Australia’s first National Electric Vehicle Strategyreleased today, describes the long-awaited government plan to accelerate the adoption of these vehicles.
Consultation about the strategy began last September. The Minister of Climate Change and Energy, Chris Bowen, then promised the strategy would make Australia a globally competitive electric vehicle market. Households and businesses would have access to the best modern transportation technology at affordable prices.
But does the strategy meet this requirement? expectations? Is it ambitious enough to achieve our emission reduction? goals and international obligations? And how far will it go to bring Australia into line best practice in the world for the transition to electric vehicles?
In short, the strategy is a step in the right direction, but fails to introduce meaningful new measures to accelerate this transition, at a time when urgent interventions are needed.
Why is the strategy important?
Transport is from Australia fourth largest – and fastest growing – source of greenhouse gas emissions. Cars produce about half of all transport emissions.
One of the fastest ways to reduce these emissions is to accelerate the current slow adoption of electric vehicles.
Although sales of electric vehicles almost doubled between 2021 and 2022, they only accounted for 3.8% of all new vehicle sales in 2022. That is well below global average of 12-14%. And it is far behind world leader Norway where 87% of the cars sold now are electric.
An ambitious national strategy, backed by robust fuel efficiency standards, is vital to decarbonising Australia’s road transport sector. It will also improve air quality and reduce our dependence on fossil fuels and imported oil.
Read more: A rapid shift to electric vehicles could save 24,000 lives and make us $148 billion better off over the next 2 decades
What is good and striking about the strategy?
During discussions about the strategy around 500 submissions representing the views of more than 1,500 individuals and more than 200 organizations.
A key feature of the strategy is the commitment to introduce Australia’s first fuel economy standard for new cars. Frustratingly, however, the government has delayed completion of the standard until the end of 2023still pending consultation with the industry on its development.
Australia is the only country in the OECD with no mandatory fuel efficiency standards for road transport vehicles. They are now urgently needed as a major step to increase the supply of electric vehicles to Australia.
Bowen said today the government will not introduce a ban or stop companies from selling any type of vehicle in Australia. Instead, they will be required to sell a “good share” of electric and fuel-efficient vehicles. But no targets were mentioned.
In addition to the planned fuel efficiency standard, the strategy introduces another important initiative related to the recycling and reuse of electric vehicles and batteries.
The rest of the strategy does not provide substantial policy directions or targets to accelerate the transition to electric vehicles. Instead, it mostly reaffirms existing programs and policies, such as it electric car discountand other plans already announced upgrade charging infrastructure and the National Reconstruction Fund to boost local production.
Read more: Made in Australia? The electric vehicle revolution gives us the opportunity to revive an industry
What is missing?
The strategy offers no new incentives to help Australians with the cost of buying an electric vehicle. There are also no targeted subsidies or measures to ensure fairness. Instead, the government said it will work with states and territories on nationally consistent principles to ensure demand remains strong.
Nor does the strategy recognize the need for a holistic strategy to decarbonise road transport. Other policy interventions are needed to reduce transport emissions, which cannot be achieved by vehicle electrification alone.
The strategy also falls short of measures to accelerate the adoption of electric trucks and heavy-duty vehicles. Freight transport networks and supply chains pose a particular challenge for reducing emissions. It is equally important to drive adoption by providing cheap loans and increasing the supply of reliable, sustainable and cost-effective alternatives to diesel trucks.
It is also important that the strategy does not stop subsidies and incentives for fossil fuel vehicles.
Read more: Why electric vehicles won’t be enough to curb transportation emissions soon
A credible strategy should consider a so-called feebat system. Feebates mean that a levy is levied on the purchase of high-emission vehicles and the revenue is used to provide rebates for the purchase of zero- or low-emission vehicles to offset their higher prices. Examples include Bonus Malus from France And Clean Car Discount in New Zealand. If carefully developed, these systems could be a cost-neutral method of discouraging the purchase of high-emission vehicles and encouraging the purchase of electric vehicles.
How does the strategy relate to plans abroad?
In recent weeks, the United States and the European Union have announced some very ambitious plans that make Australia’s strategy seem very modest.
The US has made a strict new proposal emission limits that would require two-thirds of vehicles sold in the US to be electric by 2032. The proposal, if ratified, will represent the most aggressive vehicle emissions reduction plan in the US. It produces an average of 13% less pollution annually.
The EU also had plans prohibit the sale of combustion engine cars from 2035. In February, the European Parliament approved the ban, which was later rated to enable the sale of some internal combustion engines running on e-fuels after 2035. Yet this remains one of the most powerful measures in the world to phase out fossil fuel vehicles.
Read more: Why a shift to basing vehicle registration charges on emissions matters for Australia
The road ahead
By placing decarbonisation of road transport on the national agenda, the National Strategy for Electric Vehicles is a good step. But it falls short of the ambitious plans of other developed countries.
The long-awaited fuel economy standard will be key to demonstrating Australia’s commitment to reducing transport emissions. The standard must be mandatory, strict and robust. Clear targets are needed for sales of electric vehicles and timetables for phasing out combustion engine vehicles.
If the standard is not carefully designed, we will continue to fail future generations and the planet.
