Electric vehicle policy support “urgent”, as sales inch up in 2017

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Australian electric vehicle sales jumped 67% in 2017 – but off an embarrassingly low base. New report calls for urgent policy support for EV uptake, as Australia continues to fall behind the rest of the world.

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Australia’s Turnbull government is facing mounting pressure to bring its electric vehicle policy into the 21st century, with the release of one major new report – and the leaking of another – confirming that policy support is critical to a shift to EVs.

The first report, published by ClimateWorks and the Electric Vehicle Council on Friday, says that Australia remains a global laggard on EV uptake, despite significant growth in sales in 2017.

As the report notes, that growth – a 67 per cent increase on 2016 EV sales – looks impressive, but comes off an embarrassingly low base.

According to ClimateWorks, there were 2,284 electric vehicles sold in Australia in 2017, compared to just 1,369 the previous year – which was a good 400 less than the 1,771 plug-ins sold in 2015 (see chart below).

The report notes that the small bounce-back in electric vehicle sales in 2017 was most likely linked with an increase in models available for sale of 44 per cent from 2016 to 2017 – again, coming from a very low base.

As we reported here, Australia currently has just five pure electric vehicles available to consumers, more than half of which – including the Tesla Model S and X – are priced in the prestige car range.

That is improving – slowly. According to the ClimateWorks report, another nine new plug-in hybrid and battery electric vehicle models are expected to be introduced in the Australian market over the next 18 months – five of which should be priced at $60,000 or less.

Meanwhile, in the rest of the world, major automakers in China, the US and and Europe are weekly announcing new electric car models, with more than a few, like Volvo, setting targets to phase out the manufacture of internal combustion engine cars entirely.

And many more governments are setting similar targets, pushing for all sales of new vehicles in their countries to be plug-in cars by 2025 and 2040, and rolling out strong policy settings and incentives to support this shift.

Bloomberg New Energy Finance has projected that a cumulative total of 530 million electric cars will be sold by 2040, and the International Energy Agency has more than doubled its previous estimates on global EV sales, the report notes.

Even the Organization of the Petroleum Exporting Countries (OPEC) has increased its forecast for EV sales by 500 per cent compared to last year; while oil majors Exxon, BP and Statoil are all now expecting at least 100 million EVs on the world’s roads between 2030 and 2035.

Behind all this lies the increasingly pressing need for the world to take decisive actions to meet the Paris climate target of limiting global warming to 1.5°C.

Next to energy, transport is one of the biggest contributors to greenhouse gas emissions, and switching to renewables powered electric vehicles is one of the most direct ways to cut man-made carbon emissions.

Currently, Australia stands virtually alone in the world for having no standard for light vehicle emissions, and no other federal government incentives to encourage consumers to buy cleaner cars.

The introduction of a standard of 105g/km to apply to all new vehicles sold in 2025 was last year aired by the Turnbull government, but has done little but provoke hysteria among car industry lobby groups and in the Coalition’s own far-right ranks.

“The slight growth in the Australian electric vehicle market demonstrates the need for urgent policy support by government,” said EV Council CEO Behyad Jafari in comments on Frday.

Jafari said that it was business that was currently any growth in EV sales in Australia, accounting for 63 per cent of sales in 2017, primarily made up of manufacturer fleets and dealer demonstrators.

Private buyers also made up a substantial portion of the market, he said, accounting for 34 per cent of sales – while EV sales in government fleets remained limited at only 3 per cent; a “missed opportunity,” Jafari said.

“Encouraging investment through lower priced electric vehicles and charging infrastructure requires certainty by governments that they’re serious about supporting the transition to electric vehicles,” he said.

“Australia has much to gain through improved public health, energy security and increased economic investment from the electric vehicle industry. While this has been recognised by developed countries around the world, Australia continues to fall behind.”

Backing this view are the findings of a leaked federal government report, which – according to Fairfax Media – also found that policy settings in Australia, particularly federally, lagged “well behind leading international jurisdictions”.

That report points to Norway as an example, which leads the world on EV uptake, thanks to a federal policy of requiring all new cars to be fully electric starting in 2025.

