Australia starts slow on EVs, but could overtake global market

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BNEF says EV sales in Australia have started slowly but will finish quick and will beat the global average by 2040, after passing tipping points on affordability in 2025. More intriguingly, the EV fleet will create a “behind the motor” storage market as big as Snowy 2.0.

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Bloomberg New Energy Finance predicts Australia’s slow start to the uptake of electric vehicles will quickly morph into a “fast finish” – particularly after the key financial tipping point is reached in 2025.

In the release of Australia-specific forecasts to add to its global predictions released last month, BNEF analysts say that by 2040, some 40 per cent of all vehicles on the road in Australia will have a plug, and 60 per cent of new car sales will be electric.

This will have benefits – lower cost to consumes, cleaner air, fewer emissions and less dependence on fuel imports. In fact, it predicts Australia will reach “peak oil demand” by around 2029 because of the impact of EVs.

It will have other implications – adding 11 per cent to electricity demand by 2040, but offering huge flexibility to a renewables-dominated grid.

And it will provide a large reservoir of storage  – 350GWh – “behind the motor,” around the same size as the massive Snowy 2.0 pumped hydro proposal.

BNEF says the reasons for Australia’s slow start are clear – the availability of only a few (very expensive) EV models, and a lack of infrastructure.

Australia also does not have the government support enjoyed in other countries. In Australia, there is no EV target, no vehicle emissions target, no up-front purchase incentives, and little support from government for infrastructure.

Despite these hurdles, BNEF says interest is growing in the early adopter space. And as more models become available, and the issues around “range” are addressed, and costs come down, that will change rapidly.

Australia has trailed the world in the uptake of EVs, with only 0.2 per cent of sales going to EVs or plug-ins, but BNEF expects that sales will total 2,400 in 2018, accelerating to 27,000 in calendar 2022.

After that, and as tipping points approach and are passed, sales will jump to 6 per cent of all car sales (Australia sells about 1.2 million cars a year) by 2025, and then 28 per cent by 2030, although it warns that infrastructure could be a restraint.

By the time it gets to the early 2030s, Australia will have caught up to its global peers, and by 2040, Australia will have overtaken the global average of 55 per cent of new car sales and 33 per cent of the total fleet.

Australia will stand at around 60 per cent of new sales and 40 per cent of total fleet, in line with the EU, China and the US. This forecast is higher than BNEF’s estimate released in September 2017, when it predicted a sales rate of 45 per cent of the total market by 2045.

“We see a pick up in sales in 2019 and 2020 when mass market electric vehicles start entering the market and government fleets start buying electric vehicles,” says Ali Asghar, BNEF’s Australia based specialist in electric vehicles.

“Once EVs start to become cheaper and get a cost advantage over ICE cars, and when consumers start to find more value in EVs, we will see more of an exponential uptake.

“The only thing that is stopping it is network infrastructure constraints,” this includes the availability of charging network and access, for instance, for those living in multi-dwelling habitations.

Most of the EV market in Australia will in be medium-sized cars and SUV vehicles.

The implications for the energy sector are going to be fascinating. While a 40 per cent share, the fleet of EVs will add around 11 per cent to annual demand, although this will actually be dwarfed by the increased uptake of rooftop solar – which will be used by many to charge the vehicles

“This (amount of storage) is equivalent to Snowy 2.0,” says Asghar, ”and eight times the size of the stationary storage market.

“There will be a considerable amount of reserve ‘behind the motor’ – an exceptional opportunity for aggregators to come up with a model for consumers.”

And because households will not have to rely on the sort of prices that diesel or gas plants need to survive, they will happily sell in the peak to a lot less than the current $14,000/MWh peak.

“That’s bad news for a lot of peaking generators in the market,” Asghar says.

And there are other implications too. “Peak” oil demand could be reached in 2029, with 100,000 barrels of oil displaced – even earlier, with added efficiency improvements in petrol and diesel cars.

Another implication is the impact on government revenues earned through the fuel excises of between 35c-40c/litre.

That will be slow at the start, but by 2040 it could amount to $5.5 billion a year, meaning some form of substitute, possible a road use charge, may need to be introduced.

