Australia Opts For EVs

Hussein Dia

Australia’s first National Electric Vehicle Strategy details the government’s long-awaited plans to accelerate the adoption of these vehicles. Consultations on the strategy began last September. The climate change and energy minister, Chris Bowen, then promised the strategy would make Australia a globally competitive market for electric vehicles. Households and businesses would have access to the best modern transport technology at affordable prices.

The strategy represents a step in the right direction but falls short of introducing meaningful new measures to speed up this transition. Transport is Australia’s third-largest – and fastest-growing – source of greenhouse gas emissions. Cars produce about half of all transport emissions. Although EV sales almost doubled between 2021 and 2022, they represented only 3.8 per cent of all new vehicle sales in 2022. That’s well below the global average of 12-14 per cent. And it’s way behind world leader Norway where 87 per cent of cars sold now are electric.

An ambitious national strategy, backed by robust fuel-efficiency standards, is vital for decarbonising Australia’s road transport. It will also improve air quality and reduce our dependence on fossil fuels and imported oil. During consultations on the strategy, around 500 submissions were received, representing the views of more than 1,500 individuals and over 200 organisations.

Australia is the only country in the OECD without mandatory fuel-efficiency standards for road transport vehicles. They are needed urgently now as an important step to increase the supply of electrical vehicles to Australia. Bowen said today the government will not introduce any bans or stop companies selling any type of vehicle in Australia. Instead, they will be required to sell a “good proportion” of electric and fuel-efficient vehicles. 

The strategy does not provide new incentives to help Australians with the cost of buying an electric vehicle. There is also no mention of targeted subsidies or measures to ensure equity. Instead, the government said it will work with states and territories on nationally consistent principles to ensure demand stays strong.

The strategy also falls short on measures to accelerate the adoption of electric trucks and heavy commercial vehicles. Freight transport networks and supply chains present particular challenges for reducing emissions. It is equally important to incentivise adoption by providing cheap loans and increasing supply of reliable, sustainable and cost-effective alternatives to diesel trucks. Importantly, too, the strategy does not stop subsidies and incentives for fossil fuel vehicles.

A credible strategy would need to consider a so-called feebate system. Feebates involve placing a levy on purchases of vehicles with high emissions and using the revenues to provide rebates for purchases of vehicles with zero or low emissions to offset their higher prices. In the past few weeks, the United States and the European Union have announced some very ambitious plans that make the Australian strategy look very modest. The US has proposed strict new emissions limits that would require two-thirds of vehicles sold in the US to be electric by 2032. 

The EU also had plans to ban the sale of internal combustion engine cars from 2035. In February, the European Parliament approved the ban, which was later revised to allow some combustion engines running on e-fuels to be sold beyond 2035. Still, this remains one of the world’s strongest measures to phase out fossil-fuel vehicles.

The much-anticipated fuel-efficiency standard will be the key to demonstrate Australia’s commitment to reducing transport emissions. The standard will need to be mandatory, rigorous and robust. Clear targets on electric vehicle sales and timelines for phasing out internal combustion engine vehicles are needed. If the standard is not carefully designed, we will continue to let down future generations, and the planet.

-- theconversation.com