Evolving an entire transportation industry is no small feat. State and territory governments, leading energy organisations and experts have been working in recent years to ensure Australia’s passenger transport future is electric, but there is a piece missing from the puzzle. In April 2023, the Federal Government, after long industry and consumer consultation, released the country’s first National Electric Vehicle Strategy, finally outlining the work ahead to legislate a fuel efficiency standard and more, the strategy shares Australia’s plan to grow the uptake of electric vehicles (EVs).
With determined outcomes and promises of federal, state, and territory collaboration, the strategy and the development of fuel efficiency standards will help propel Australia’s transport sector forward and support the wellbeing of Australians. Not only will the strategy help reduce transport emissions and make it easier to buy and charge EVs across the country, it will help save Australians money on ever-rising petrol prices.
The strategy objectives
In 2022, EVs made up only 3.8 per cent of new car sales. Compared to the 15 per cent in the UK and 17 per cent in the EU, Australia is far behind. Individual states and territories have already set their targets, including the Queensland Government, which is aiming for EVs to be 50 per cent of new passenger vehicles by 2030.
Set to help ease purchasing and access barriers for EVs across the country, the objectives of the strategy are threefold; supply, demand, and systems and infrastructure. The three pillars are set to be supported with both new initiatives alongside ones already established.
Fuel efficiency standards
The first pillar concerns increasing the access of affordable EVs by developing Australia’s first fuel efficiency standards for new light vehicles and supporting recycling, reuse and stewardship initiatives for EVs and other large format batteries.
Fuel efficiency standards limit the amount of carbon dioxide vehicles are permitted to emit. Australia doesn’t currently have standards and cars on Australian roads, on average, produce significantly higher emissions compared to the rest of the world.
This also means that the global car market does not see supplying Australia with EVs as a priority in comparison to countries that already have standards established. The Federal Government said a “well-designed standard will help reduce fuel costs for Australian motorists and improve the supply and variety of EVs coming into the Australian market”.
Due to the lack of standards, there has also been less pressure on the Australian transport sector to decarbonise and introduce low-emission vehicles, leading to lower EV interest and continued higher emissions.
The Electric Vehicle Council (EVC), Climate Council and Smart Energy Council, among others, have been calling for a standard to be implemented for years. Following the publication of the strategy, the Smart Energy Council said there was no time to wait, and called for it to be implemented as soon as possible.
“The longer these standards are delayed, the greater the emissions reduction task and the longer Australians will have to wait for better electric vehicle supply and cheaper fuel bills,” a statement said.
“If the Federal Government had introduced fuel efficiency standards in 2016, Australia would have saved more than $6 billion in fuel costs, and avoided 4,000 megalitres of imported fuel and nine million tonnes of greenhouse gas emissions – similar to the emissions footprint from domestic aviation.”
Climate Council Head of Advocacy, Dr Jennifer Rayner, said the lack of standards has caused Australia to become a “dumping ground for expensive, polluting, petrol-guzzling vehicles”.
“Strong fuel efficiency standards are the key to unlocking supply of the cleanest and cheapest to-run cars for Australia – including electric ones,” Dr Rayner said. “The Federal Government and industry will be driving with a flat tyre in trying to deliver the rest of the National Electric Vehicle Strategy if we don’t get these in place soon.”
The EVC, in its strategy response paper, said the Federal Government “must model the emissions reduction that will be delivered by the [strategy design] and how this aligns with its floor (minimum) targets of 43 per cent by 2030, and net zero by 2050”.
With its own modelling completed in June, the EVC said if the strategy was consistent with matching the US and EU this decade, it could expect to “deliver well over $10 billion in total net benefits by 2035, with a cost benefit ratio of greater than 2.5”.
EVC CEO, Behyad Jafari, said getting the fuel efficiency standards right will put “Australia on the path to a brighter transport future for decades ahead” and has the potential to unlock significant domestic manufacturing and opportunities.
Three lane way forward
Creating a fuel efficiency standard and ensuring supply is supported is only part of the challenge. Resources, systems and infrastructure need to be put in place to support the rapid EV uptake.
Many companies across the country are already investing in their own charging stations and infrastructure, including AGL, Ampol, Evie Networks, Origin and bp, and the continued industry support will also complement Australia’s uptake of EVs.
The Federal Government said its work towards the infrastructure goal will include its own new initiatives on a national mapping tool for optimal investment and deployment of EV charging infrastructure nationwide.
Australian residents without their own roof are also supported in the strategy, with the Federal Government set to undertake new research to enable the EV uptake for residents of existing multiresidential buildings.
By building the EV supply, and backing them up with proper systems and infrastructure, the Federal Government’s already established acts and legislation can better support the demand for EVs.
This includes the Driving the Nation Fund, New Energy Apprenticeships and New Energy Skills Program, nationwide government collaboration to ready the electricity grids, the 117 EV charging highway initiative, Electric Car Discount, EV purchasing incentives and subsidies, as well as the Federal Government’s zero interest loans.
Part of the push to ensure a fast implementation of fuel efficiency standards has been the significant call for strong penalties for suppliers and manufactures who do not reach vehicle emission guidelines.
As part of fuel efficiency standards, a supplier which beats the standard by selling more efficient vehicles and low to zero emission vehicles (LZEVs), will be rewarded – usually through ‘credits’. It’s important to note that new standards only impact new vehicles, and do not include those already on the road.
The Smart Energy Council and EVC said penalties for not reaching the guidelines should exceed the cost of standard compliance, and roughly align with the penalties seen in the US, Europe, and New Zealand. Further penalty suggestions from the Smart Energy Council included “mandatory public announcement of non-compliance, and exclusion from Government fleet purchases”.
The EVC has recommended greater transparency to allow for a smoother transition for consumers and industry stating, “fewer concessions/bonus credits will provide greater visibility of the true emissions rates of new vehicles for both car makers and consumers”.
The road ahead
The Federal Government has outlined the plan ahead for proper integration of EVs into Australia to include:
- Delivering nationally consistent and, where possible, internationally aligned standards and communications protocols for EV supply equipment (EVSE), cybersecurity, and smart functionality
- A common mechanism for EVSE data sharing
- A nationally aligned Service and Installation Rules
- Streamlining network connection processes for consumer energy resources, including EVSE
- The Net Zero Government Initiative and a new goal of 100 per cent zero-emission government vehicle fleet by 2035
The Federal Electric Vehicle Strategy has a long, winding road ahead to legislate change. Reducing the upfront costs of EVs, ensuring effective and efficient charging infrastructure across the country, and making clear and firm fuel efficiency standards will help accelerate Australia’s transition to an electric future and ensure we can match global pace.