Report recognises urgent need for national plan, as the rest of the world powers ahead

Road to nowhere: why Australia lags behind in electric vehicle revolution

When the Senate select committee on electric cars released its long-awaited report on Wednesday, it announced Australia was “on the cusp” of a change not seen since the advent of the internal combustion engine.

It’s not the first time public figures have claimed an electric car revolution is imminent and while the report did not recommend brash action, it offered a moment of bipartisan recognition that a lack of government action to date has left Australia lagging behind the rest of the world.

Despite fewer cars selling around the world last year, electric cars have kept rolling out of showrooms. More than 2m electric cars were sold in 2018, with China alone accounting for 1.26m sales.

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But while the rest of the world has been transitioning to the new technology, in 2017 Australians bought just 2,284 vehicles, according to the Electric Vehicle Council. Numbers are not currently available for 2018.

The organisation’s CEO, Behyad Jafari, says the good news is that this represents a 68% increase from 2016, a trend he expects to continue into 2019 as lower-cost cars like the Hyundai Ionic and new-model Nissan Leaf hit the market for under $50,000.

The bad news is that under the most conservative projections by the Clean Energy Finance Corporation, it will take until 2027 for the uptake of electric cars to become significant.

“The entire world is moving in this direction,” says Jafari. “It’s like Steve Jobs telling you that in 20 years’ time he’s going to create an iPhone and you do nothing about it.

“At the moment we are nine to 10 years behind the rest of the world in the take-up of electric vehicles. Do we want cleaner roads? Do we want safer roads? A better environment? And the other thing is, do we want to get a slice of the pie?

“We have to ask ourselves: do we continue to remain behind?”

There are currently 17m registered cars on Australian roads which the Climate Council says represent the second biggest source of greenhouse gas pollution in the country.

Each year Australian cars collectively produce roughly the same emissions as Queensland’s entire coal and gas-fired electricity supply, making decarbonising Australia’s vehicle fleet a must to combat climate change.

There is no other national government that doesn’t bother having a plan, or consider knowing what to do next. Behyad Jafari, Electric Vehicle Council

Governments elsewhere have generally addressed the issue by encouraging more cars on the road to run off electricity and then working to “green” the power sources which provide that electricity.

In Australia, work around managing the transition towards electric cars has been marred by inaction despite high-level support for electric cars from some among the current government.

At the start of 2018, the now treasurer Josh Frydenberg penned an opinion piece as the environment minister arguing that “a global revolution in electric vehicles is under way”. His enthusiasm was not matched by conservative backbenchers.

The division at a federal level has so far meant little has been done to introduce a cohesive plan or national strategy, leaving state governments, local authorities and industry to go it alone amid a lack of resources, limited authority and deep uncertainty.

Sometimes this has made for big headlines that end in a whimper. Early last year, Sanjeev Gupta, the British billionaire investor, announced he wanted to take over the former Holden factory at Elizabeth, South Australia and cannibalise its old machinery to build electric cars.

When Gupta failed to get traction, he said he would instead look to Victoria. There have been no updates since.

Dr Mark Dean, a research associate with the Australian Industrial Transformation Institute at Flinders University, is not surprised.

It is extremely risky and expensive to build a car factory capable of producing a whole car from scratch, as each plant relies on a vast network of suppliers and must produce in large volumes to turn a profit.

“Automotive manufacturing is not a Lego kit,” Dean said. “You don’t just disassemble the factories and reassemble them when you need to use them again.”

With Australia now wholly reliant on imports, the country is at the mercy of global markets. And as there are currently only a finite number of electric cars manufactured worldwide each year, car companies must think carefully about where to sell their cars, how many to send and how to price them.

This means Australia must compete for a share of global production against countries that have clear policy positions on climate change and electric cars.

Around the world, China, Austria, Denmark, France, Germany, India, Ireland, Japan, the Netherlands, Norway, Portugal, South Korea, Spain, New Zealand and the UK have all acted with various degrees of intervention to encourage their take-up.

Norway is currently the world leader, with almost two in five cars on its roads either electric or hybrid-electric vehicles, according to the International Energy Agency.

Closer to home, New Zealand has set a target to have 64,000 electric cars by 2021. Though New Zealand has had issues with imported used electric cars, as of December 2018, 11,748 electric cars were on its roads in a country of 4.7 million.

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By contrast, on EVC figures, just 7,341 electric cars had sold in Australia as of 2017.

The introduction of a similar aspirational target for Australia’s road fleet was among the 17 recommendations made by the Senate committee’s report.

The committee may have shied away from committing to changes to the luxury car tax, but other recommendations included targets for including electric cars in the government fleet and even a Formula E championship race to encourage consumer interest.

The first recommendation, however, was the most critical. Though it offered no specifics, it recognised an urgent need for a clear, national plan, a point which Jafari says is an acknowledgement at least that the status quo is unsustainable.

“There is no other national government that doesn’t bother having a plan or consider knowing what to do next,” Jafari says. “If you come into the conversation saying ‘we can’t do it’, then it isn’t going to happen.

“If you come in saying that we’re going to work hard, we may not achieve 100% of what we do, but we’ll still try, you’re going to get somewhere.”