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Electric vehicles for Australia: Not if, but how and when

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Most informed commentators have a rough idea of where our electricity network is headed over the next few decades – more distributed generation, more large scale renewables, more local storage, a smarter grid.

It is surprising then that the equally important issue of the transformation of our transport system is far less discussed and predictions vary widely.

Beyond Zero Emissions (BZE) says that with a concerted effort, the Australian car fleet could consist solely of electric vehicles (EVs) by 2025.

The CSIRO/ENA Energy Network Transformation Roadmap assumes as it central case that only 40% of light vehicles would be EVs by 2050.

AEMO bases its electricity forecasting on modelling by Energeia with a similar slow and linear transition.

Most of the existing predictions are based on assumptions of a gradual linear transition under existing business models and do not reflect recent overseas experience and the nature of technology transitions.

Taking these factors into account we expect that the transition to EVs in Australia will start later and happen faster than most existing predictions.

The Australian Electric Vehicle Association (AEVA) identifies five factors that need to be in place to support widespread take-up of EVs:

  • Familiarity: EVs should be seen as ordinary, with people understanding their characteristics and use
  • Adequate useable range: proposed by AEVA as being a minimum of 250 km real range on the highway
  • Perception of adequate infrastructure: enough charge stations located where required, in public locations as well as at home and common destinations
  • Variety of models to meet a range of needs: the vehicle market is highly differentiated in both features and cost
  • Cost comparability: whether achieved through lower selling price or subsidy/incentives to buyers.

AEVA stresses that all factors are required for substantial EV uptake. To date in Australia essentially none of these criteria have been met.

Once all five conditions are met, EV uptake will accelerate rapidly. In Norway, where some conditions are still not met (range of models, complete infrastructure coverage) or only recently met (adequate range), 30% of all newly registered passenger motor vehicles were EVs or plug-in hybrids (PHEVs) in 2016, and the take up rate continues to rise reaching 42% in June 2017.

So when are these conditions likely to be met in Australia?

  • Familiarity: we estimate that about 1% of vehicles would need to be EVs. At this level most people would encounter EVs from time to time as taxis, fleet cars at work, through friends that have one and hear about owners’ experience in general discussion.
    We estimate that this benchmark will be met between 2023 and 2028 but it could happen earlier.
  • Adequate useable range: Models with the 250 km range are likely to be more widely available from 2018 to 2019, although there will still be a market for cheaper, shorter range vehicles for second car / urban usage.
    In the short term PHEVs that have a 50-100km electric range plus an internal combustion engine for longer trips will also address the ‘range anxiety’ problem. In the longer term pure EVs will be cheaper and more reliable than PHEVs.
  • Perception of adequate infrastructure: Without significant investment and encouragement, incomplete charging infrastructure is likely to be a significant constraint on EV take up in regional areas and for urban dwellers that want the flexibility of taking their family vehicle on longer country trips to more remote areas. This is one of the areas where government initiatives can make the most difference to meeting the preconditions for EV adoption.
    Even with some initiatives starting now and public support, this is likely to be a 5 to 8 year process, though parts of south eastern Australia could get substantial coverage faster than this. Covering central Australia will take much longer.
  • Variety of models to meet a range of needs: we expect this condition to be largely met for sedans and SUVs relatively early in the 2020s and for other vehicle types between 2025 and 2030 on a global basis.
    However, we also expect that the Australian market will be one of the last to be served due to the historic low uptake rates, lack of incentives offered and the relatively small global market for right-hand drive vehicles. Consequently Australia may lag the rest of the world in receiving a growing range of models by two to four years.
  • Cost comparability: The cost of EVs is largely determined by battery costs. These are falling rapidly due to volume production (for both vehicle and electricity network applications).
    BMW have claimed that their electrified models will be cost comparable to purchase (in Germany) with equivalent ICE models by 2020. Australia will lag until EV volumes here climb to levels more nearly comparable to ICE models.

New technologies are not taken up linearly. After an initial period of slow adoption, take-up tends to accelerate until the market approaches saturation.

