The Australian Labor Party and current opposition party have announced a bold new policy today regarding electric vehicles. The party that is on track to be in power after the next federal election, which could be as soon as next month.
The new EV friendly policy aims to accelerate Australia’s transport sector, by setting a target of 50% for new car sales by the year 2030, that’s just 10 years away.
A target is an interesting prospect given buyers are free to buy whichever vehicle is on the market. Auto makers are currently able to sell vehicles with whichever powerplant they believe will sell in the Aussie market. So what’s with a target and how can a political party (or future Government) actually change which cars are sold?
The answer is to follow what’s happened internationally. Many countries overseas are either implementing strict emission standards, or increasing efficiency regulations to the point where only EVs would be possible of meeting. This forces the hand of auto makers which then in turn means consumers would have a clear choice. The question is how aggressive do you make this transition and how quickly can auto makers respond.
The good news is the automakers are already playing in a global market where the transition to EV is on in a big way. Almost every serious auto maker already has vehicles in development and many of those will make their way into the Australian market.
Another thing Governments can do is to show the public that EVs are a practical solution by choosing to replace the Government fleet, not with internal combustion engine (ICE)-powered vehicles, instead with fully electric vehicles.
Labor has pledged to buy 50% of the Government fleet vehicles by 2025, which is a very aggressive timeline. These are not just the vehicles that drive the politicians around Canberra, but also across a large array of Government divisions that span across Australia.
In 2016, Australia’s public sector was the largest buyer of vehicles in Australia. Of the 1.25 million new vehicles sold in Australia that year, more than 50,000 were purchased by Government agencies and authorities. While that number has certainly grown over the past few years, it wouldn’t be a surprise that Government still leads the way in vehicle purchasing.
This means that even if we took the 2016 sales and applied them to the year 2025, the number of EVs the Government would buy would be a massive 25,000. Given there’s been less than 6,000 sold in Australia since 2011, that’s a massive push forward for EV sales in the country.
In 2019 there are a number of EVs on the market, but the reality is, EVs typically cost more (at least up front), so this policy isn’t without its impact on the budget.
The final part of Labor’s plan is to allow businesses who invest in EVs for their fleet vehicles, to access a 20% deduction on their tax bill, thanks to a depreciation incentive.
While Australia’s EV sales have been off to a very slow start, a very competitive option for consumers is about to launch in Australia mid-year, the Telsa Model 3. This should land between A$60-A$100,000 depending on the variant and options you select. There’s a lot of people who buy in this price band and would be potential customers for the Model 3.
I’d love to see the Government (current or future) offer the ability for Government departments to assist employees into an EV of their own using salary sacrificing.
The final piece of the puzzle is of course Government investment in recharging infrastructure. While there’s pockets of it in some states happening, there is no national plan to electrify our service stations, in preparation for the next phase of our transport industry.
While it’ll cost money, I think it is great policy from the ALP, being aggressive on this is the right thing to do, and I hope they do the same with autonomous vehicles.