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Electric vehicles: Why is Australia so far behind?

·Finance reporter
·4-min read
An electric car gets charged at a supermarket carpark in Sydney, Australia, Tuesday, Nov. 9, 2021. Australia’s prime minister on Tuesday announced plans to encourage people to buy electric vehicles weeks after his government was accused at a U.N. conference in Scotland of being a laggard in fighting climate change. (AP Photo/Mark Baker)
There has been a slow update of electric vehicles in Australia. (Source: AP/Mark Baker)

Australia has been called out for “slow electric vehicle (EV) growth” by the International Energy Agency (IEA), in a report outlining the near future for EVs.

The IEA blamed the slow growth on “slow uptake of EVs” and the market share of standard petrol-fuelled vehicles powered by internal combustion engines increasing.

According to industry figures, only 1.1 per cent of new car sales in Australia in June were EVs and just 1.8 per cent of new car sales this year have been electric.

Why are the numbers so low?

It's mainly due to supply chain issues, but we are lagging seriously behind the rest of the world. By comparison, in the last quarter alone, 13 per cent of new car sales around the world were EVs, with Europe and China leading the way.

Adapt now for the future

The IEA made five recommendations in its report to accelerate the uptake of EVs globally:

1. Maintain and adapt support for EVs

2. Kickstart the heavy-duty EV market

3. Promote adoption in developing economies

4. Expand EV infrastructure and smart grids

5. Ensure the sustainability of supply chains, as concerns over raw materials grow.

(AUSTRALIA OUT) Newcrest Mining Limited. Operations at Cadia Hill near Orange NSW is one of the largest open pit gold-copper mines in Australia. Photo shows Various pics of the mining operations. Thursday 29 January 2009. Photo by Peter Rae (Photo by Fairfax Media via Getty Images via Getty Images)
The explosion of EVs poses challenges for raw materials supply chains. (Source: Peter Rae / Getty)

And the recommendations demonstrate how far behind Australia is.

At present, there are no heavy-duty EVs available for the consumer, and our EV infrastructure and smart grids are in dire need of investment.

“Governments should continue to support deployment of publicly available charging infrastructure at least until there are enough EVs on the road for an operator to sustain a charging network,” the report said.

“Continued government support, either through regulations requiring the building out of charging stations or through fiscal policies and support, should ensure equitable access to charging for all communities to ensure that nobody is left behind in the transition.”

So, what’s holding Australia back?

Analysis released by the Australia Institute this month points to a key flaw in Australia’s road to EV accessibility: fuel efficiency standards... or lack of them.

The research found $5.9 billion in fuel costs would have been saved and emissions equivalent to a year’s worth of domestic flights would have been avoided, if robust fuel efficiency standards had been adopted in 2015.

“As the fuel excise cut nears an end, Australia has an opportunity to save commuters money at the fuel bowser by introducing an average efficiency standard for new cars in Australia,” the authors said.

And the report explains that if Australia did this then it would save motorists money on fuel, reduce transport emissions, increase the availability of electric vehicle models, and even reduce Australia’s reliance on foreign oil.

Fuel efficiency standards are already commonplace in the US, Europe, China and Asia.

But John Quiggin, professor of economics at the University of Queensland, argues that the reason Australia is lagging behind is because of a lack of government support.

“The Albanese government has proposed some incentives to encourage a shift towards electric vehicles. But these limited measures won’t drive the dramatic transition that is needed,” he said.

“Strong fuel efficiency standards would save motorists money, cut emissions and reduce Australia’s dependence on imported fuel. Any way you look at it, the policy makes sense.”

Yes, EVs are cheaper

Solar Citizens, an organisation working to protect and grow renewable energy in Australia, agree, adding that EVs are significantly cheaper to run than standard vehicles.

A recent report revealed charging an EV using solar is now up to 93 per cent cheaper than filling a standard vehicle at the petrol station.

But even if the EV is charged using grid power, the argument still holds water, with Solar Citizens saying it is still about 81 per cent cheaper than petrol.

Maintenance costs are reportedly cheaper as well - Adam Morton wrote in The Guardian this week about the drastic differences in servicing costs between EVs and standard petrol vehicles.

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