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62 Comments
  1. Joe 5 months ago

    ‘Peak Oil Pain’ may just encourage a few ICE lovers to go EV. I see the boards showing fuel prices at $1.55 – $1.60 per litre at my local servos and the whingeling is starting again.

    • Rod 5 months ago

      20 years ago we were talking peak oil (supply) This peak oil is (demand) which, if it eventuates, mean lots of oil left in the ground and lots of stranded assets.
      If the Saudis turn the taps back on, expect fuel to head lower.

      • Shilo 5 months ago

        According to most the worlds experts, the world reached peak oil, every 5 years, from around 1990.
        Imagine if the world took away all the taxes on oil, imagine comparing a diesel car then.
        But we would run out of oil very quickly, so it is best that cars are headed back to the way they first started as battery/electric.

        • Rod 5 months ago

          We may have actually reached peak oil supply by now but for the advent of fracking.
          Agreed, remove the 5 trillion in fossil fuel subsidies per year and EVs will be on a financial level playing field.

          • Ian 5 months ago

            “$5trillion in fossil fuel subsidies per year” is that a rigorous figure? Certainly world investment in oil is about $500 billion a year.

            Using the Gigafactory as a benchmark: $5billion to construct, designed to produce batteries for 500 000 EV . The world registers 100million new cars a year , so at a minimum, 200 gigafactory -equivalents are needed. That is only $1 trillion for a one-time investment. As EVs become more successful and commonplace, that investment appetite will shift from oil to the EV production chain . Peak oil demand, EV disruption and then game over concerning burning this fossil fuel.

            Australia needs the output of 2 ‘gigafactories’ to cover its new cars’ demand. That is only about $10 billion investment – well within our capabilities.

        • Gyrogordini 5 months ago

          Actually, I recall that “peak oil” was around 2006, and then the Americans got fracking, and the Canadians started cutting down their arboreal forest. We now know that most of what’s left should stay in the ground, but it won’t, and we will all pay the price.
          NYT published recently that there are $33Bn of subsidies and support for fossil fuels, and the ICE manufacturers are building like there’s no tomorrow (oh, hang on…)

      • Joe 5 months ago

        The predicted ( in the past ) time of peak oil supply seems to always drift further into the future as Big Oil manages to keep drilling more of the ‘Black Gold’. Oil is a finite item so peak oil supply has to arrive eventually. All the ‘Easy Oil’ has been found but its not stopping the drillers as they go deeper still into the ocean depths, or try new frontiers like The Arctic and The Great Australian Bight….the oil bastards are relentless, yes.

        • Rod 5 months ago

          Yes, that is the point many miss. There will always be oil but at some stage the cost of extraction exceeds the amount people will pay.
          Fracking is a stop gap and by all accounts fracked fields decay at a much greater rate.
          With RE taking more and more diesel generation, oil for heating reducing and EVs and AVs, financiers must be thinking twice before green lighting large projects.
          Can’t do much about the Ruskies sending nuke plants on ships into the Arctic to drill though.

          • Shilo 5 months ago

            I would have thought the ships the Ruskies would use would have a few wind turbines,solar panels and heaps of battery’s. Why would they use nuke power, when RE are so much cheaper.

          • Rod 5 months ago

            Why would your hero tRump need to subsidise coal and unclear energy if they are so cheap.

          • Shilo 5 months ago

            I was serious.
            If you wanted to drill in the Artic. A Ship with the whole RE set up, has to be a serious option.
            The winds are almost constant and very strong.
            Trump and the US in general have subidised almost everything for years. Almost all countrys do.
            Weather its food, cars, solar pannels, ships, Aluminium, everything gets huge amounts of feel will. Even Banks, they get piled with money, so they can lend more.

          • Rod 5 months ago

            “I was serious.” Hard to tell, sometimes.
            It looks like it will also be powering towns. I don’t think ship based wind and solar generation is feasible on this scale.

            http://www.thedrive.com/the-war-zone/20564/heres-what-we-know-about-russias-new-floating-nuclear-power-plant-heading-to-the-arctic

          • Shilo 5 months ago

            No that ship is doing more than just drilling for Oil or gas.
            I wonder what happens when something goes wrong with a ship like that and the reactor ends up in the water.
            Maybe one already has.

