National Electric Vehicle Strategy

The Australian Government’s Powering Australia plan sets out our commitment to reduce emissions by 30% by 2030 and net zero emissions by 2050.

Australia as a nation is a large continent – that means we have, 7.7 million km2 of country to cover. This presents significant challenges considering the future of road transport – the age of the Electric Vehicle (EV.)

In 2021, global EV sales sat around 9% as a proportion of all new car sales. The EV market share lags the rest of the world but is steadily increasing. The share increased from 2.05% in 2021 to 3.8% of all light vehicle car sales in 2022 according to the Electric Vehicle Council.

With this information we can conclude that Australians are in the market for EVs. Compared with equivalent Internal Combustion Engine (ICE) vehicles, EVs are cheaper to run and much better for the environment.

However, there are many constraints to EV take up in Australia. Currently, there is a lack of coordinated policy on supporting EVs through greater infrastructure and removing barriers to entry so Australians can access greater supplies and choice, driving competition and costs down.

A lack of strategy and direction on EVs has caused shortages of supply among would-be car buyers to consider EVs. Some models, such as the Hyundai Ioniq 5, sold out its allocation of 200 or so cars in under 10 minutes in 2022. Many people who may want EVs may at the moment, unfortunately go without. There is also hesitancy among the car buyers due to concerns about the general unavailability of charging stations and the higher initial price of EVs compared to ICE vehicles, despite lower overall running costs.

To address these problems, The Federal Government has unveiled a National Electric Vehicle Strategy to accelerate the transition to EVs among the industry and the general public.

According to the Government, transport is touted to be the largest emitter of carbon by the end of the decade. Passenger cars and light commercial vehicles alone contribute 60% of our transport emissions and over 10% of Australia’s total emissions. To achieve the goal of net zero carbon emissions, this new strategy, and the policies it will inspire are meant to communicate to the global EV industry: “Australia wants your EVs.”

The first step towards achieving greater EV take-up is to introduce a Fuel Efficiency Standard. Australia is only one of two advanced economies without a comprehensive Fuel Efficiency Standard. In the absence of these standards, new cars in Australia use 40% more fuel than cars in the European Union, 20% more than the United States, and 15% more than in New Zealand.

This new standard will encourage car manufacturers to supply more EVs to Australia, improving consumer choices and driving prices down.

According to Cars Guide, there are only 58 different models available for consumers in 2023. This strategy hopes to improve the availability and range of vehicles over time, giving buyers access to even more models, especially in the budget-conscious market segment. There is also an increasing range/availability of utility and industrial electric vehicles. These include commercial electric utility vehicles, special purpose (EV) and electric trucks.

The Strategy will also help EVs fit in at work and at home, with projects like recycling batteries, planning infrastructure, designing EV-friendly apartment buildings, and giving first responders world-leading training.

Further along, this will lead to greater green jobs opportunities in manufacturing and other areas to reduce emissions. The Government will train people in these jobs with New Energy Apprenticeships and the New Energy Skills Program.

The electric vehicle strategy will also address the very real concerns about “range anxiety” – currently the top, and most expensive models have travel ranges of about 590km, which is inadequate for cross-country travel in one hop. Providing better infrastructure with ultra-rapid fast charging stations along major arterials and highways is a priority of this Strategy. The Government’s first National Electric Vehicle Charging Network in Australia aims to install chargers at 150km intervals along major highways in partnership with the NRMA, ensuring EV drivers have as many choices to top-up their batteries as ICE drivers do to fill up their fuel tanks.

The National Strategy builds on the work previous State, Territory, and Federal Governments have put into the EV sector. Plug-In EVs are EVs are already cheaper because of tax breaks, and the Driving the Nation Fund is spurring on critical infrastructure changes.

Encouraging standards and greater choice will spur on a reduction in road transport emissions, increase local manufacturing and recycling, and make EVs more affordable and appealing to buy through further reducing running costs.

How The National Electric Vehicle Strategy Will Reduce Emissions

The Federal Government has made a commitment to reduce national emissions to 43% below 2005 levels by 2023 and net zero by 2050.

According to the DCCEEW, 19% of Australia’s carbon emissions is produced by transport, with passenger vehicles contributing 10% of total emissions. This has trended up since 2005, with a sharp decline during 2020 and 2022 due to reduced passenger travel due to COVID-19 lockdowns. During April-June 2022, emissions increased 2.6% on the previous three months as jurisdictions abandoned lockdowns as a COVID-19 control measure.

EV use around the world is increasing. In 2012, 120,000 EVs were sold annually worldwide. In 2021, 120,000 are sold each week.

Despite all this, Australia lags behind global leaders in EV sales. EV sales accounted for 9% of the total global car market in 2021. The European Union recorded 17% of car sales being EVs, followed by 15% in the United Kingdom and 4.5% in the United States. As mentioned earlier, the share of new light passenger cars sold that were EVs stood at 3.8% in 2022.

As light passenger cars have a 15-to-20-year lifespan, introducing EVs as a viable alternative to ICE cars right now will reap rewards for emissions targets in the future.

Light passenger and commercial vehicles comprised 62% of Australia’s transport emissions in 2019 and 60% in 2022. We can only hope to reduce emissions by 6M tonnes by 2035 (compared with 2019 levels) if we use the same methods of transport we do today.

Transitioning from ICE to EV fleets also benefits the Australian economy. Australia’s natural gifts of mineral resources, abundant capital, and highly effective skills training could lead to greater economic growth and prosperity for our citizens.

Why Should Australians Drive An Electric Vehicle?

EV ownership is far less contentious as a choice for one’s next passenger vehicle compared with ten or even five years ago. The usual refrain from EV proponents was that EVs reduce carbon emissions and have a positive impact on the environment by removing an ICE vehicle from the road. However, the argument against was usually based on initial price, availability, and lack of infrastructure.

