Australia’s Federal Government has released the country’s first national future fuels and vehicles strategy to support 1.7 million zero emissions vehicles on Australia’s roads by the end of the decade.
The strategy aims to accelerate the adoption of electric vehicles and throws another $178 million into the government’s Future Fuels Fund, topping it up to $250 million for investment to encourage low emission vehicles.
It is designed to enhance consumer choice, create jobs and reduce emissions and is expected to deliver on last month’s Emissions Reduction Plan, which provides a pathway to achieving net zero emissions by 2050.
No subsidies or incentives
Interestingly, the strategy does not employ subsidies, tax incentives, sales targets or minimum fuel emission standards to make electric vehicles more affordable.
It believes that reducing the total cost of ownership through subsidies would not represent “value for the taxpayer”, particularly as industry is rapidly working on technological developments to make battery electric vehicles cheaper.
According to Future Fuels Fund statistics, subsidising cars for private sales would cost taxpayers $195 to $747 per tonne of carbon dioxide equivalent, depending on the vehicle type and usage.
The government said it did not present value for money when compared to Emissions Reduction Fund pricing of $16 per tonne of carbon emitted.
Driving down prices
Prime Minister Scott Morrison said the government would instead rely on industry co-investments relating to the development of new technologies to help drive down ticket prices and make electric vehicles a more cost-competitive option.
This will include the funding of charging stations at more than 400 businesses, 50,000 households and 1,000 public access points, in a bid to encourage more people to make the transition.
“We will not be forcing Australians out of the car they want to drive or penalising those who can least afford it through bans or taxes,” Mr Morrison said.
“Instead, we will work to drive down the cost of low and zero emission vehicles, and enhance consumer choice.”
Electric Vehicles Council chief executive Behyad Jafari criticised the strategy as “lacking ambition” at a time when Australian motorists need incentives to switch to electric.
“There is an element of a good plan there [but] unfortunately, that is only about 5% of what is needed,” he said.
“It is not one that tries to actually increase the uptake of electric vehicles.”
Without the right incentives, the market would struggle to take off.
“What every expert in the entire industry has [called for is] introducing strict fuel efficiency standards that make cars cheaper to run, getting better cars to Australia in the first place and rebates to make cars cheaper to buy,” Mr Jafari said.
“We have been waiting two years for this policy … every other country put their policies out over a decade ago now, so it is just far too little too late.”
The new strategy is a relative change of heart for the Morrison Government, which demonised Labor’s policy on electric cars before the 2019 election.
That policy aimed for electric vehicles to comprise 50% of all new car sales nationwide by 2030.
The government by comparison, had assumed that electric vehicles would make up between a quarter and half of all new car sales by the same year.
“If you go and buy an electric car, well obviously you don’t pay the fuel excise, what is that going to mean for that revenue stream and what’s the cost of that?” Mr Morrison said at the time.
“What about all these charging stations, how much is that going to cost? … if you have an electric car and you live in an apartment, are you going to run the extension cord down from your fourth-floor window?”
He also attacked the party for underestimating the costs involved in purchasing an electric vehicle.
“The cheapest car you can currently buy, as an electric vehicle, including all on road costs and the rest of it, is about $45,000 to $50,000 a year,” he said.
“That is the cheapest car [Labor] wants to make available to you to buy in the future, and I’ll tell you what – it’s not going to tow your trailer, it’s not going to tow your boat, it’s not going to get you out to your favourite camping spot with your family.”
At the launch of the future fuels and vehicles strategy this week in Melbourne, Mr Morrison said his stance in 2019 was anti-Labor and not anti-electric.
“I just have a problem with governments telling people what to do about what vehicles they should drive and where they can drive them, which is what [Labor’s] plan was,” he said.
“I still don’t agree with it, and our policy takes a very different approach.”
He said there had been a “massive change in technology” in the years since he made those comments.
“Technology will continue to move forward [and] Australians will make those decisions,” he said.
“I want to let Australians make their own choices and have policies to support them [which include] electric vehicles.”