What’s more this process (the S-curve) itself is accelerating. Figure 1 illustrates the extent to which the rate of take-up of new technologies in the USA has increased over the last century.

Since 1975 many new technologies have moved from less than 10% of households to over 70% in not much more than a decade.

consumption speads - EV - jack story

In figure 2 we have modelled several scenarios of how the EV share of new vehicle sales might take off using these assumption with both an early and late take-off date and a high and low ramp-up in take-up rate.

SGS economics - EV story copy

Applying these rates to the turnover of the light vehicle fleet we estimate that EVs will be the majority of vehicles in Australia sometime between 2032 and 2039.

fig 3 -EV share- jack story copy

For comparison we show the BZE model and ENA Network Transformation Roadmap projection.

A transition to largely electric transport would have massive implications for our economy, carbon emissions and the planning of our electricity system so it is worth having the most accurate predictions we can.

The advantages to Australia of replacing most of our fossil fuelled cars with EVs are numerous and substantial; increased energy security, improved balance of trade, reduced air pollution and a major contribution to reducing our greenhouse gas emissions.

For vehicle owners EVs offer a major reduction in running costs, lower repair costs and longer vehicle life, as well as quieter and higher performance driving.

One benefit of a transition which is consistently underestimated is the role that EVs could play in supporting a smarter, more versatile electricity grid. Next generation EVs will typically have 40-60 kWh of storage, around four times the capacity of the Tesla Powerwall 2 currently being installed in conjunction with solar PV.

If most of the 18m vehicles in Australia were electric this would equate to 900 GWh of storage, of which as much as half could be made ‘accessible’.

That is 3,500 times bigger than the Tesla battery to be installed in South Australia and about what might be required for a 100% renewable grid. Read story here

Of course batteries in EVs will not be available for grid support 24/7 but they have the potential to be connected to the grid for 16-20 hours a day at either base or destination.

Most will have spare capacity on most days.

With the right control software and financial incentives they could provide services including catering to peak demand and providing fast response ancillary services without compromising the customer requirement for reliable re-charging and adequate range when needed.

We do believe a transition to predominantly electric transport is inevitable in the next few decades. However there is much that can be done to speed this transition.

This will both bring earlier economic and environmental benefits, and maximise the overall benefit to Australia. A slower transition will mean that we are largely importers of technology developed overseas.

A proactive approach can make sure we add value locally and perhaps even develop new export industries in battery and vehicle manufacture.

Policy action to support the EV transition does not need to involve costly vehicle subsidies. Maximum benefit for government investment can be achieved by supportive policies such as:

  • providing government and private fleet operators with information about the total cost of ownership benefits of EVs, particularly in urban and high mileage applications
  • coordinating bulk purchase of EVs across multiple fleets as a way of reducing costs and encouraging manufactures to make models available in the Australian market
  • facilitating the development of public fast-charging networks
  • changing electricity market rules to provide incentives for grid-connected EV infrastructure to provide energy storage and network services.

Clive Attwater is a Director of SGS Economics & Planning. Jack Gilding is the Executive Officer of the Tasmanian Renewable Energy Alliance. They are members of the Tasmanian branch of the Australian Electric Vehicle Association. Phil Harrington is Managing Director of Strategy. Policy. Research. Pty Ltd.  

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  • George Darroch

    The problem isn’t the technology, it’s the manu-tailers who have too much invested in their other platforms to want to even sell it to consumers. Look at GM-Holden, who won’t even offer their Bolt (Volt? stupid naming system) for the Australian market.

    It will take a few disruptive manufacturers pushing into the market to hasten adoption.

    • reecho

      The Bolt and Volt are only made in LHD at the moment…Stupid decision from GM…

      • MaxG

        Why do buyers not punish these manufacturers by never buying from them again?

  • DugS

    The slowing influence of the incumbent fossil fuel industry should not be underestimated. They are politically well connected, extraordinarily wealthy, and looking down the barrel of an existential threat, so to think they will just roll over meekly is foolish. The key to limiting their influence will be courageous politicians prepared to stand up to the FF lobby and introduce a price on carbon. Once their product is costed to reflect the cost of the damage to the environment then the gig will be up.

