Yahoo Finance Thinking of buying an EV? Here's what you need to know
Electric vehicle sales more than doubled in 2023, making up 7.2 per cent of all new cars sold.
The shift towards electronic vehicles (EVs) is happening, whether we are ready for it or not, and Australians are about to face some big changes when it comes to our cars.
The federal government, which unveiled its proposed New Vehicle Efficiency Standards (NVES) earlier this month, wants to see car companies supply more fuel-efficient vehicles by January 1, 2025, in the hopes of accelerating its ambition to reduce carbon emissions by 369 million tonnes by 2050.
Under the government plan, by 2028, Aussie motorists have the potential to save $1,000 per year in fuel and more than $17,000 over the life of the vehicle.
Where does Australia stand in the EV race?
EV sales more than doubled in 2023. The Federal Chamber of Automotive Industries (FCAI) data revealed electric vehicles took a 7.2 per cent market share of overall new-car sales – a jump from 3.1 per cent in 2022.
“Demand for electric cars in Australia is at an all-time high and, if we look back to last year, 87,217 EVs were sold – more than double that of 2022 (33,410),” CarExpert founder Alborz Fallah told Yahoo Finance.
“Although this represents just over 7 per cent of all cars sold in 2023 (a total of 1,216,780), the growth in electric vehicle sales is likely to continue as more and more affordable models reach our market.”
What is driving EV growth?
Australian interest in EVs is being driven by a combination of factors. While one might think rising fuel prices are the significant reason behind it, there are many other considerations.
"With the price of EVs coming down significantly - to the point where a car like the fully electric MG4 starts at around $40,000, and offers excellent safety and driving dynamics, as well as over 400km of range - more buyers realise that they can go down the electric path without breaking the bank,” Fallah said.
This is also helped by generous government incentives, he said, adding: “There is a higher level of social understanding around the environmental impact of internal-combustion-engine (ICE) vehicles than ever before, rightly or wrongly, with plenty of buyers willing to make a choice that sits well with them morally.”
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A spokesperson from the Department of Infrastructure, Transport, Regional Development, Communications and the Arts (DITRDCA) however, told Yahoo Finance that, despite this growth, Australia still lags behind its international peers in EV sales.
FCAI chief executive Tony Webber earlier this month attributed this to Australia’s love affair with utes and SUVs, which accounted for 78.4 per cent of all new-vehicle sales in 2023.
What is holding Australians back from shifting to EVs?
EV take-up in Australia is far behind other countries, with only 3 per cent of vehicle owners currently using them. The slow adoption is due to several factors.
Upfront cost of EVs
New research from global data and insights company Pureprofile revealed close to two-fifths (39 per cent) of Australians were reluctant to purchase an EV due to high upfront investment, with almost two out of three (65 per cent) reporting the rising cost of living was hampering their ability to do so.
Although the charging and maintenance of an EV is much cheaper, they generally cost more than petrol and diesel vehicles to purchase. However, there are now several models in Australia under $45,000, according to lobby group the Electric Vehicle Council (EVC).
The EVC also noted the incentives on offer for Aussies looking to purchase an EV, including the nationwide Electric Car Discount, which provides an exemption from Fringe Benefits Tax for novated leases and company cars.
Most Australian states and territories have their own set of incentives:
Queensland leads the charge with a top rebate of $6,000
Western Australia follows closely behind with $3,500 in maximum rebates available
Tasmania comes in third with $2,000 in rebates for new and used EVs
Canberrans have stamp duty exemptions, a registration discount, and zero-interest loans available
Northern Territory incentives include stamp duty and EV registration fee waivers, and an EV charger grant scheme for owners who buy and install chargers
Victorian EV owners are now only eligible for a registration discount after the Zero Emissions Vehicle Subsidy closed
South Australia and NSW residents are unfortunately out of luck - the rebate programs that were initially offered closed in 2023
Lack of charging stations
Pureprofile data also revealed 36 per cent of Aussies felt that they did not have access to enough EV charging stations throughout the country.
