Australia recently committed to reducing greenhouse gas emissions by 43% below 2005 levels by 2030. While that seems like a while away, there are just 100 months between now and then.
With the Transport industry accounting for a significant portion of Australia’s emissions it is critical that we address it to meet the new targets from the new Government.
Transport emissions account for around 18% of our emissions, with around 2/3rds of that (around 12%).
As regular readers of the site would know, I’m a big supporter of EVs, have owned one since 2019 and are about to become an EV-only family in under a month.
The transition to electric cars in Australia has been slow, accounting for just over 2% of new vehicle sales. When we compare that to other countries around the world, we fall far short of Norway, Sweden, Germany, UK, Europe, China and the US.
There are a number of factors that combine to explain why our adoption rates have been so low and why our emissions stay high and are actually rising in the transport sector.
The first is price, with the average electric vehicle still more expensive than the combustion alternative, thankfully this gap is decreasing and there are now EV options starting from around A$45,000. The price of EVs is coming down with new battery technology like LFP, helping to reduce the cost of the largest cost component, the battery. As with computer chips, these costs are expected to continue to trend down over time.
Another key reason is a lack of knowledge in the community around the range of a modern EV and the growing number of charging options available.
By far, the biggest reason that remains is the lack of available EV models. If you’re a tradie and currently drive a Ford Ranger with your toolboxes in the back, and ladder strapped to the roof, you have literally no option to replace that with an EV in Australia right now.
Solving the problem
Part of the reason Australia struggles to get more EV models into Australia is the size of the market, because demand has been lagging other countries, so those automakers that produce EVs, are sending them elsewhere.
To enable Australia to get the attention of automakers around the world, we need to dramatically accelerate the demand for these vehicles. We’ve tried state-based incentives, with reductions on stamp duty, even straight-up rebates of $3,000 for EV buyers and that has certainly helped, but is not the solution.
What we lack in Australia, which is present in other countries which have succeeded in sourcing more EVs and increasing zero-emission new vehicle sales, is Fuel efficiency standards.
While other’s like Europe and the US introduced fuel emission standards many years ago, Australia hasn’t and therefore enable automakers to ship vehicles into our country that have a vast range of efficiencies as a result.
As the price of petrol and diesel has risen, natural market forces have helped some select more efficient vehicles, perhaps downsizing from a hungry V8 Commodore or Falcon. Now gone from sale, these kinds of vehicles offered figures in the range of 12L/100km.
Thankfully people started to choose more fuel-efficient vehicles to reduce their ongoing costs, with many families now driving smaller, turbo-charged SUVs with efficiency numbers closer to 7L/100km.
The next evolution was hybrid drivetrains that in some models like the Toyota Corolla, reduced fuel usage down to as low as just 4L/100km. The problem is, that not everyone drives corollas and as such, Australia’s emissions remain high and are growing.
The real, long-term, sustainable answer to reducing emissions is to reduce them to zero, and you can only do that with an EV.
Those manufacturers that have created compelling EVs have long wait times, showcasing that the adoption of EVs in Australia is changing. When Hyundai, Kia, BYD open a new batch of orders, we’ve typically seen them sell out in just minutes.
The size of these batches is a massive part of the issue, measured in just hundreds of vehicles. For perspective, in the month of July 22, 84,461 new passenger cars were sold in Australia.
It seems Tesla is the only manufacturer to date that is capable of manufacturing vehicles at a volume that means a decent portion can be distributed and sold into Australia. After leading the sales chart with the Model 3, they have now added the Model Y and are on track to sell tens of thousands of EVs in Australia this year.
When it comes to legacy auto, there’s a significant problem, with a manufacturer like VW, never offering their ID.3 or ID.4 cars here, manufacturers like Ford that make the Mach-E and the F150 Lightning, not offering it here. Go down the list and you’ll find story after story where great EV models are not making their way to Australia.
A key reason for this, is that legacy automakers have massive investments in their existing vehicle production lines and would dearly love to continue selling ICE vehicles, to fund their company’s transition to EVs.
If other countries have fuel efficiency standards and Australia does not, where do you think legacy auto will try to sell those vehicles to? Yep, Australia and countries like Australia that don’t push back.
If Australia set serious, aggressive fuel efficiency standards on new vehicle sales, it would force legacy auto to invest in serious R&D to meet those standards. If it’s a choice between investing in the development and production of a slightly better ICE engine, which is likely to see consumer demand fall away dramatically in the next few years, it’d be far more inviting to invest in making and shipping the EVs we actually need.
During the EV Summit this week in Canberra, Minister for Climate Change and Energy Chris Bowen announced a discussion paper on the National Electric Vehicle Strategy would go to consultation in September. This discussion paper would include questions about fuel efficiency standards.
As bullish as I am about EVs, we don’t need to establish a sensible migration plan that sees EV model availability increase dramatically, and prices become more affordable, not just for total vehicle ownership, but up-front prices as well.
As automakers scale production to millions of vehicles per year, the individual per-unit costs of the battery and the entire car, can reduce significantly and this is why emission standards are key to the reduction of the price of EVs. With more automakers selling EVs in Australia, normal competitive market pressure will also cause price competition to activate, also helping affordability for consumers.
There should also be a nationwide education campaign to ensure people are dealing with facts about EVs, not outdated or manufactured issues by people with a motivation to delay the transition.
You can watch a clip from the EV summit, featuring Atlassian co-founder Mike Cannon-Brookes and the Australian Chair of the Tesla board, Robyn Denholm in the video below.
Totally agree.
Australia is the dumping ground (has been for years) of cars which are not allowed to be sold in Europe or America etc. The most polluting cars and trucks come here. Lucky us.
You have a few typo’s/mistakes in the article btw.
– with around 2/3rds of that (around 12%). [12% are what?]
– a vast range of efficiencies as a result. [should be inefficencies?]