Australia fails on electric vehicles. California shows it’s possible to pick up the pace

Of the many similarities between California and Australia, both are affected by bushfires and climate change, and both are home to larger cars and trucks than the norm in developed countries. They are, however, different when it comes to electric vehicles and vehicle regulations. While California has been pursuing low-carbon and electric vehicles for decades, Australia lags behind most developed countries.

Plug-in electric vehicles accounted for 16% of new light-duty vehicle sales in California in the first half of 2022. In Australia, electric vehicle sales represent only 2% of the market, and come mainly from one automaker, Tesla.

Australia, a country with no regulations on vehicle fuel economy or CO₂ emissions, is debating how to move forward. The local auto industry suggests Australia needs a slow transition to electric vehicles and is expected to lag behind the United States, Europe, China and neighboring New Zealand. Compared to proposed European emissions standards for vehicles of 43 grams of carbon dioxide per kilometer in 2030, local industry proposes 98-143 g CO₂/km (for light-duty cars and SUVs).

Australia’s proposed target would result in a slow transition, which new research shows will have little or no effect on CO₂ emissions from the transport sector.

The logic of a slow transition is the same as that heard for decades in California: prices for electric vehicles are too high, there is not enough infrastructure to support these vehicles, their range is too short and some models are not available (electric utilities, for example).

These concerns have some validity, but are largely outdated. Australia in 2022 faces a very different situation than California when it started on the electric vehicle path.

Let’s see why each of these four concerns might now be overstated.

1. Limited scope

Drivers in Australia and California travel similar distances each year. In both regions, most trips are well within the range of electric vehicles.

In addition, in both regions, most households own two vehicles. This means that buyers can, if necessary, use another vehicle for longer journeys.

The range of electric vehicles has also improved: the average range of electric vehicles available in 2013, when electric vehicle sales in California reached the current level of 2% in Australia, was 179 kilometers (111 miles). . Now it’s 443 kilometers.

Graphic: The conversation. Data: EPA, CC BY

2. Lack of charging infrastructure

In California and other markets like Norway, most first-time electric vehicle buyers are charging at home, in their driveway or in a garage. In Australia, even more people live in single-family homes than in California. Drivers in these households could charge their vehicle at home, reducing the need for public charging stations.

Public charging may be needed to support occasional charging, to enable longer journeys and to support the smallest proportion of households without home charging. But public infrastructure is not a prerequisite for early market growth.

Australia already has as many charging stations per person as California did in 2016. In fact, Australia may be only a few years behind.

3. High prices

In Australia, the average new car costs 40,729 Australian dollars (28,000 US dollars). Electric vehicles with a range of around 400 km could be offered at this price.

For example, the 2023 Chevrolet Bolt starts at US$25,600 (AU$37,000) in the United States. And until 2020, the Renault ZOE was sold in Australia for 37,400 Australian dollars. Both models have a range of around 400 km.

It has also been shown that consumers are willing to pay more for an electric vehicle compared to a conventional vehicle. This could be partly due to savings in fuel and maintenance costs.

4. Lack of role models

In 2022, 316 electric models and 162 plug-in hybrid models are on sale worldwide. These models include SUVs, utility vehicles and pickup trucks.

The lack of choice and lower cost electric vehicles in Australia is due to automakers preferring to send these models to markets with EV-friendly policies. Making these models available in Australia can be as simple as giving automakers the incentive to sell them there.

Australia could be well placed for a rapid transition to electric vehicles if it adopts more favorable policies. If Australia implements policies such as ambitious fuel economy standards or a mandate to sell zero-emission vehicles, the country could benefit in much the same way as California.

All it takes now is a supportive policy

Supportive policies like these help set the stage for the growth of the first electric vehicle market. They do this by:

  • give automakers the confidence to develop and deliver electric vehicles at multiple price points, in multiple body styles and with long ranges

  • give confidence to providers to deploy the charging infrastructure

  • providing consumers with the electric vehicle offering they expect.

An electric vehicle mandate can also protect consumers against supply ebbs and flows that are common in import-only markets.

Other nations have gone this route

Australia is not the first nation to face these challenges. South Korea, despite being a global producer of electric vehicles, was experiencing weak domestic market growth. Many Korean electric vehicles have been exported to regions with more technology-friendly policies.

The government has responded with policies supporting electric vehicles. Since then, domestic sales have tripled. South Korea is now the seventh largest electric vehicle market in the world, up from 11th in 2019.

And as Federal Energy Minister Chris Bowen noted at the EV Summit last month, with the right policy parameters, Sweden has increased its share of electric vehicle sales from 18% to 62% in just two years. .

Similar approaches could produce similar results for Australia. While some nations may need a slower transition for various reasons, Australia need not be one of them. Concerns about scope, infrastructure, and model availability can be easily overcome.

The country is well positioned for early market growth. All states already offer incentives for electric vehicle buyers, including rebates, registration reductions and road tax exemptions.

All it might take is for the federal government to adopt policies that support electric vehicles. Based on the remarkable improvements in technology and what has been learned in California and elsewhere, Australia is well positioned for rapid market growth.

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