capabilities
The Committee’s recommendations will now be considered by the Australian Government with a view to determining next steps.
“ACAPMA stands ready to work with Australian Governments on the development of economically sound recharging infrastructure in line with market demand – as is already being done with the Queensland Government in respect of the Queensland Electric Vehicle Highway initiative”, added Mark.
The release of the Electric Vehicle report is the first of three Australian Government reports to be released before Federal Parliament resumes in mid-February 2015, that will likely have implications for the fuel businesses in Australia.
The second is the report of the Hayne Royal Commission into the Australian Banking Industry. Scheduled for release on Monday 4 February 2019, the findings of this report will likely have implications for future access to credit for small to medium businesses.
“Over the last 8 months we have been getting feedback from members about recent difficulties experienced in gaining access to affordable credit for asset financing and have raised this issue with both the Federal Treasurer and the Governor of the Reserve Bank of Australia, via our membership of the Council of Small Business Organisations of Australia (COSBOA)”, said Mark
“Any recommendations that have the effect of further tightening access to credit for business will be viewed with concern, given that more than 70% of the nation’s 7300 service stations are currently operated (though not necessarily owned) by small to medium businesses”, Mark added
The third report of interest is the long-awaited report of the Joint Parliamentary Inquiry into the Operation of the Franchise Code of Conduct and Oil Code of Conduct.
This Inquiry has been investigation a series of issues that go to the very heart of the commercial relationship that sits between fuel marketers and commission agents (and to a lesser extent between fuel marketers and Dealers). The Inquiry was, at least in part, triggered by the revelations of wage underpayment across several Australian industries (i.e. retail, fuel retail, hospitality, restaurant and catering, and transport)
The Inquiry Report is due to be released on Thursday 14 February 2019, with the release date having already been delayed twice from the original reporting date of 30 September 2018 due to the volume of submissions received.
It goes without saying that all three of these reports are of interest to our industry. ACAPMA has been, and will continue to, engage with the Australian government on the implications of these reports for fuel wholesale and fuel retail businesses in Australia.
Further information about these government reports and ACAPMA’s responses to same, can be obtained by emailing email@example.com.