The Federal Government’s electric-vehicle (EV) policy – Future Fuels and Vehicles Strategy - announced last week received a mixed reception.
Cornerstone of the policy is an extra $178 million in funding, mainly to accelerate the rollout of EV charging points across the country and to upgrade the electricity grid to handle the surge in battery-operated cars in the coming decades. Both good things to invest in, to be sure.
But critics pointed out what the policy did not contain: tougher fuel emissions standards, a timeframe for phasing out petrol/diesel cars and financial incentives to encourage consumer take-up of EVs.
Coincidentally, a global study released by Arcadis just days after the Federal Government announcement shows the scale of the challenge.
The Global Electric Vehicle Catalyst Index 2021 ranks 12 countries including Australia, and the US states of New York and California, against three criteria considered critical to accelerating the transition to EVs: Government leadership and incentives, EV market maturity, and EV charging infrastructure.
Australia ranked last or second-last in all criteria and was the only market assessed as poor in each category (on a four-point scale from poor to excellent).
We were equal last with Singapore in EV market maturity, measuring EV penetration, market share and model availability and forecast uptake. On the third criteria, assessing availability of charging points, charging infrastructure standards and charging strategy, Australia was second last, just above Thailand.
Australia ranked last on the measure of Government leadership and incentives – factoring in subsidies and incentives for EV purchases, fuel emission standards and mandated end-dates for petrol and diesel cars.
Given the study was compiled just before the Government’s announcement, would the new policy have shifted Australia’s rankings?
The answer is not much. If anything, it may have bumped Australia’s performance on Government leadership and incentives from poor to fair. Otherwise, we are still very much lower quartile in our readiness or commitment to make the transition to EVs.
Only 1% of Australian cars sold are EVs (compared to around 25% of Dutch cars). There are only around 20 to 30 EV models available in Australia out of the 400 available globally, and they are relatively expensive. The Government says it wants 30% of new cars to be electric by 2030; the UK and Netherlands have committed to 100% EVs in the same timeframe.
The key problem as I see it is the lack of a coordinated national policy. Some States – NSW notably – are powering ahead but a national policy framework is lacking.
Many governments around the world see the future is EV and that’s reflected in the policy mix. Other countries are closer to the critical mass of EV market penetration and charging infrastructure that accelerates the transition, encouraging car manufacturers to make more EV models available, stimulating demand and driving prices down further in what is a virtuous cycle.
At the moment, Australia lacks those catalyst factors and until we have them, we will continue to see EV manufacturers prioritise other markets over Australia. Worse, we will become a dumping ground for the petrol and diesel cars that struggle to be sold in other markets.
Last week’s EV policy announcement was a good start, but it doesn’t go far enough. Here are a few steps the Government could take to set us on the path to parity with comparable markets on the transition to EVs:
- Harmonising EV policy – aligning Federal policy with that of the more advanced states and putting EVs onto the National Cabinet (formerly CoAG) agenda.
- Setting bolder targets for EV market share by 2030. The Government says 30% - why not 75%, if not 100%?
- Tightening standards for emissions of carbon, particulates and nitrous oxide, which will make Australia less attractive for petrol and diesel car makers.
- Introducing incentives for EV purchases, perhaps relief from import taxes and duties and depreciation allowances.
- Giving clarity on how the transition from petrol excise revenue to road-user charges will occur.
- Level with the public - stop using EVs as fodder for scare campaigns.
Australians have a history of being fast-followers, of moving quickly to adopt new technology once it’s established. My sense is the Australian public knows that EVs are coming they are ready for a bolder EV vison at the national level.