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Australia is being warned that it is in danger of missing out on enormous economic and social benefits if it continues to dawdle over initiatives that could support the rollout of electric vehicles, and the creation of significant manufacturing and technology industries.
Over the past two days in Adelaide, leading industrialists, analysts, industry players and some forward-looking politicians have spoken of the huge opportunities in the transition to EVs, which will reshape not just the choice of cars, but also transport and energy infrastructure.
In a speech to the Renewable Cities conference, independent Senator Tim Storer gave an outstanding speech about how and why Australia should “play its way back” into the biggest transformation in transport since the advent of the internal combustion engine.
Storer says Australia is missing out on the $90 billion already invested in electric car manufacturing, but the opportunities – and what it may miss out on in the future as well – were much broader and more significant.
“We by no means fully understand the extent to which this revolution will transform the way we live our lives,” he said.
“The danger is that without action, Australia will be left behind in yet another round of global disruption – we will again be held hostage to international developments, rather than reaping the benefits of helping to engineer the change.”
Other politicians have also been awake to the possibilities of EV, and the innovation opportunities that it might bring with it. Prime minister Malcolm Turnbull is one, but nothing has happened since.
Storer has urged South Australia, for instance, to learn from Tesla’s example in California, where the EV and storage company took over an old GM and Toyota factory to build its Model S electric vehicle.
“Tesla’s success in establishing its manufacturing plant in California has proven what’s possible.
“It’s less than a year since Holden ceased its operations at its Elizabeth plant, meaning that much of the skilled workforce is still around, as is the site.”
Storer said Adelaide is also the perfect testing ground for new EV technologies and business models, given its high rooftop solar penetration, a world class university sector, a highly skilled labour force, and a sizable population.
“It’s not necessarily about convincing Toyota or GM to come back here; it’s about convincing the next EV start-up to choose Australia as its launch pad to pioneer disruptive innovations that match our natural strengths and competitive advantages.”
UK billionaire Sanjeev Gupta has proposed to do something along those lines, and vowed to establish – within three years – an EV manufacturing plant producing low-cost, lightweight vehicles being developed by Formula 1 designed Gordon Murray.
However, Gupta has not made it clear whether any such factory will be in South Australia, Victoria (the other big former home of car manufacturing in Australia), or elsewhere.
On Wednesday, Gupta lamented the fact that Australia could miss out on the manufacturing opportunities given its unique resources that cover just about everything needed for a battery manufacturing industry.
Manufacturing has been dying a slow death in Australia due to a multitude of reasons, but Gupta says it can be revived if it can develop more cheap solar power, and has outlined plans to build up to 10GW of large-scale solar to support that.
The same opportunity is seen in a $20 billion proposal by CWP renewables and Vestas to build up to 9GW of wind and solar in the Pilbara, partly to supply cheap renewable power to south-east Asia, but also to create an industrial hub in the north west.
There is talk of lithium processing hubs emerging elsewhere in Western Australia, at Kwinana south of Perth, and Business News reported on Thursday of suggestions that Wesfarmers was looking to get into the battery manufacturing business.
So-called gigafactories have also been discussed for Townsville, led by ex Macquarie Banker Bill Moss, and for Darwin.
Storer wants to look into the possibilities of EV manufacturing and associated industries.
“We, perhaps more than any other country on earth, have all the right ingredients to be an EV manufacturing powerhouse.
“We essentially have all the natural and human resources needed to build an electric vehicle, from the lithium, cobalt, nickel, and graphite that goes into the batteries, to the steel, aluminium and plastics that go into the chassis and bodies.
“We also have the highly trained engineers and computer scientists to build the machines that will build the cars and the software that will operate them. All this offers the promise of vertical integration within a comparatively stable political environment.”
PwC earlier this year released a report outlining the significant economic benefits of EVs in Australia. This chart above highlights just a few of them.
As report author Mark Thomson told the Renewable Cities conference on Thursday, the EV transition will be one of the only major industry transitions that could deliver a boost to jobs rather than a reduction.
Another good reason to engage is Australia’s perilous reliance on imported transport fuels, which could see consumers run out of fuel for transport within a couple of weeks of any supply disruption in, for instance, the South China Sea.
Storer noted that the EV uptake in Australia had been disappointing, equivalent to just 0.2 per cent of total sales last year, and with few EV models available in Australia.
“We are lagging 5-10 years behind the rest of the developed world,” he said.
He proposed a range of initiatives including tax concessions for companies that establish EV or EV component manufacturing in Australia; support for EV start-ups, and the introduction of long-awaited fuel efficiency standards for light vehicles.
Sadly, this issue threatens to explode into another divide between the right wing of politics and the rest, as some form of “carbon tax” on cars.
Storer also proposed exempting EVs from the luxury car tax; working with state and local governments to coordinate and expand the roll out of charging infrastructure; and waiving of vehicle registration and stamp duties, along with free parking and use of bus lanes.
“It’s also time for government take the lead in driving EV uptake through aggressive fleet purchasing policies, and to provide incentives for business to do likewise,” he said.
You can read Storer’s speech below. We’re publishing it in full, because it’s not often you get a federal politician thinking coherently about the future.
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