Why are we talking about EVs now?
A more pertinent question might be: why weren’t we talking about them earlier? The treasurer, Josh Frydenberg, tried to start a discussion in January 2018, when he was responsible for environment and energy, comparing the expected trajectory of EVs to that of the iPhone. He said changes in battery technology and recharging infrastructure were gaining momentum in Europe, Asia and North America that would inevitably be replicated in Australia, and predicted people that who mocked EVs would one day be driving them.
After a relatively quiet year, including a couple of relatively low-key fundingannouncements, the issue was thrust back into the spotlight last week when Labor led its climate policy announcement with a target of 50% of new cars being electric by 2030.
What else is Labor promising?
Arguably, just as significant is that the ALP says half the cars in government fleets should be EVs by 2025. The 2030 target is mostly intended to send a signal to carmakers and the public, but analysts say the fleet policy would quickly drive change, including ensuring some long-promised recharging infrastructure would be built and creating a second-hand EV market.
Labor wants to introduce vehicle emissions standards requiring light cars to on average emit 105 grams of CO2 per kilometre, based on a US example and less than most cars on Australian roads. It would allow businesses to claim a 20% deduction on EVs that cost more than $20,000, kick in $100m for charging infrastructure and require federally funded roads and developments to include EV tech.
What about the government?
Though it has been highly critical of Labor’s stance, the Coalition promised its own national electric vehicle strategy as part of its “climate solutions” package in February. Few details have been released but the policy document says it would deliver cleaner air, better health, smarter cities and lower transport costs and emissions for all Australians.
It considered introducing the same vehicle emissions standard proposed by Labor, receiving advice it would result in a net economic benefit, but balked.
The government and its media supporters have been scathing of Labor’s approach. Scott Morrison accused Bill Shorten of wanting to “end the weekend” by forcing people out of four-wheel drives, denying people a choice on what they drove and ending the Australian love affair with cars “with a bit of grunt”.
Sounds like everyone’s on roughly the same page?
Not exactly. Other claims: critics say EVs are expensive; that a rapid expansion would just mean more greenhouse gas emissions given Australia’s reliance on coal to generate electricity; supporting EVs would deny the government billions in fuel excise; Shorten had incorrectly claimed that an EV could be charged in 10 minutes when they in reality take much longer.
Was Shorten wrong about the charging times?
The Labor leader arguably misstepped in not properly qualifying his 10-minute claim but he was not wrong. The cheapest EV available in Australia, the Hyundai Ioniq, takes about four hours to charge when plugged in at home. But the Coalition last year announced it was spending $6m on an ultra-rapid charging network. In a statement at the time, the energy minister, Angus Taylor – one of the most vocal critics of Labor’s policy – said the network would provide up to 400km driving after just 15 minutes of charging time, and it was expected there would be a charging point every 200km.
Tim Washington, a co-founder of Chargefox, the company that won the contract to roll out the network, responded to Taylor’s attack on Labor last week by tweeting a photo of a charger funded by the government that can provide 200km charge in eight minutes. The energy boss Trevor St Baker, a strong supporter of coal and the Coalition, told the Australian that his company, Tritium, could charge for a 350km trip in 10 minutes and was building 200 plug-in stations across Europe.
Would EVs cost the Treasury in lost petrol excise?
Quite possibly. A Bloomberg New Energy Finance put the cost to the budget at more than $1bn by 2030. There have been suggestions that stamp duty and car registration should also be waived and that some of the lost revenue could be offset through new road-user charges, but these debates are just beginning. It is worth noting this is an argument about the loss of a fraction of the income tax cuts proposed by both major parties.
Won’t charging EVs mean more emissions from coal-fired power plants?
The point about emissions from coal might carry slight weight if Australia were to maintain its current level of reliance on coal, but no analyst or political leader believes that will happen. Labor has a target of 50% renewable energy by 2030. The Coalition is not as ambitious but the Australian Energy Market Operator last year projected the country would reach nearly 50% within 11 years under current settings alone. Some studies suggest EVs are already less greenhouse-intensive than petrol cars in all states except Victoria, which still largely runs on brown coal.
Will EVs destabilise the power grid?
Despite some headlines suggesting it could lead to electricity network armageddon, most studies have suggested the introduction of EVs could help stabilise the evolving system – if properly managed. Scheduling home charging for off-peak times, such as the early hours of the morning, could even out demand across the day and help with stability and prices, according to a report by the EV software company Evenergi. EVs are also expected to be able to store excess energy and feed it into the grid when necessary. In 2016 the energy market operator found the arrival of EVs should have relatively little impact on total electricity consumption.
Are EVs too expensive?
It’s true that EVs are costly: the Electric Vehicle Council says there are only four models in Australia cheaper than $60,000, with three more promised this year. Not surprisingly, more developed markets have more options – Britain has 27 in this price bracket. Bloomberg New Energy Finance projects a rapid fall in the cost of lithium ion batteries will lead to EVs being as cheap as petrol equivalents by 2025.
Will they lack ‘a bit of grunt’?
Morrison warned that the Toyota HiLux, beloved by tradies, would be “out under Bill Shorten”. He didn’t mention that Toyota has a goal of making a hybrid, hydrogen fuel cell or EV version of every car it sells by 2025.
Most manufacturers are taking similar steps. Already on the market is Tesla’s Model X, an expensive mid-sized SUV marketed as being able to go from zero to 100km in less than three seconds.
How does Australia compare with the rest of the world?
Remember what Frydenberg said about Europe, Asia and North America being more advanced than Australia? He was right.
Norway is the most commonly cited example and world leader: 58.4% of cars sold in March were EVs. In the US 2% of cars sold last year were EVs or plug-in hybrids. In China it was 4%, but the country still accounted for more than half of global sales, up 62% on 2017.
In Australia the proportion of new sales is just 0.2%, the lowest among developed countries. But Senate estimates last week heard that department modelling found that would rise to between 25% and 50% by 2030 under the Coalition’s commitment to use clean cars to cut emissions by 10m tonnes. It suggests that, beyond the hyperbole and electioneering, the major parties’ goals on EVs are not as far apart as you might think.
Extracted from The Guardian