As of December 2022, EVC said the country had 2,392 public charging stations.
Trevor Long, the host of the Two Blokes Talking Electric Cars podcast and an EV owner himself, highlighted this problem to Yahoo Finance after taking a road trip around New South Wales to test the country’s charging network. What Long discovered was that charging stations were not just few and far between, but some of them didn't work.
This is especially a concern in rural Australia, where Aussies usually have to travel long distances.
However, according to the DITRDCA, this is something that is in the works through a partnership between the government and the NRMA to deliver a “backbone” national EV-charging network.
“There will be 117 electric vehicle charging stations on key highway routes across Australia at an average interval of 150 kilometres, connecting all capital cities,” the spokesperson said. “The new sites will complement existing and planned EV-charging infrastructure. Site selection for new EV chargers will target known blackspots, prioritising regional and remote communities.”
Range anxiety
More than three-quarters (78 per cent) of Australians also have range anxiety – the fear of running out of battery power in the middle of a journey. If you are carrying a heavy load, such as a trailer or a caravan, and travel great distances, this is an even bigger concern.
EVs in Australia have a battery range between 250 and 650 kilometres, with many models able to travel more than 400 kilometres before they need to be recharged.
The EVC says this range can typically suit the driving requirements of many regional commuters, but stressed the importance of the availability of public charging infrastructure along the country’s major road network.
The lobby group also assures that EVs are able to tow a trailer, although the towing capacity varies depending on the make and model, as well as the weight and design of the trailer.
Fallah, however, has a different opinion.
“At the moment, electric vehicles are not ideal for towing," he said. "Adding weight to an EV significantly reduces the battery range for a vehicle, making it almost unusable for towing applications. [But] as the next generation of solid-state batteries go into mass production, this may change the equation and make EVs usable for towing purposes.”
Other common questions
Australians looking to buy an EV also have many other questions in mind, including basic information on which types of EVs are available.
There are four types of EVs:
Battery electric vehicles (BEVs), which are also known as plug-in or pure EV
Hybrid electric vehicles (HEVs), which run on a combination of petrol or diesel and battery power
Plug-in hybrid electric vehicles (PHEVs), which, like HEVs, are powered by a combination of petrol or diesel and battery power, but with the key difference that the battery can be recharged using a standard power outlet at home or in a public charging station
Hydrogen or fuel cell electric vehicles (FCEVs), which convert fuel into energy through an electrochemical reaction with hydrogen and oxygen. This however is an emerging technology in Australia and these vehicles are not yet available for everyday use
Are EV batteries environmentally friendly?
EVs are supposed to be environmentally friendly, but there is still a lot of concern about batteries ending up in landfill.
“On batteries and recycling, there has been a bit of misinformation out there about batteries, where people have conflated issues facing collection of small batteries to massive car batteries,” EVC senior manager for policy Natalie Thompson told Yahoo Finance. "We don’t have a big issue of EV batteries ending up in landfill.
“While the global market for EV battery recycling is relatively small, this is because there are very low volumes of EV batteries reaching ‘end of life'. This is expected to scale up over the next decade.
“From what we have seen, many EV batteries are expected to outlast the life of the vehicle on the road, and may be able to be refurbished or repurposed in other applications prior to recycling.”
Fallah also shared his views regarding this concern stating this was something that happened with previous iterations of EV batteries.
“Initial first-generation of EVs had questionable battery-producing practices, but brands like Tesla and BYD (Build Your Dreams) – which make a great deal of batteries for other manufacturers – have gone to extreme lengths to make the battery production as environmentally friendly as possible,” Fallah said.
“Yet, the actual environmental impact of an EV is measured by how long it remains useable and what happens when it needs to be recycled. If the industry develops techniques that can better strip and reuse the EV battery's rare-earth material resources, EVs will have a significantly lower environmental impact.”
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