Electric vehicle sales to make up half of new car buys by 2030

Electric vehicles lined up in a parking lot. Picture: Bloomberg.

BEN PACKHAM
June 14, 2018
The Australian

A new report for the Turnbull government predicts electric vehicle sales could make up 50 per cent of new car purchases by 2030, and 100 per cent by 2040, ramping up the pressure on policy makers to find new revenue sources to replace the $17 billion a year raised in fuel taxes.

The rapid EV uptake forecast was modelled under a “likely action” scenario, which assumed new luxury car tax and fringe benefits tax exemptions, the removal of import restrictions on second-hand EVs, government procurement of EVs, and a range of state and local government incentives.

The scenario, which would also require nearly $1.7 billion worth of investment in new charging infrastructure, would see EV sales rise from 3100 a year currently to more than 70,000 a year over the next five years.

The Energeia report found a proposed carbon emissions standard for new vehicles in Australia would drive an even more rapid EV uptake, increasing sales by up to 300 per cent.

The report, for the Australian Renewable Energy Agency and the Clean Energy Finance Corporation, found financial incentives, particularly those that lowered EV purchase costs, had the biggest impact on EV uptake.

Non-financial incentives, such as public charging infrastructure, free parking and preferential use of transit lanes played a supporting role, the report said.

Energy Minister Josh Frydenberg has predicted an EV “revolution” with one million of the cars on the road by 2030. But Energeia said Australia lagged “well behind leading international jurisdictions” in implementing EV-friendly policies.

The report said EV owners could expect to pay $11 to fill their 100kWh “tank” at a public refuelling station within 10 years. Depending on the model and the driving conditions, an EV with a 100kwh battery could travel 400km on a full charge.

It said EVs were expected to reach price parity with equivalent internal combustion cars by 2024.

Electric Vehicle Council chief executive Behyad Jafari called for urgent taxpayer-funded support to speed the transition to EVs.

“Our research shows that the lower cost of running an electric vehicle puts at least $1500 back in the family budget each year based on average prices. That saving rises when using discounts available through the market,” he said.

“This report makes it clear that providing early support and incentives for electric vehicles provides a benefit for all Australians through cost savings and supports our economy through investment and job creation.”

But the government has ruled out further taxpayer-funded incentives for EV owners, amid a backlash from hard-right Coalition MPs who believe the drivers of petrol and diesel cars should not subsidise those who choose to drive EVs.

Mr Frydenberg said upcoming fuel efficiency standards would “provide a national platform for key stakeholders to share ideas and work together”.

The government is banking on strong EV sales forecasts to minimise the political pain of a proposed 105gCO2/km standard.

But a rapid rise in EV sales would blow a massive hole in the budget, as the vehicles avoid paying the 40 cents a litre fuel excise that helps fund the nation’s roads.

The government announced in November 2016 it would look at new road user charges, but is yet to announce who will lead a promised study on the issue.

Opposition energy spokesman Mark Butler said the government had left Australia as one of just a few developed nations without vehicle emissions standards.

“The Australian EV market is basically non-existent because the Turnbull government can’t even tackle vehicle emissions standards,” Mr Butler said.

“We’ve made it clear that we will take an ambitious climate change transport policy to the next federal election that recognises that the car industry has shifted and allows Australian consumers to have access to new models, including EVs.”