Today, the Victorian Government has finally announced a suite of EV-friendly policies to help accelerate the adoption of electric vehicles in the state. This forms part of the strategy to achieve net zero emissions by 2050.
Included in the new policy by Labor’s Minister for Energy, Environment and Climate Change and Minister for Solar Homes, Lily D’Ambrosio, are 4 key pillars which are hopefully just the start, as Infrastructure Victoria made 21 recommendations in April.
- $3,000 subsidies to get 20,000 more Zero Emissions Vehicles (ZEVs) on our roads.
- Target that half of all new cars sold in Victoria by 2030 will be ZEVs.
- More ZEV charging sites.
- 400 more ZEVs in Gov fleet.
Funding a new policy like this comes at a cost to the Government and ultimately the tax payer and in this instance we see a very conservative allocation of just $100-million. What is good to see is that plan will come into effect immediately with the first 4,000 subsidies to be released from tomorrow.
Our transport sector is a significant contributor to our emissions. This package of reforms makes cars the vehicle for change, by getting more zero emissions vehicles on our roads.
Minister for Energy, Environment and Climate Change Lily D’Ambrosio
Let’s break down each one of the 4 initiatives.
$3,000 subsidies to get 20,000 more Zero Emissions Vehicles (ZEVs) on our roads.
There are currently around 20,000 electric vehicles registered in Australia. Around 7,000 of those, or 35% are in Victoria, not bad considering only 26% of Australia’s population live in this state. To add an incentive that looks to effectively double existing 20,000 EVs in Australia, is a really positive sign, but won’t be anywhere near enough to significantly move the needle, given 100,005 new vehicles were sold in March 2021 in Australia.
As for the value of the incentive, $3,000 is important, particularly if you’re talking about removing it from the price of Australia’s cheapest EV, the MG ZS EV which starts at A$43,990. After this new incentive was applied, the driveaway price would be $40,990 and if MG were smart, they’d find a way to knock off $991 and have the car start at A$39,999.
Internationally EV incentives across the globe are far more generous, as other countries try to reduce their Carbon dioxide (CO2) emissions. Americans benefit from a tax credit of up to $7,500, until the manufacturer reaches 200,000 vehicles sold. Some state-based incentives can add to this tax credit and this is likely this scheme is likely to be expanded under President Biden.
France has one of the most generous EV schemes that offered as much as 8,500 Euro (A$13k) as a purchase incentive. As EV adoption there grows, the government is decreasing this to around 5,000 euros in 2022,
There are plenty of other examples from across the globe that are higher than the A$3,000 on offer in Australia, but it is better than nothing.
This subsidy is only available for vehicles under A$69,000. A $3,000 discount on a A$69,000 vehicle equates to a 4.34% saving.
This means the following vehicles would qualify:
- Tesla Model 3 SR+
- Hyndai Ionq
- Hyundai Kona
- MG ZS EV
- Nissan Leaf / Leaf+
- Volvo XC40 Recharge
Target that half of all new cars sold in Victoria by 2030 will be ZEVs.
This is a great target to have, but its really unclear what strategies the Victorian Government will put in place to achieve that target. What isn’t helpful is introducing a new EV tax which is something that’s working its way through legislation right now in Victoria. If approved and made law, EV owners will pay 2.5 cents for every kilometre they travel, with the expected cost to EV owners an additional $300 per year.
With the state Government will see a deficit from growing EV sales which don’t pay the fuel excise, they’ll also likely see a reduction in fines as cars offering more autonomous features that see them obey the road rules and speed zones. This revenue problem is a much larger discussion, but the key takeaway right now is that adding a new tax to EVs, acts as a disincentive, right at the time where you’re trying to encourage people into electric vehicles with the policies announced today.
Given there’s no commitment to ensure the EV tax is only spent on road maintenance, that argument seems incredibly flawed and the tax should be stopped.
More ZEV charging sites.
$19 million will go towards adding new EV charging sites, funding around 50 chargers. While we’ll need to wait on specific locations, we do know they’ll be in a mix of metro and regional locations. It’s unlikely the Government would build their own chargers, instead continuing their efforts to partner with private companies like Chargefox that have done a great job of rolling out a 3rd party charging network.
These chargers range between 50kW and 350 ultra-fast chargers from ABB or Tritium, typically offering the almost standard CCS connector, but often the CHAdeMO connector as well.
400 more ZEVs in Gov fleet.
Adding more electric vehicles to the Government fleet is a great thing as it accomplishes two things at once. Not only does it expose more Government workers to EVs, which may encourage them or their families to subsequently buy EVs, but it also opens the door to more EVs entering the second hand market at a more affordable price when they come out of lease.
This will cost the state A$10 million which obviously could be much larger, given the Government fleet runs tens of thousands of vehicles. It seems the approved vehicle list from VicFleet will need updating as the current list as of April 14th, does not feature a single EV.
Overall it’s great Victoria now has some kind of electric vehicle incentive program, which adds to other regions like the ACT and South Australia. This does expose the federal Government for not having an Australian-wide approach to this transition of our transport sector away from fossil fuels and to new zero-emission vehicles.
These investments will encourage more drivers to consider purchasing a zero emissions vehicle – and ensure Victoria leads the nation in zero emissions vehicle uptake.
Treasurer Tim Pallas
Electric and zero-emissions vehicles are the future of transport – and we’re making sure more Victorians can buy a clean, sustainable car as we prepare for this transport revolution.
Minister for Public Transport Ben Carroll
Leave a comment below if you think the new EV policy from the Victorian Government goes far enough.
Update
You can read here about how to get the A$3,000 Zero Emission Vehicle (ZEV) Subsidy in Victoria here.
Another thought bubble policy from the Victorian government. After some serious pushback including a full page advertisement in the Age by the Electric Vehicle Council the government are now proposing to give an upfront rebate to short range EVs which they will then claw back over the life of the vehicle with a tax that carries additional obligations to document and report the annual kilometers travelled or risk a large fine. If the Victorian government are going to introduce a road tax they need to tax all types of vehicles fairly not just EVs and PHEVs. The fact that the federal government collects the Fuel Levy and not the state government seems to have been ignored by the Victorian Labor Government. The tax on EVs and PHEVs is simply an opportunistic tax on what the Victorian government thinks is a soft target. The Electric Vehicle Council has called out the poor policy choices of the Victorian Government who have refused to engage with them or members of the general public. We need more zero emission vehicles on the road and a specific tax on them at the beginning of their adoption is ill considered and premature. We also need less Fossil Fools in politics.
Not enough and not properly structured