          • Greg Hudson 5 months ago

            There are heaps of other nuclear powered vessels lurking about… Subs, Aircraft carriers, Ice breakers, satellites and probably more. Worrying about one ship is a waste of time.

          • Hettie 5 months ago

            Worrying about anything is a waste of time unless it takes the form of working out solutions.

          • Joe 5 months ago

            I was going to say that I hope the Russ and their Nu Clear fleet all sink but then the radioactive muck would be sprinkled through the ocean. Oil spills or Radioactive muck spills…we lose, lose.

          • Rod 5 months ago

            Doesn’t seem to worry them when their unclear powered subs sink.

  2. Thucydides 5 months ago

    Australian governments and their agencies are the largest purchasers of motor vehicles in Australia. All it would take for the industry to take off is for other states to follow the lead of the ACT government which is transitioning its vehicle fleet to electric vehicles by 2022.

  3. Askgerbil Now 5 months ago

    Electric vehicles may not be so hard to sell.
    Their value depends on how you use them. in the UK “electric car owners will be paid for letting an energy company use their vehicle’s battery in a pioneering scheme to increase take-up of the cleaner vehicles and help power grids manage the growth in green energy.”
    https://twitter.com/Askgerbil/status/1007290387352858628

    • Gyrogordini 5 months ago

      Interesting, but There is a problem, however. Most EVs do not have bi-directional on-board charger/inverters. Nissan and Mitsubishi were apparently requested to explore V2G after Fukushima, using the CHAdeMO DC connector. Most other EVs only pull energy, and would need significant reengineering to be able to push it.

      • Hettie 5 months ago

        Well! There’s a marketing advantage for companies ready to grab it. Savvy buyers would be happy to pay a bit more for a car that can keep their house lights on in the dark hours, be charged at work, or on weekends.

      • Ray Miller 5 months ago

        I disagree, all that is needed is an external matched (to the make of car battery voltage) inverter and connecting cable standard.

        A number of existing devices even manufactured in Australia, which are called interactive inverters (bi- directional) which are both a battery charger and inverter, controlling the flow of energy in both directions.

        The electronics is mature, reliable and field tested in many extreme remote Australian locations. The level of power does not need to be more than a couple of kW’s to be useful. Selelectronic is one such manufacture, the devices are not small or cheap but as we all know when scaled up prices come down. http://www.selectronic.com.au/sppro/
        This certainly is on area worth exploring and maybe an Australian opportunity? If only we had a government with a gram of wisdom and vision.

  4. Brunel 5 months ago

    No mention of hybrid cars?

    Hybrid cars are a great way to slash oil imports – if you can drive 24 km without using a single drop of petrol, that is a massive step in the right direction.

    The only subsidies should be for electric buses not handouts to those who can afford a $100k electric car.

    • Peter Campbell 5 months ago

      Important to make the distinction between plug-in series hybrids (eg. Holden Volt, Mitsubishi Outlander), proper electric cars with an on-board range extension engine that might be used infrequently, and non-plug-in hybrids that have a small electric motor and very small battery to supplement what is mainly a petrol car (eg. Prius).

    • Gyrogordini 5 months ago

      1. Hybrids (HEV) without a plug are a very soft substitute for a full Battery EV. They DO make a difference, but it is barely worth it due to their inherent complexity over a BEV. Many HEV (like Prii) have pathetic EV capabilities, although they do exhibit reliability and long term economy around 4-5 l/100 km, which is a vast improvement on the standard, contemporary Aussie-bought tank.
      2. Plug in HEV go a long way toward the transition, where you can start each day with 30-50 km of EV “in your tank”. The Mitsubishi Outlander is an excellent example (and it can have a tow bar, as well).
      3. The “$100k EV” line is pretty tired. The true mark is $40-60k, which is well matched to the price of the majority of privately-purchased ICE. This is where there will be tremendous changes in the next three years. They don’t need subsidies (middle class welfare) – they need charging infrastructure and leadership from our copious number of governments (like the ACT).

