Slow electric vehicle uptake costing Australian economy millions

Australia’s “do-nothing” approach to the uptake of electric vehicles could cost the economy more than $350 million over the next 20 years, a new report has found, at an environmental cost of one million tonnes in added carbon emissions.

Electric vehicle uptake in Australia has been painfully slow, with recent reports suggesting just over 1000 EVs were currently driving Australian roads, representing just 0.01 per cent of the market.

But research commissioned by the Energy Supply Association of Australia found that the introduction of some basic, low-cost incentives to drive the uptake of alternative fuel vehicles – that is electric vehicles (EVs) and natural gas vehicles (NGVs) – could boost their uptake to almost one million in just 10 years, and lead to more than $1 billion in gross value added over a 20-year period.

It’s encouraging to see that the ESAA is promoting an early-adopter approach to alternative fuels, something it has been less keen to embrace with small scale solar and large scale renewables. But utilities and generators feel they have more to gain from a big uptake in EVs, given that it is likely to add to electricity demand rather than subtract.

Some of the incentives proposed by the ESAA included such measures as giving the cars access to priority lanes in peak times, access to dedicated parking spaces and requiring vehicle manufacturers to increase the range of vehicles sold into Australia to accelerate and increase the number of models available.

Interestingly, the report said that to achieve optimal economic efficiency, Australia should aim to have 4 million EVs over the next 20 years, with interim targets of 900,000 EVs by 2025 and 2.3 million EVs by 2030.

The economically efficient target for NGVs was 2 million, or just more than 11 per cent of Australia’s light passenger vehicle fleet by 2035; with interim targets of 85,000 by 2025 and 525,000 by 2030.

But this was unlikely, the report noted, without a comprehensive AFV policy framework federally – an area where Australia is lagging behind many international peers.

Further failure to take action, the report warned, would have a net cost of $368 million (EVs) and $113 million (natural gas vehicles, or NGVs) to the Australian economy, and require the import of another 30,000 terrjoules of fossil fuels.

“There’s a lot to like about AFVs and what they offer,” said ESAA CEO Matthew Warren in a statement on Monday.

“Apart from the broader economic benefits of the cars of the 21st century, they are cleaner, safer, better performing and cheaper to drive. And they can reduce our dependence on oil imports.”

“We expect this technology to be like solar PV, which, after a slow start, has accelerated significantly over the past decade to a point where we now have the highest penetration rates in the world with 1.4 million homes with solar panels on the roof.

“In the same way once there is a critical mass in the domestic market for alternative fuel vehicles it will bring down costs, support widespread development of charging stations, increase the level of after-sales support and create a re-sale market that will encourage more drivers to buy one.