In its review of that market, the ARENA-CEFC reportedly found that financial incentives had the biggest influence on uptake, with other incentives like the use of transit lanes or reduced vehicle registration costs played a supporting role.

“Any increase in direct Australian financial incentives” for plug-in vehicle adoption would improve the range of models available and drive consumer demand, it said according to The Sydney Morning Herald, adding that policy settings in Australia, particularly federally, lagged “well behind leading international jurisdictions”.

The Australian Greens, who have been highly critical of the Coalition’s “absolutely pathetic” vision for EVs, said on Friday that the ClimateWorks report offers a fresh opportunity for Turnbull to listen to the evidence, and get the nation back on track.

“It’s staggering that the Turnbull government is burying its head in the sand while the rest of the world zips past us in their electric vehicles,” said Greens transport spokesperson, Janet Rice, on Friday.

“We know from other countries that the best way to encourage the uptake of electric vehicles is through government action, including financial incentives.

Earlier this year, the Greens laid out their own plan to kick-start the EV revolution, including a commitment to cut upfront costs by removing a number of taxes, levies and charges for zero emission vehicles.

“We have also pushed for the introduction of strong light vehicle emissions standards, an electric vehicle sales requirement for manufacturers selling vehicles in Australia and investment to boost to public fast charging infrastructure,” Rice said.

“Unless the Turnbull Government acts fast and introduces financial incentives for electric vehicles and legislates strong vehicle emissions standards, Australia will continue to be the global dumping ground for inefficient, polluting gas guzzlers while the rest of the world drives clean, efficient electric vehicles.”

Federal Labor, meanwhile, is said to be working on its own major policy on EVs heading into the coming federal election, although Labor climate spokesperson Mark Butler told Giles Parkinson this week that the party had yet to come to a landing point.

“I struggle to explain the reaction that some from the hard right in the Coalition give to developments in transport …. They tend … to grasp on to technology developments and see as them some sort of Leftist conspiracy,” Butler told RE.

“We’ve made it clear that we want an ambitious transport policy to take to the next federal election that recognises that the car industry has shifted … we want to make sure that consumers in Australia have access to new models.”

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19 Comments
  1. Andy Saunders 9 months ago

    Given that Australian new-car sales in March hit 107 thousand (for the month only), 2300 EVs in a whole year is… minuscule…

    • trackdaze 9 months ago

      For reference, Think there was ~ 140,000 evs sold worldwide in march. Likely to be 2million sold this year.

      Ev sales tend to be lower in thirdworld and or backward looking countries.

      With oil prices creeping higher it just means australians will spend more on importing oil and trade deficits.

    • Cris Baker 9 months ago

      Apart from Telsa, all other EVs apparently make a loss. So more power to Tesla and its Model 3 soon to be in volume production…

  2. Askgerbil Now 9 months ago

    This comment on the article about control of rooftop solar and batteries applies to electric vehicles too –
    https://reneweconomy.com.au/who-should-control-household-rooftop-solar-and-batteries-82260/#comment-3945352845

  3. Joe 9 months ago

    The opening paragraph to the talking about the Government bringing its electric vehicle policy into the 21st century….correct me if I am wrong but there is no EV policy, is there?
    We have our EV Champion, the Kelly, with an opinion ( not policy? ) of no subsidies for EV’s. We don’t even have a policy for the ICE with regard to emissions. For the COALition future transport is a policy free zone unless of course we don’t count business as usual ICE transport as being their future transport policy..

  4. Les Johnston 9 months ago

    There is opportunity for EV policy to achieve significant improvement in air quality adjacent to major roads. This could take the place of the current inaction on emissions from new petrol and diesel vehicles. While VW has paid out billions in fines in the US it is also noteworthy that VW has been saved from such costs in Australia as motor vehicle emissions are dismissed as being irrelevant despite scientific evidence that health costs of vehicle emissions are not dissimilar to that arising from vehicle accidents.

    • Brian Tehan 9 months ago

      I can’t believe that large cities haven’t encouraged or mandated electric buses in the city centre at least. How about a toll on non EV cars in the city centres. This would certainly make the air healthier.

      • MaxG 9 months ago

        Why would they? The people do not care, neither do their representatives.