    • Simon Jowett 5 months ago

      I’ve driven a hybrid for years and while they are good they are very complex and as another commenters have made the point they are only good if they can plug in and charge. In California/USA hybrid sales are flat/down whilst EV are dramatically up. Wherever, Au gets EV choices the same will happen here.

  5. Peter 5 months ago

    I installed solar PV and purchased a Mitsubishi PHEV in mid 2014. My petrol purchases in 2013-4, the year before, were 1200L. In the four years since, I have purchased 452L (113 L per annum) costing $640 to travel 36,000 km or 1.26L/100km. The electrical energy purchased DID NOT CHANGE although the car was being charged because the harvested solar energy filled the gap. My estimate of additional electricity costs to charge the car, without solar PV, is about $2,280. And the cost of petrol in the old car I estimate would have been about $5,200. Putting in solar PV and purchasing an electric vehicle is worthwhile even now if you have to purchase a new car.

  6. Roadtripper 5 months ago

    I’d be very surprised if that happens given the backwards mentality of many commenters I come across.

    • MrMauricio 5 months ago

      and not just cars!!!

  7. Simon Jowett 5 months ago

    I still think the BNEF projections are soft. I think things will accelerate rapidly in the mid 20’s when EV’s are cheaper to buy than fossils. By 2030 I predict very few fossil sales.

  8. john 5 months ago

    Considering Australia has shown the fastest uptake of any new technology it is surprising they have not embraces Electric Vehicles.
    The fact they are not available may point out why.
    It seems that country is one of the most urban concentrated in the world it seems a vehicle that would be capable of doing 300 kms per charge would suit easily.
    They probably do maximum trip commuting at a stretch 80 km per day.
    3 to 5 times a year they do a trip over 500 km maximum.
    As to the 15% plus that are not urban it is only a short while until a vehicle will suit them.

    • Peter Campbell 5 months ago

      Many households have two cars. Only one ever leaves town. The town car can be an EV of modest range and preferred for all trips except out-of-town trips. The old ICE car will last longer until a long range EV can replace it.
      We have a pure battery electric car (2012 Mitsubishi iMiEV) and a plug-in series hybrid (2014 Holden Volt). All local driving in either vehicle is 100% electric. We only use petrol on occasional longer trips out of town.

    • Simon Jowett 5 months ago

      I still have conversations with people (Suburbanites) who insist they must be able to drive to Darwin (from Sydney) at the ‘drop of a hat’……”And that’s not possible with EV’s is it?” No amount of logic works with some people….There will be a lot of late adopters but I’m not going to be one of them!

  9. Peter Campbell 5 months ago

    Why would anyone, let alone 40%, buy an ICE car in 2040? Plug-in series hybrid, perhaps. Once you have driven an EV, you don’t enjoy ICE cars.

    • Gyrogordini 5 months ago

      “Don’t enjoy ICE…”
      Wrong, PC, “barely put up with ICE, and then only when forced!”

  10. Hettie 5 months ago

    None of the media commentators is factoring in the likely effect of a change of government.
    Wot if a Labor Government mandates that all new fed cars are EVs? If new State Labor Gov’ts do the same? Instant investment in charging infrastructure.
    Wot if Labor says no new ICE vehicles after 2030?
    Most cars are dead after 10 or so years, so that would mean a great many new purchases would be EV long before 2030, as no one would want to be stuck with a virtually unsalable ICE car.
    Wot if fuel excise is replaced by a weight times kms levy assessed at the annual registration and payable in weekly or fortnightly installments, wit an end of rego year adjustment like the tax return?
    Wot if Tony Seba is right?
    Wotif the coalition troglodytes have a mass apoplexy?
    How good would that be?

    • Gyrogordini 5 months ago

      All good IMHO

  11. Robin_Harrison 5 months ago

    Remarkably linear growth predictions, particularly considering the likelihood of price parity by 2025. China will probably be exporting EVs prodigiously by then and Oz will be a prime target.

  12. Troy Sheppard 5 months ago

    Hopefully with a change of the federal government at the next election we may see some incentives introduced for hybrid and electric vehicles. higher emission regulations on vehicles would also help

  13. Eric 5 months ago

    Lol. This is completely ridiculous. The transformation of the entire vehicle fleet will happen within ten years. The reality is that EV’s cost of ownership will be well under ICEV in a couple of years and that will drive a very very quick shift. Australia deosn’t have to do much the rest of the world will do it for us.

