New car sellers directed by manufacturers to install electric vehicle chargers at their dealerships are warning much of the $1bn price tag – including unexpected local power grid upgrade costs – will have to be passed on to Australian customers.

The nation’s 3,178 dealerships are facing huge a capital spend as part of the car industry’s transition to lower emissions, which an investigation commissioned by the Australian Automotive Dealership Association (AADA) has found will cost more than 15 times the $60m provided by the federal government to help dealers install chargers.

AADA chief executive James Voortman said dealerships had “no choice” but to invest in electric fast charging and grid upgrades as manufacturers were making it a “condition of their supply agreements,” and warned the costs would flow to new car buyers.

“The cost of chargers is only one element of the automotive industry’s transition to lower emissions,” he said.

“Other outlays include retraining of vehicle technicians and other staff as well as the purchasing of EV specific tools and equipment.

“All of this just adds to the cost of doing business and one need only look at the current cost of living crisis that this has a direct impact on the customer who ends up paying more as these costs are passed on.”

Mr Voortman said Labor’s $60m charging fund for dealerships was a “welcome first step,” but the sector estimated the “cost to industry will be significantly higher”.

“We also need to have a discussion in terms of what is reasonable for a manufacturer to demand of a dealer in making these investments,” he said.

AADA found the capital investment for chargers and electricity upgrades was expected to range from $130,000 for a “typical regional dealer” to $580,000 for a “typical rural dealer” in Australia.

Central Coast Motor Group general manager Lee Wills said the cost of EV chargers was “significant,” but the expense that had “completely blindsided” dealers was the local grid upgrades required to facilitate the use of fast chargers.

“Upgrading the grid for a multi-franchise dealership can cost up to hundreds of thousands of dollars for a small to medium site,” he said.

“We are very supportive of providing EVs to our customers, but it does seem unfair that businesses in the community have to carry the cost of upgrading the country’s electrical infrastructure.”

EV sales share in Australia doubled through 2023 to about 8 per cent, with demand expected to continue to grow.

In addition to manufacturers requiring dealerships to have EV chargers, the government is under pressure to accelerate the construction of public chargers as there are more than 83,000 electric cars now on Australian roads.

Climate Change and Energy Minister Chris Bowen on Monday revealed a record 100 new public fast charging sites had opened around Australia in the first three months of 2024, describing the rollout – now totalling 900 sites – as “going well”.

“That brings us to a total of 3000 public charging sites, regularly charging sites with 7000 charging sockets,” he said.

Mr Bowen said Labor was pursuing its policy of one fast charger once every 150 kilometres, and he was “very confident” of seeing a “big uptick” in infrastructure built in the next three to four months.

“Australians want to know if they want to go for that longer journey, for that great Australian road trip, that family holiday, that they’ve got options as well,” he said.

“I think a lot of Australians don’t realise just how fast the charging (rollout) is happening, that actually you can make this (EV) purchase … with the self-confidence to know that there will be a charger there when you need it.”

Last week Labor introduced its new vehicle standards bill into the parliament, and Mr Bowen said he was “confident” it would pass.

He dismissed the Opposition’s criticism the standards would drive up the cost of cars, and said Australians knew EVs and more efficient vehicles were the “way of the future”.

Coalition transport spokeswoman Bridget McKenzie said the Opposition had “no confidence” in Labor’s new standards proposal and criticised the government for concealing “modelling” the policy is based on.

“We will not support a policy that increases the cost of buying cars in the middle of a cost-of-living crisis,” she said.

Under Labor’s plan an emissions cap would be placed on fleets of new SUVs and light commercial vehicles, including utes, sold in Australia and impose a financial penalty on manufacturers who exceed this limit.

The cap will be decreased by 60 per cent for SUVs and 50 per cent for utes by 2030 in an effort to accelerate the sale of more efficient fuel, hybrid and electric vehicles in Australia.

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