    • Ray Miller 9 months ago

      In Australia the VW fine should be excusion of the ICE fleet and inclusion of the EV fleet at a low profit margin.

  5. Ian 9 months ago

    Some say the EV inflection point will occur when EV batteries cost less than US$100/kWH. In 2017 prices were $200/kWH, this year around $150/kWH.

    Tesla, the yard-stick for The EV industry, is coming out of its “production hell” and wall street is no longer looking for its demise. Other motor vehicle manufacturers are waking up to this EV distruption and are running scared announcing electric models to match Tesla’s, European policy makers are getting brave with their EV incentives and putting limitations on ICE vehicles. Can-do China is ramping up battery manufacturing. Miners have taken the cue and there is investment flurry in developing the raw materials for EV’s.

    When the days get longer, and warmer and the snow begins to melt on the southern alps, when the gray nomads start to migrate south and Myers has specials on its winter wear, then you know it’s spring.

    The signs are all around, and this time EV’s will become ubiquitous in a very short period of time.

    5 years tops, and you won’t be able to buy a new ICE car – even in Australia.

    • Cris Baker 9 months ago

      I seem to recall that Elon Musk, in his latest quarterly talk, said he expects Telsa batteries to be down to US$100/kWH within a year if not this year…

      • Ian 9 months ago

        Nice reference, thanks. As wholesale prices of batteries drop, an inflection point should be reached where the cost of an EV equals that of a similar specced ICE vehicle. That price is apparently $100/kWh. I don’t know if you can really work with this figure, but anyway, if this is true, then the cost of other parts of the drive chain must be cheaper in the EV. For instance, the ICE engine, gearbox, driveshaft, differential etc would be more expensive than the electric motors, electronics etc. The price differential would then be worth $100/kWh.

        Now then, take an EV with a battery cost of $200/kWh, lop off the expected savings on the electric drive train of $100/kWh and you should expect such a car to be only US $100/kWh (AU$135/kWh) more expensive then its ICE competitor.

        Take a car like the Nissan Leaf with a 40kWh battery pack. We should expect this to be 40 x$135 =AU$5400 more expensive than its ICE equivalent (obviously not including all the import duties etc.)

        A big help to force the reduction in EV prices would be to analyse the EV offerings of car companies and ask why they charge so much more for these BEV when clearly they could offer much cheaper prices.

        Our country buys 1% of all cars made in the world, not an inconsiderable market, and we want decent prices for BEV.

    • Calamity_Jean 9 months ago

      “5 years tops, and you won’t be able to buy a new ICE car – even in Australia.”

      I hope you’re right. And ten years after that you won’t be able to find fuel for your old ICE car.

  6. Ian 9 months ago

    The only reason for the government to neglect EV incentives or actively oppose EV uptake is the $23 billion a year that they get from fuel excise. Government policy makers should be challenged on this embarrassing issue constantly.

    Questions like this “ Is the reason your government has no EV incentive policy the fact that government gets $23 billion a year from fuel excise?”

    or this question: “ your government opposes a carbon tax on fuel but does it not already benefit from a tax of 0,396c/l on petrol and diesel?”

  7. Ray Miller 9 months ago

    We urgently need a serious EV policy even based only on increasing the fuel reserve for the ICE fleet, even the Liberal base has recognized the importance and wants to extend the fuel reserve from 20 odd days to 90!
    Australia has most of the pieces to manufacture and run EV’s, only lacking vision and with a Liberal mill stone around our necks.

  8. Cris Baker 9 months ago

    “a few, like Volvo, setting targets to phase out the manufacture of internal combustion engine cars entirely.”

    Yet Volvo are only saying all cars will have an electric component, NOT that they’re abandoning ICE all together. They’ll be keeping ICE with their hybrids…

    • Brunel 9 months ago

      A 10 kWh battery in my car would be a great way to slash emissions.

      More and more cars should have a 10 kWh battery.

  9. Brunel 9 months ago

    I would rather spend the money on building electric buses here and making bus travel free for kids.

  10. MaxG 9 months ago

    The Ludicrous No Policy (LNP) mob couldn’t care less about cleaner ‘anything’. If it does not run on coal it is useless in tier mind. this is their believe down to the core; like flat-earthers, there is no way to change their agenda.

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