Market Insight: Poor EV report card for Australia

AUSTRALIA’S Electric Vehicle Council (EVC) has handed down a damning ‘F’ rating for the federal government and some other states and territories in its annual ‘State of Electric Vehicles’ report released last week, highlighting the fact that several jurisdictions continue to avoid introducing an emissions policy based on an electrified transport system.

Developing a new policy scorecard to rate governments against a range of “effective and evidence-backed policies to encourage and support electric vehicle uptake”, the EVC said it found a continued reluctance – most apparent at the federal level – to “proactively position Australia’s transport sector to benefit from electrification”.

On a positive note, however, the council said various EV strategies were under development and that it was hopeful many could be implemented, with some states and territories making policy announcements but still some distance from introducing measures.

The EVC has scored each jurisdiction on its level of progress with implementation, and said it expected “significant improvements by some states over the next 12 months in many of these policy areas”.

It said that in 2020, the ACT government was “the clear leader” – receiving a ‘B’ mark – and was closely followed by the New South Wales and Queensland governments, both with a ‘C’.

Victoria and South Australia rated a ‘D’, while Western Australia and the Northern Territory copped an ‘F’ – the same lowest rating as the federal government.

According to the council, NSW has made the most progress over the past year in advancing EV policies, bringing the state up to the level of progress already made by the ACT and Queensland governments.

“NSW recently announced commitments to further invest in public charging networks, provide co-funding for fleets to transition to electric vehicles, and electrify Sydney’s bus fleet,’ the EVC report said.

“The Queensland government has continued to implement ‘The Future is Electric: Queensland’s Electric Vehicle Strategy’ and invest in public charging infrastructure along its ‘Electric Super Highway’.

“The ACT is progressing on meeting its strong targets to electrify its own fleet, including its bus fleet, and has committed to making its buildings ready for EVs.”

The EVC said that Victoria, SA, WA and the NT have EV strategies ready for release this calendar year “so we expect these states to start implementing more electric vehicle policies over the next 12 months”.

The council also said the federal government was expected to release an EV strategy in mid-2020 “but has not”.

In its report, the council noted that over the past 12 months, the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC) have provided some funding of electric vehicle projects.

It also pointed to the fact that the federal government recently increased the 2020-21 luxury car tax (LCT) threshold to $77,565 for fuel-efficient vehicles – the first threshold increase since 2009 – which will reduce the amount of LCT being paid on EVs.

But the report made it clear that “most apparent at the federal level, but also present at the state level, is the continued reluctance by governments to proactively position Australia’s transport sector to benefit from electrification”.

“If governments wish to reduce transport emissions, improve air quality, remove fuel insecurity, and grow local jobs then policy support for electric vehicles must be part of the equation,” the council said.

It added that the effect of the poor rating and inability of governments to formulate a transport emission policy has caused EV manufacturers to bypass Australia as a zero-emission vehicle market.

“While some state and territory governments in Australia have included EVs in recent emissions reduction targets or net zero emissions strategies, the lack of a federal policy and overarching framework to support the industry in Australia is viewed by global car-makers as a signal that the Australian market is not yet ready for EVs,” the council said.

“The past year has seen an increase in EV sales, improvements in consumer sentiment, and the rollout of public charging infrastructure. A number of states and territories have announced new policies to support EVs.

“However, Australia continues to lag comparable countries when it comes to EV market share, model availability, consumer awareness, industry development, and – critically – government support.”

The EVC said that if the Australian EV industry had comparable policy support to other countries “we would enjoy access to more low-cost EV models and greater consumer confidence in EVs”.

“Australia would also be capitalising on more opportunities to create jobs in the sector,” the council said.

“Australia still lags behind the developed world in implementing policies that support the uptake of EVs.

“It remains critical that governments at all levels adopt policies that reduce barriers to consumers and signal market viability to international car-makers.”

The EVC accepted that key barriers to consumer uptakes were the high purchase costs of EVs, concerns about accessible charging infrastructure, and insufficient consumer awareness.

“Another barrier is the restricted availability of EVs in Australia, particularly lower-priced models,” it said.

“Car-makers need to see policy support for EVs to justify bringing them to particular markets.

“Those markets with government policies in place that encourage or mandate emissions reductions from vehicles are the markets that attract EVs.

“These policies include emissions reductions targets, fuel efficiency standards, and average OEM fleet emissions regulations. Australia currently has none of these in place.”

In the first seven months of this year to the end of July, Australian sales of EVs totalled 909 units, a rise of 27.8 per cent on the same seven months of 2019. In the same period, plug-in hybrid sales rose 2.8 per cent to 887 units, and hybrid sales were up 93 per cent at 29,900 vehicles.