  • Rob

    Lots of public fast-chargers are needed so that anyone who wants to buy an EV knows they will always be able to re-charge it when necessary, especially people who don’t have off-street parking and home charging available. Putting fast chargers in existing petrol service stations seems the most logical start to rolling out a fast-charging network given the absence of an Australian version of FastNed. Most service stations could probably fit at least one fast-charger on their lot, if not more. Secondly a better range of EVs to choose from including innovative approaches like the Renault Twizy for short urban trips. And finally perhaps some sort of government subsidy for EV buyers to reduce the purchase cost, until economies of scale and advances in battery technology etc bring the cost down naturally.

    • Michael Dufty

      The public chargers will become a problem eventually, but you can’t blame it for the current state of things. I reckon about 50% of cars in citys would never need to be charged away from home, and a negligible number of those are currently EVs. I think cost is the biggest barrier, once that is fixed the numbers will start rising and charging infrastructure will be practical before the other 50% need to be converted to EV.

  • Robert Comerford

    For a PHEV, the range extender should be a flex fuel type that can run on a range of non fossil fuels as well as fossil fuels. This really is the only type of car we should be offered now apart from a pure EV. It is not a future dream the technology already exists.

  • Trevor Beal

    I AM ALL FOR EVs BUT HOW CAN AN AGED PERSON ON A GOVT. PENSION AFFORD TO BUY ONE WHEN THIER FOSSIL FUELED CAR IS BANNED

    • Craig Allen

      Existing fossil fuelled cars will not be banned any time soon if ever. The purchase of new fossil fueled cars however will be discouraged (or people just won’t want to buy them).

      Making comments in all caps will probably become a capital offence much sooner however.

      • Trevor Beal

        Good one Craig !!

      • Joe

        Er…a cash for clunkers type scheme to buy EV’s could help people like Trevor to change over.

  • Hettie

    Solar powered charging stations in outside, single level carparks would seem to be a promising possibility. The solar panels shade the cars, and are paid for by the cars that charge there. No need for high speed chargers. Work places, shopping centres, clubs, all places where people park and do their stuff that takes an hour, or several.

  • Ian

    We are all waiting with bated breath for the manufacturing capacity of EV batteries to be expanded. The rest is easy-peasy. At the next climate summit there should be only one item on the agenda – rolling out battery manufacturing. We need the equivalent of 200 gigafactories, we will have the equivalent of between 2 and 5 by 2020 – not really enough. 5 GF’s by 2020 represents 2.5 million cars out of 100 million cars that’s 2.5% of new motor vehicle sales. Our country could support 2 GF’s. The USA market is 20 million light vehicles a year . Musk’s gigafactory will only supply enough batteries for 1/40 of their market – not much left for us.

    The thing about battery manufacturing is that it does not need to be initiated on such a big factory as Tesla’s effort and it is scalable.

    • Joe

      With the car makers Holden and Ford packing up we have the factory space available to build EV’s. Premier Jay could again don ‘The Leader’ hat , have a quiet word with his bestie,The Elon, and build Tesla Cars in SA. And while they are at it build a Battery Factory to build car batteries, home storage batteries and more those ‘Big Batteries’ to support The Energy Grid. C’mon Premier Jay, you are The Man!

  • EVs need to be visible in a uniform way. Like a blue stripe means Low Salt at the supermarket. Then users will flash at each other in bretherance. Like when Renault’s 16 came out; funny shape but plenty flashing.

    • Mike Westerman

      LOL…as a proud owner of at least 4 R16’s I know what you mean! I’ll remember this when I get my T3.

  • Radbug

    I’m an Age Pensioner. I travel 5,000 km per year in my car. My car was built in 2003 and is effectively still “as new”. I’d like to buy an Li-S Vespa, because of the absence of noise, but I don’t see why I should buy an EV, given my financial circumstances and how well my present car is functioning … and there are an awful lot of Age Pensioners, just like me, who look after their ICE cars very carefully indeed.

  • Great article guys, keep them coming!