    • Marcelo 5 months ago

      I tend to agree. The graph at the top of the article only reads massive environmental disaster. Unacceptable to all, even if they don’t know it yet.

    • Simon Jowett 5 months ago

      For new sales I hope (and agree) you are right but, as we have a average vehicle life currently at 10.1 years (ABS source), it will take some time for the whole fleet to change. I also predict lower fossil fuel prices as demand drops which could put a crimp on EV running cost savings and make the last ICE vehicles slow to die!

      • Eric 5 months ago

        There is a limit to how far fossil can drop because of the fixed costs of extraction refining and transport, the less fuel that is sold the more those costs increase per litre of fuel.
        Also, as more cars become electric the economics of retailing fuel decline, meaning fewer bowsers, meaning more hassle in finding refueling points, meaning more people switching to EV.
        It is probable that by 2025 even in Australia there will be financial incentives for EV’s and higher taxes on ICEV’s.
        And finally there will also be a social change in sentiment towards EV’s around 2022-25 in Australia and a sense that ICE vehicles are dirty horrible noisy things. This will come about because of main stream advertising of EV’s and more affordable choices- It will be the Iphone moment for EV’s, everyone will want one.
        Complete transformation within ten-fifteen years max in Australia.

  14. Ian 5 months ago

    An average ICE sedan would have a fuel consumption of 7 to 10 L/100 km say 7L/100km at $1.60/L = $11.20/100km. A BEV has a consumption of 15kWh/100km tariff 11electricity is about 28c/kWh = $4.20/100km

    Nissan Leaf acenta £25190 in the UK ,40kWh battery,
    Nissan Qashqai acenta £21685
    Nissan Juke acenta £17100
    Nissan Pulsar acenta £ 16280

    The juke or the pulsar are probably the most equivalent to the leaf so the premium price of the battery car is about £8000 or Au$14 200. Not counting servicing, breakeven km is 200 000km. Price of the battery pack AU$355/kWh

    Wholesale prices of batteries should be between US$200 to 150 /kWh or even less by now in Au$ 270 to 200/kWh a 40kWh battery pack should cost Au$10400 – 8000. Electricity from a home solar system, or from the free chargers would cost nothing. For this scenario $8000 battery price premium zero charge cost: Breakeven is 71 000km for average travel of 15500km/y 4 1/2 years break even

    V2G may allow the EV to participate in time-shifting rooftop solar to evening demand say 10kWh a day . This may save $1000 a year in electricity bills . Compare this to the fuel bill saved by the car of $1700 a year.

    The economics of BEV are difficult to achieve but V2G can make a substantial difference. You wouldn’t get that with a hybrid vehicle

    The difference in price between an EV and the equivalent ICE car has got to improve before people on a strict budget can afford the switch.

    • Eric 5 months ago

      You are not taking into account the huge shift that will occur with self driving technology. Self driving cars will be on the roads in cities in big numbers in about 5 years, they will all be EV’s. The cost of EV’s will fall like a stone in a few years once factories have scaled up world wide. EV’s are easier to make at scale than ICEV. It will be a very quick and highly disruptive transformation that many people are not prepared for.

      • Ian 5 months ago

        No doubt you are right. Just talking about the here and now. The EV snowball is small and difficult to push to the top of the slope, but once it’s let loose then ,sure, there’s no stopping it and there is no limit to the size it would grow. Battery price is the hump in the graph, our government is not doing anything to help the initial heavy lifting. My calcs were just estimating how much more expensive a typical EV like the Nissan Leaf is than a similar ICE vehicle. A manufacturer which is not willing to sell the vehicle with the battery component kept at wholesale price, will probably not do very well in this country. V2G or V2V capability can allow the battery to do more useful functions and while not reducing the price of the vehicle, can allow savings in other ways. Ie giving more value to the vehicle.

        Once prices of EV drop like a stone, as you say, then self-driving, V2G,V2V, free charging, parking privileges, and other incentives will become quite unnecessary. The timing of this disruption will be slow if no effort is made to accelerate the EV supply train.

