Australia needs to spend up to $30 billion installing fast-charging stations to prepare for the rapid influx of electric vehicles which is predicted to hit in the next five years, according to new analysis by consultancy firm EY.
Although the coronavirus has hit both petrol and electric vehicles sales in the first quarter of this year, EVs are still expected to reach a tipping point in Australia as they become cost-competitive with traditional combustion engine vehicles.
But EY energy partner Matt Rennie said Australia was behind other developed countries when it came to providing the public infrastructure needed to deal with electric vehicles, especially to help overcome the “range anxiety” which will facilitate the broader uptake of the new technology.
EY analysis showed there needed to be between $6 billion and $30 billion invested in fast-charging stations – depending on the uptake of vehicles – to allow the EV revolution to hit Australia.
“The reality is that EVs and combustion engines will share the road and if we don’t plan now for the infrastructure we need for EVs, Australia will be left behind in a changing world and without the technology we need to move forward,” Mr Rennie said.
Mr Rennie said there needed to be public-private co-investment in charging stations for EVs.
State governments, such as Queensland and NSW, have already started providing charging stations for the almost 7000 EVs currently in Australia. The EV industry is also rolling out its own infrastructure.
A BloombergNEF report released on Tuesday predicted the world would need 290 million charging points by 2040, including 12 million in public places, requiring $US500 billion ($763 billion) in investment. The bulk of these would be at home, the workplace or private businesses.
The Morrison government is under pressure to do more to encourage the development of EVs as they become more affordable than conventional vehicles.
A long-awaited electric vehicle policy is expected mid-year, but EVs are likely to be a part of federal Energy Minister Angus Taylor’s “technology road map” due out shortly.
Electric Vehicle Council chief executive Behyad Jafari said the policy settings in Australia were working against the successful uptake of EVs.
Electric vehicles make up only 0.6 per cent of new car purchases in Australia, compared to the global average of 3.5 per cent. There are 7 million EVs globally.
Mr Jafari said the cost estimates of infrastructure needed for EVs “varied widely” but would depend on whether Australia wanted to be prepared for the uptake of EVs or play catch up when they arrive.
EVs in Australia are often lumped in with the “climate wars” pushing back against assistance for renewable energies, he said.
“The federal government is looking more at what do once EVs arrive rather than look at what would kickstart the market and get the vehicles here in the first place,” he said.
“Other countries provide tax incentives which not only even the playing field, but make electric vehicles the better option. Without those being in place, you are paying more for the new technology and then taxes on top of that.”
Mr Jafari said if Australia doesn’t get its policy settings right then the “tipping point” for EVs in Australia, may not be until 2030 or even later.
In February, British Prime Minister Boris Johnson announced the UK would bring forward the ban on petrol and diesel cars from 2040 to 2035, as part of its strategy to achieve net zero emissions by 2050.
Tesla chief executive Elon Musk – who has been chasing the holy grail of an affordable mid-market electric vehicle for years – this week announced it was planning to build a low-cost, long-life battery in its Model 3 sedan in China which would make EVs even more cost-competitive with combustion engine vehicles.
The new batteries are aiming to last for 1 million miles (or 1.6 million kilometres) of use.
All the big car manufacturers, such as Mercedes, Volvo and Audi, are all making EVs, although they are still seen as a luxury product, rather than a mass market product.
The BNEF report predicted the sale of electric vehicles would fall 18 per cent in 2020, to 1.7 million vehicles worldwide, due to the coronavirus.
This was the first blip in 10 successive years of growth for EVs.
But the sale of combustible engine cars would fall even faster, by 23 per cent this year, BNEF found.
EVs are still expected to account for 58 per cent of passenger car sales globally by 2040 and 31 per cent of the whole car fleet.
Extracted from AFR