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BMW Group backs local call for EV incentives
One per cent EV market share only achievable with monetary incentives: BMW Group
20 Jul 2018
BMW Group has backed its Australian arm’s persistent call for the federal and state governments to offer incentives for electric vehicles (EVs), which will help accelerate their local introduction.
Speaking to journalists this week at the i8 Roadster national media launch in Cremorne, Victoria, BMW Group vice-president of governmental affairs Andreas Klugescheid stressed that short-term monetary incentives are necessary to give the EV market traction.
“For the time being, you will also need monetary incentives – that’s important to understand,” he said.
“There’s no market in the world, where you have a share of one per cent or more with electric vehicles, that has no monetary incentives in place.
“For the time being, this is the case. Obviously, at one point (in the future), you’ll want to phase that out, but you need to have it in order to spur the market.”
One such example is Norway, which last year, despite accounting for just 1.4 per cent of BMW Group’s European market share, was responsible for 65.4 per cent of its battery-electric (BEV) and plug-in hybrid (PHEV) sales due to the incentives it offers.
Furthermore, BMW’s i3 EV tallboy hatchback was recently the best-selling model in Norway for several months in a row, which was a first for any BMW Group product in the country.
Comparatively, Australian sales of EVs (including hybrids) have increased this year without incentives, with 7391 examples sold to the end of June – a 14.5 per cent increase over the 6461 deliveries made during the same period in 2017.
However, despite their growth, EVs only have a market share of just over 0.01 per cent this year when compared to petrol, diesel and LPG vehicles. This represents an improvement of just over 0.001 per cent year-to-date.
As such, Mr Klugescheid argued that the demand for EVs is politically defined and not yet self-sustaining, and while the same BMW Group models are offered across most markets, their sales are dependent on a range of incentives.
“(Norway) shows how strong a market can be if the right political instruments are triggered,” he said.
“On the one hand, there’s monetary incentives – that’s the easy one – but it’s also about incentives that relate to user behaviour.
“For example, in California, the ability to use the commuter lane (saves) you – in Los Angeles and San Francisco – two hours every day, and it doesn’t cost a thing.
“Parking privileges and so on, there are many non-voluntary incentives that make the life (EV owners) easier and still leaves some money in the state’s kitty.”
While BMW Group expects 15 to 25 per cent of its annual global sales in 2025 to consist of BEVs and PHEVs, Mr Klugescheid admitted that the percentage variance is due to the uncertainty of future EV incentives and infrastructure that will prompt growth.
After participating this week in the BMW Group Dialogue international mobility forum in Melbourne, Mr Klugescheid flew to Canberra to meet with federal government officials to discuss several topics, including the introduction of EVs and autonomous vehicles.
When questioned if internal-combustion engines will eventually be phased out completely, Mr Klugescheid was unsure what the future would hold, despite the UK, French and Norwegian governments, among others, recently announcing their intention to ban their sale in the coming decades.
As previously reported, outgoing BMW Group Australia chief executive officer Marc Werner has been critical of the federal government’s inaction around the introduction of EVs, calling on several occasions for monetary incentives to be offered.
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