Tesla arrival tells us that the future is electric transport

The Tesla Model S launch earlier this week marks the beginning of electric vehicle technology becoming commonplace in Australia.  Add to that the trends we are seeing in electric bicycles and motorbikes, and it is clear that the electric transport revolution is well underway.

Passenger vehicles currently contribute about 7% per cent of Australia’s total CO2-equivalent greenhouse gas emissions; with a shift to electric vehicles powered by renewables this could be eliminated.  Beyond Zero Emissions, an Australian-based, not-for-profit climate change solutions think-tank, is currently developing a zero carbon plan for personal transport.

The plan is based upon electric vehicle technology, and with the advent of an affordable, some might say seductive, electric sedan, that plan comes even closer to reality.  The BZE plan will outline the potential for zero carbon personal transport in Australia, including the cost of a national shift to electric vehicles over ten years.

Modelling by consultancy AECOM and others has highlighted that a shift to electric vehicles appears near inevitable given underlying drivers.  As petrol prices continue to rise over the long term and batteries prices continue to fall, electric will become the cheaper alternative.

BZE’s modelling shows that over 90 per cent of our passenger trips can be met with electric vehicles. Up until now, longer regional journeys using electric vehicles have been more problematic – with a 500 km range the Tesla Model S changes that.  Modelling indicates that even without explicit policy support, around 90 per cent of new vehicle sales in 2030 could be electric vehicles of some kind (including plug-in hybrids, hybrids and battery electric vehicles) .  As has been observed in the photovoltaics industry, technology transitions can happen rapidly; when market conditions align, volumes increase and prices decline exponentially.

Electric vehicles are more expensive up-front, with a premium of around $21,000 to $50,000 compared with similar internal combustion engine vehicles, largely due to the cost of the large battery required.  The savings come in the operation.  Assuming petrol prices at $1.50 per litre and typical fuel efficiencies, an internal combustion engine vehicle might cost over $11 per 100km, while a comparable electric vehicle will do the same distance for $2.30 (assuming off-peak charging at around 12 c/kWh).  Those savings add up, particularly for people who drive long distances.  For small vehicles that drive long distances, electric vehicles could be the cheaper option over their lifetime from as early as 2016.

There are concerns that electric vehicles won’t be able to offer the same convenience as internal combustion engine vehicles, particularly when it comes to refuelling.  Early studies suggest that most people will find it convenient to do most of their charging at home, taking advantage of lower off-peak tariffs.  To supplement that, Tesla is already developing a number of charging stations in Sydney and Melbourne and plans to build a charging network across Australia. The take-up rates seen in the US and Europe of the model S also have the potential to drive the development of more charging stations in Australia.

Others question the green credentials of electric vehicles, noting that around 80% of Australia’s electricity is produced by emissions intensive coal-fired generation at present.  Even without a shift to renewable energy, electric vehicles have around the same greenhouse intensity as internal combustion engine vehicles, according to AECOM’s modelling.   However, with a shift to renewables, electric vehicles become carbon free.  The purchase of 100% Greenpower is available to all consumers at a premium of only 20-30% over their current electricity tariffs, and makes the electric vehicle’s carbon credentials squeaky clean.

Aside from eliminating personal transport carbon emissions, the most profound impact of a shift to electric vehicles may ultimately be in energy independence.  Rather than remaining reliant upon imported oil, electric vehicles offer the opportunity to shift to personal transport powered by the eternally renewable wind and sun.  With some of the best renewable resources in the world, Australia seems well placed to take advantage.

Stephen Bygrave is CEO of Beyond Zero Emissions