        • Eric 5 months ago

          The scaleup will be very quick. By 2021/22 virtually no luxury ICE vehicles will be sold in Europe. By 2025 90 % of all new vehicles sold of any description in Europe will be pure BEV.
          Australia and the US will follow 3-5 years later.

    • Hettie 5 months ago

      Don’t forget you have based your calculations on the best fuel economy for ICE vehicles.
      Try again using the mid point, 8.5 l/100 km.

  15. Nick Kemp 5 months ago

    Naturally the Guv will want to charge a mileage levy because they will be losing out big time on the fuel tax – I wonder if they will take this into account

    Air pollution from cars and vans racks up health bills of nearly £6bn every year in the UK, according to a new report by researchers at the universities of Oxford and Bath.

    They will naturally attempt to pocket the gains and charge a bogus tax – we should resist this because it becomes another drag on the BEV invasion

    Full Artice
    https://www.independent.co.uk/environment/cars-air-pollution-cost-nhs-vans-vehicles-health-bills-lung-disease-a8384806.html

    • Hettie 5 months ago

      There is also the dirt. The cost of cleaning windows and buildings generally in cities is huge, as is the erosion damage to masonry caused by the acids in smog.
      Just imagine the pleasure of the clean air once all energy is renewable and all vehicles are EVs. And the reduction in noise levels. Such a shame I’ll probably be dead by the time that happens. Perhaps not.

      • Warwick Sands 5 months ago

        One of the major complaints about vehicular tunnels is the exhaust stacks to clear the tunnel. Having mainly EVs should negate the objection.

        • Hettie 5 months ago

          What a good point!

  16. Carl Raymond S 5 months ago

    If the transition really does happen as slowly as that chart forecasts, we’ll be embarrassingly behind other first world nations. Visitors stepping out of airports onto vibrating noisy diesel buses will feel like they’ve flown through a time warp, back to the fossil fuel era.
    Surely somebody with a little vision will step into Frydenberg’s shoes and the pace will quicken.

  17. Ralph Buttigieg 5 months ago

    Thank you Giles for providing further evidence that we dont need emission restrictions , a “carbon tax on wheels” to transition to EVs.

    • Simon Jowett 5 months ago

      Given that emissions from vehicles prematurely kill humans (for example see this estimate of 500,000/yr in the EU http://fortune.com/2015/11/30/diesel-emissions-deaths-europe-ee/ ) we need way more restrictions and we needed them yesterday!

      • Ralph Buttigieg 5 months ago

        Australia is not the EU.

        • Simon Jowett 5 months ago

          Correct – and at the same time completely irrelevant.

  18. Ken Dyer 5 months ago

    here is the latest map of charge points in Australia – growing fast!

    https://myelectriccar.com.au/charge-stations-in-australia/

  19. Robert Comerford 5 months ago

    It would be nice to see a rapid transition away from fossil fueled private cars but it all looks like wishful thinking still.

    A mandate that real hybrids ( with plugs) must be flexfuel capable and petrol stations should have at least one pump that delivers a renewable liquid fuel would go a long way to removing the use of Jihad Juice and provide a dent in the CO2 emissions from personal transport until everyone can afford a battery-only vehicle with needed range.

    • Ian 5 months ago

      Jihad juice. Very nicely put.

      Oil is good for dictatorships. To misquote Abbott;)

  20. RobertO 5 months ago

    Hi All, Australia has most of the minerals need for making any part of a car, from batteries to electric motors to bodies, yet we do almost nothing to employ Australian workers other that to export (almost like exporting jobs). Where is the leadership of this country going. If Chile can mandate laws to make manufactures process minerals in their country, why can Australia do the same. Call it a Value Add Service Fee of say $2.00 per ton (or part thereof) leaving the country for any mineral leaving the country that not in it’s final VDS state. Example Coal (no processing therefore fee applies) Copper Ingots (Fee) but Copper Building Wire (Exempt), Iron Ore (Fee), Steel ingots (Fee), but Steel Rails (Exempt) Rolls of Steel for Roofing (Fee) but Steel Roofing Sheets (Exempt).

    The Fed Gov need to lead Australia, not export it!

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