With this new Strategy, the Government seeks to bolster the argument for EV purchases by introducing greater supply, incentives, and investment into charging infrastructure both on the road and at commercial or residential premises.

Technology and innovation

Though EVs are currently more expensive to purchase than equivalent ICE vehicles, the upfront costs will decrease over time.

The new Electric Car Discount introduced by the Government in 2022 exempts eligible EVs from fringe benefits tax (FBT). Further discounts are made available by waiving the 5% import tariff on EVs, making EVs more affordable for more Australians.

Today, EV driving ranges are far greater than before and have increased around 50% since 2016. The average is 349km with some models driving up to 550km in ideal conditions, which can get a car to Sydney to Canberra without a top-up.

Residential chargers can charge an EV in six to 12 hours – however ultra-fast DC charging can charge an average-sized EV within 15 minutes to an hour. Fast charging is crucial to decrease downtime when travelling.

The government together with the NRMA is investing in a backbone fast-charging network on major highways, funding 117 charging stations with an average distance of 150km apart. This is coupled with joint investment by the States and Federal Governments with the private sector, such as the AmpCharge stations being rolled out at Ampol service stations at 140 sites across NSW, Queensland, Victoria, and WA. Charging brand bp pulse is aiming to deploy an additional 600 ultra-fast charge points in Australia.

Lower operating costs and future savings

Per kilometre travelled, EVs are far more efficient in their use of “fuel.” An average ICE will consume $2,400 worth of petrol per year compared with an equivalent electric vehicle at $400 a year.

On average, a petrol car will consume 10L per 100km; EV drivetrains can turn electrical energy into kinetic energy with 77% efficiency on average. Regenerative braking also helps top up battery levels, meaning fewer stops to charge from the grid. Compare this to ICE vehicles, which has a 25% efficiency.

As of 2023, many EVs are similarly priced alongside ICE vehicles in terms of safety and comfort features. Coupled with EV service and maintenance costs ending up 70% cheaper per kilometre ICE vehicles, this makes an investment in an EV more compelling.

EVs may also provide “futureproofing” for residential solar photovoltaic (PV) or renewable energy systems. Vehicle To Home (V2H) or Vehicle To Grid (V2G) technology enables a car to act as a battery for surplus solar energy when the car is not in use – and at present, EV batteries are four times the size of an average household solar battery. V2H can supply energy to the home when the solar system is unable to gather additional power or during the night. V2G systems can sell the energy back into the grid when there is too much solar power to be stored. This gives households greater flexibility in choosing where their power comes from, lower bills, and reduced reliance on fossil fuel power.

Emissions reduction and health benefits

Transport comprises about 25% of total emissions and is dependent almost entirely on fossil fuel consumption. Road transport contributes 75% of that share and decarbonisation of the road transport sector will help clamp down on emissions. Secondary emissions from charging an EV using the grid are already offsetting emissions from equivalent ICE vehicles.

This has many ongoing health benefits. Widespread adoption of EVs and utility electric vehicles will assist in reducing particulate matter and nitrogen oxide, which results in better air quality and reduced respiratory complaints requiring ongoing or immediate treatment, such as asthma attacks. This disproportionately effects poorer people than those with higher incomes. Pollutant exposure harms children, the elderly, pregnant women, and those with pre-existing chronic health conditions. As EVs are essentially “silent” this also reduces noise pollution.

Long-term exposure to polluted air from ICE vehicles is estimated to have cause 1,715 fatalities in Australia during 2015 – 42% more than the national road toll during the same period. Recent estimates by University of Melbourne research shows that emissions could be responsible for 11,105 premature adult deaths in Australia each year.

Increased safety technology

Modern passenger vehicle occupant safety technology has advanced to unprecedented levels in the past few years. The Australian New Car Assessment Program (ANCAP) as of 2023 has changed the definition of what a “five star” rating entails, recognising artificial intelligence and automated safety systems taking a role in ensuring safe travels.

Evidence suggests that EVs are less likely to catch fire than ICE vehicles. That does not discount the need for vigilance around electric shocks or electric-related fires. These are new challenges and risks for emergency services, workers, and technicians. Department of Infrastructure, Transport, Regional Development, Communications and the Arts has asked for public submissions on new safety requirements for EVs. At the same time, the Australian Competition and Consumer Commission (ACCC) is also looking at hazard prevention strategies around lithium-ion batteries.

Economic benefits – jobs and industry

With new technologies and innovations comes new opportunities for jobs, manufacturing, and skills. The transition to EVs will transform the transport sector across the supply chain, right from raw materials through to maintenance of EVs and support equipment like charging stations. Australia has the resources, capital, and capabilities to make this transition a success.

The International Energy Agency forecasts that minerals demand for use in EVs and battery storage could grow by at least 30 times by 2040. These are crucial to manufacture of batteries such as lithium, nickel, copper, and magnesium. Half of all raw materials for use in EV manufacturer are already mined in Australia. Australia is already the world’s largest producer of lithium, contributing half of global production. Our exports of lithium are tipped to increase more than 10 times over two years – $1.1 billion in 2020-21 to $14 billion in 2022-23.

 This gives Australian mining and manufacturing an advantage by becoming a net exporter, creating jobs for domestic production and international trade.

Tesla says that “if Australia can rapidly decarbonise its grid and provide industrial-scale renewable electricity at low cost, there is an even greater case for local refining and further value-adding to Australian battery minerals.”

The National Electric Vehicle Strategy is a unique opportunity to transform our road transport system into a renewable, low-cost, and zero emissions standard that can be followed by countries around the world. For more information, please contact ???.