SYDNEY — Electric vehicle sales jumped in Australia last year, even as government policy delays and a preference for gas-powered SUVs and pickup trucks leave the country trailing global peers in EV adoption.

A record 1.21 million new cars were sold in Australia in 2023, breaking the previous high of 1.18 million set in 2017, according to figures from the Federal Chamber of Automotive Industries (FCAI) released last week.

Battery EVs made up 7.2% of the total, up from 3.2% in 2022, while hybrid vehicles accounted for 8.1%, a slight increase from 7.9% the previous year.

Those gains come as Australia works to speed up EV adoption among its 20 million citizens of driving age. Only 0.6% of cars on Australian roads are electric, compared to 1.3% in the U.S., 2.8% in the U.K. and 4% in Germany, data from the International Energy Agency show.

To incentivize the transition to EVs and help meet its carbon reduction targets, the nation’s federal government plans to introduce a long-awaited fuel efficiency standard for automakers.

Currently Australia sits alongside Russia as one of only a few members of the Organization for Economic Co-operation and Development (OECD) without mandatory fuel economy laws.

The ruling Labor party, which passed a law in 2022 to reduce greenhouse gas emissions by 43% by 2030 and reach net zero by 2050, had promised to release its model for the fuel efficiency standard by the end of last year but is yet to do so.

The standard will set an average target of carbon emissions per kilometer for the fleet of cars sold by automakers, with those that beat the target receiving credits they can then sell to car companies that exceed the limit.

Its details are being developed following a public consultation process that received 2,700 submissions, a spokesperson for the transport department said.

“Designing the best possible [fuel efficiency standard] to suit Australia’s circumstances is complex, and the Government is committed to taking the time to get it right,” the spokesperson said via email.

Scott Dwyer, research director of the University of Technology Sydney’s Institute for Sustainable Futures (ISF), said such regulation would send a signal to manufacturers to bring more electric models to Australia and avoid the country becoming “a dumping ground for the most polluting vehicles.”

Last year, there were only 60 EV models available in Australia, compared to 230 in the European Union, according to a government letter seeking input for the fuel efficiency standard policy.

Australia’s EV market is currently dominated by Tesla and BYD, which last year sold 46,116 and 12,438 new cars, respectively. Dwyer said he expected EV offerings would grow quickly.

“You’ll see so many more models coming out in Australia of battery electric and plug-in battery electric models this year and more choices,” Dwyer said.

Affordability remains a challenge in going electric. Just 15 of the EV models available in Australia cost under 65,000 Australian dollars ($43,400), with the mean price of a new EV about AU$113,000, according to PricewaterhouseCoopers.

Developing a secondhand market will be another key to making EVs competitive with internal combustion engine cars, Dwyer said. And that, he added, will rely heavily on large-scale purchases by governments and big companies.

“The importance for fleets adopting electric vehicles is that they hold on to the vehicles for three, four or five years, and those vehicles are then released into the secondhand market to provide a more affordable supply of battery electric vehicles that … have lower running costs,” he said.

FCAI Chief Executive Tony Weber said the body wanted to see an “ambitious but achievable” fuel efficiency standard that took into consideration Australians’ budgets and preferences.

“We need to bring consumers along because, ultimately, the success of a fuel efficiency standard is determined by the response of consumers,” he said.

The FCAI figures show that SUVs were by far the most popular model of car, accounting for 57% of sales in 2023, followed by light trucks (known as utes in Australia), at 23%. Passenger vehicles comprised 17%.

Scott Collie, head of content at the CarExpert website, said adoption of electric SUVs appeared promising, with the Tesla Model Y the best-selling EV and among the most popular cars overall. He added, however, that price and limited choice still weighed on the EVs in the segment.

And while electric pickups are able to compete with the off-road and towing capabilities of their internal combustion engine counterparts, they are still seen unfavorably compared to non-electric models.

“It’s not as if electric utes don’t exist. There are some really interesting options in the U.S.A. that will hopefully eventually come to Australia,” Collie said.

“But at the moment, there’s a lot of affordable, really capable utes out there that will do a lot of adventurous stuff that people like to do with these cars, and the electric equivalents just aren’t quite there yet because the technology for those owners, who are going to take them right to the edge of their capability, also isn’t quite there yet,” he said.

“Range anxiety,” meanwhile, has prompted calls for more charging stations to be rolled out across the country, one of the world’s least-densely populated. Collie said the rise in sales was putting pressure on public charging sites. Although this was unlikely to be hampering demand at the moment, insufficient EV infrastructure would become a “major problem” in the future.

Extracted in full from:  https://asia.nikkei.com/Business/Automobiles/Australian-EV-sales-accelerate-as-nation-plays-catch-up-on-adoption

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