On Friday, the Albanese government will roll out its signature electric vehicle policy – an electric car discount removing the 5 per cent import tariff on some imported EVs and the 47 per cent fringe benefits tax on electric cars provided by employers. While these important steps will make EVs more affordable, growing sales and long waiting lists for EVs in Australia demonstrate that our uptake is limited not by consumer demand, but by supply constraints.
So, what is the key to unlocking the EV supply chain? Fuel efficiency standards would incentivise manufacturers to bring their low- and zero-emissions vehicles to Australia – and penalise them for failing to do so.
Fuel efficiency standards are used to regulate the average CO2 emissions of a manufacturer’s fleet and serve to reduce both fuel consumption and CO2 emissions. They’ve been adopted in most countries worldwide; Australia, Turkey, Indonesia and Russia are the only G20 countries with no mandatory standards for fuel efficiency.
In the short term, we need our government to shape the direction in which this market is moving.
Put simply, this means manufacturers have no incentive to supply their best cars to our market. We’ve become a dumping ground for vehicles that fail to meet efficiency and emissions standards in Europe, the US and Asia. We get the cars no one else will take because our government has never moved to set fuel efficiency (and related fuel quality and vehicle emissions standards) comparable with major markets around the world.
So, adopting fuel efficiency standards would open the Australian market to EVs. What else would it do?
Save Australians money: government modelling has shown that legislating targets for fuel efficiency for vehicles sold in Australia will save us money. The average car user in Australia would save between $237-$519 per year from using less petrol. Those calculations were based on a fuel cost of around $1.30/litre – much less than the current price of petrol – and did not include the additional $140 per vehicle per year of healthcare costs related to vehicular pollution.
Reduce greenhouse gas emissions: emissions from passenger and light vehicles represent 57 million tonnes – 10 per cent of Australia’s total carbon emissions. There are about 24 million cars on Australian roads. Less than 1 per cent are electric. The average car sold in Australia stays on our roads for at least 15 years. Electrified transport can be powered by renewable energy. The zero emissions from running these vehicles will decrease our carbon emissions by 10 per cent
Improve our health: Australia has the dirtiest petrol in the OECD. Every year in Australia, more people die from respiratory diseases related to vehicular pollution than from road traffic accidents. Transitioning away from internal combustion engine vehicles will improve air quality and reduce pollution-related diseases.
Reduce reliance on imported fuel: The price of petrol has sky-rocketed; we’ve all felt the pinch from that. Australia has only two fuel refineries; we’ve struggled in recent years to comply with the International Energy Agency’s minimal stock-holding requirements for liquid fuels. Boosting EV uptake and investing in renewables will help address our fuel insecurity.
Improve energy storage capacity: Cars such as the Ford F-150 Lightning can tow up to 2300 kilograms and work as a mobile generator for tradies or power our homes. These are enormous mobile batteries with the bonus of a free car thrown in. They won’t kill our weekends – but they will slay the camping ground.
In the short term, we need our government to shape the direction in which this market is moving. The Albanese government must introduce robust fuel-efficiency standards equivalent to global best standards. These will cost us nothing but will ensure manufacturers supply a greater range of affordable EVs to our market, rather than being offered only polluting internal combustion engine vehicles and the luxury end of the EV market.
Yes, we will also need expanded charging facilities. Yes, our corporate and government fleet purchasers should commit to large-scale EV fleet purchases, increasing the supply of second-hand EVs in this country in the second half of this decade. Yes, we need package incentives. Yes, we need better vehicle emissions standards for non-CO2 emissions, which also have implications for our health. Each of these steps will contribute to our move away to cleaner, healthier transport options.
Extracted in full from: https://www.afr.com/policy/energy-and-climate/how-the-albanese-government-can-unlock-the-electric-car-market-20220628-p5ax8s