Electric vehicles are booming in Melbourne’s outer suburbs, but cost is holding some back
By Sourced Externally
September 8, 2023
Dismayed by mounting costs, Sudeep Thomas decided his new car would be an electric vehicle.
The Tarneit man was driving 120 kilometres a day from Melbourne’s west to his job in the eastern suburb of Mulgrave.
He calculated it was costing him $30 a day in petrol, not including tolls.
It was a difficult decision initially because of the price — the car he wanted was $85,000.
Despite taking out a loan to pay for it, and estimating it would take seven years to pay back, Mr Thomas has no regrets.
He can get to and from work in one charge and has reduced his running costs to $50 a month by powering up at home using rooftop solar.
“Financially it’s great,” he said.
“And I think battery cars are the next big thing.”
Mr Thomas said two of his neighbours had also purchased electric vehicles since he bought his.
He said he had noticed more driving around his suburb, which was reflected in data from the Australian Automobile Association.
Mr Thomas’ postcode 3029, which includes Tarneit, had 344 electric vehicles registered in January — a steep increase from 37 in 2021.
And Mr Thomas’ municipality Wyndham City Council has had almost seven-fold growth from 117 in 2021 to 916 in January 2023.
It reflected a pattern of significant growth in electric vehicles across some of Melbourne’s outer suburbs, particularly in the west.
Carloop founder Riz Akhtar said more people had been buying electric vehicles in Melbourne’s growing outer suburbs in the past couple of years, particularly in Casey, Wyndham and Melton.
The electric vehicle data analyst said the growth could be associated with a recent drop in prices.
“Prices of electric vehicles have come down — sometimes up to 10 to 15 per cent — and it’s helped a lot more people take the leap,” he said.
“People in the outer suburbs are travelling further and they are quite happy to purchase these vehicles because it will pay off in the long-term.”
Electric Vehicle Council energy and infrastructure head Ross De Rango said electric vehicles were practical for people living in the outer suburbs.
“The housing mix in the outer suburbs is tilted more to the direction of standalone homes, which makes it easier to charge a car in more homes,” he said.
“An electric vehicle is increasingly valuable the more kilometres you drive, and people who live in the outer suburbs tend to do more driving than people in the inner suburbs.”
Inner city leads charge
Despite the growth, the outer suburbs have a smaller proportion of electric vehicles when compared with the inner city.
About 0.37 per cent of cars in the outer suburbs are electric vehicles, compared with 0.69 per cent in town.
While prices have come down, Mr De Rango said the cost to purchase an electric vehicle remained high, and “wealth distribution is skewed towards the inner suburbs”.
The cheapest new electric vehicle is about $45,000, with most models costing more than $60,000.
The ABC compared the median income for each metropolitan Melbourne postcode with the proportion of electric vehicles.
The chart suggests if a person has a higher income, they are more likely to drive an electric vehicle.
High costs will come down
Mr De Rango said it was expected a new technology would price people out.
“Any new technology is likely to be adopted first by people who have disposable income,” he said.
“It’s going to be important to ensure as this transition occurs, we don’t leave people behind.”
He said there were ways to make the price drop faster, such as accelerating the second-hand electric vehicle market.
The average car in Victoria is 10.8 years old, and it is getting older, indicating Australians are not buying brand new cars in droves.
Mr De Rango said corporate fleets, such as vehicle rental companies, turned over cars to the second-hand market faster and should be helped to purchase electric vehicles.
Policy change to make EVs cheaper
Grattan Institute transport and cities program director Marion Terrill said the biggest issue was not the demand for electric vehicles but the supply.
“People are very keen to get their hands on an electric vehicle and there are just waiting times,” she said.
She said electric vehicle subsidies, including the Victorian government’s recently axed $3,000 payout, would not significantly bring the cost down for many.
The government scrapped the subsidy for zero-emission vehicle purchases in June — a year earlier than planned.
Ms Terrill said the federal government should change the parallel imports law.
Australia’s laws restrict a wide variety of second-hand electric vehicles from entering the country and being sold due to competition with existing car markets.
She said changing the laws would mean a greater number of affordable electric vehicles could be sold in Australia.
“People can import second-hand vehicles in New Zealand, and it’s a thriving market,” she said.
She said the federal government should also enact a vehicle emissions standard to allow cheaper new electric vehicles to be imported and sold in Australia.
The federal government has flagged it would establish one, and the details would be made clear towards the end of the year.
“Those two policies in combination will bring down the prices of electric vehicles,” Ms Terrill said.
Australian Electric Vehicles Association president Chris Jones said the government needed to act quickly as all of Australia was behind the rest of the world in electric vehicle uptake.
“If we become an attractive market, they’ll start selling them — but at the moment we’re not.”
New electric vehicle sales
A federal government departmental spokesperson said the government had implemented a range of initiatives to increase new electric vehicle purchases.
“To encourage manufacturers to supply cleaner, more fuel-efficient cars, we’re implementing a fuel efficiency standard and considering Euro 6 noxious emissions standard for light vehicles,” the spokesperson said.
“It’s become easier for industry to import new and second-hand specialist and enthusiast vehicles under the 2021 Road Vehicle Standards legislation.
“In May 2022, the proportion of electric vehicles among new car sales was 2 per cent. Now it is around 9 per cent.
“This owes in large part to the Electric Car Discount Policy, which provides a fringe benefits tax exemption for electric vehicles below the luxury car tax threshold.”