EVs are still too expensive for most Australians – so why are some carmakers and the Coalition standing in the way?
We are buying more electric and plug-in hybrid cars – 8.5% of all new sales last year – and no one’s weekend has ended. But that’s barely half of the global sales proportion
The number of electric vehicles sold in Australia is increasing, but let’s be blunt: battery power cars are still unattainable for most people. Most models are expensive, and there are often long waiting lists.
Nearly 100,000 EVs and plug-in hybrid cars were sold across the country last year – 8.5% of all new sales. The good news is it was more than double the figure the previous year, and no one’s weekend ended as a result. But it was still barely half of the global sales proportion of 15.8%. In climate terms, we’re not pulling our weight.
There are now more than 90 EV models available in Australia, but many are shipped and sell in small quantities. About 70% of the EVs sold are just three models: the Tesla Model Y, Tesla Model 3 and BYD Atto 3. Among these, only the BYD (barely) sells for less than $50,000.
Given we remain a country addicted to our cars, this will need to change. Virtually all comparable countries drive more EVs and enjoy a much greater choice of models for a simple reason – they have policies that require car companies to sell a higher proportion of cleaner models.
Australia is now, belatedly, considering doing the same by introducing a vehicle emissions standard. The details are complicated, but the basic principle is that car companies have to reduce the average emissions from their fleet of new cars each year until it eventually reaches zero.
The idea is that it will encourage the auto industry to provide an increasingly significant range of clean cars, and the public – when presented with a range of affordable options equivalent to today’s combustion engine models plus the charging infrastructure needed to calm “range anxiety” – will get on board in increasing numbers.
Globally, it’s a popular approach. Among OECD countries, only Australia and Russia don’t have vehicle efficiency standards. About 60 countries have set explicit dates by which they plan to ban the sale of new cars that run on fossil fuels. As a result, many car manufacturers are increasingly cleaning up their act. Others are slower to move. We know how this goes: change is hard, and resistance from the self-interested is loud.
That applies everywhere, but it particularly applies in Australia, where the climate wars will never die. The Federal Chamber of Automotive Industries (FCAI), a major car lobby group, is campaigning against what the government is proposing, and arguing for a model that experts say would have next to no impact beyond what would happen anyway.
The chamber is being championed by the federal Coalition, which – despite claiming to support the country reaching net zero emissions by 2050 – is yet to support a climate policy that would have any impact this side of 2040.
The parts of the car industry that oppose action have plenty of evidence that resistance works. Australia has appeared on the brink of introducing vehicle efficiency standards for years, going back to a recommendation by a prime ministerial taskforce 14 years ago, but has repeatedly pulled up short.
Some highlights: in 2015, the Coalition government said it would introduce a scheme to cut emissions by 100m tonnes by 2030; a ministerial forum the following year proposed a design said to have a net benefit to the country of $14bn by 2040; the then energy minister, Josh Frydenberg, wrote an opinion piece in January 2018 comparing the inevitable ubiquitousness of the EV to the iPhone. But plans for a meaningful policy were dropped after opposition from industry and Coalition MPs.
By February 2019, the Coalition’s commitment was to release an EV strategy that cut emissions by up to 10m tonnes by 2030 – in other words, next to no change. A discussion paper was promised, but Scott Morrison won an election having opportunistically claimed EVs would “end the weekend”, and that was it for a while.
A policy finally emerged in February 2021, rebadged as a “future fuels” strategy. It included no incentives for car buyers, no requirement that companies deal with pollution and assumed transport emissions would keep increasing.
To the surprise of exactly no one, that’s proven accurate. Transport emissions are nearly 20% higher than they were in 2005, and a major drag on Australia meeting its legislated target of cutting climate pollution by 43% by 2030. Projections suggest they will keep going up unless something significant is done, and will take a while to turn around.
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Labor came to power without an overarching plan to address this, having retreated into its shell on EVs after getting belted in 2019, but promised to develop a national strategy in government. It gradually committed to introduce a vehicle efficiency standard after virtually everyone – including the parts of the car industry now arguing against the government’s plan – said the country needed one.
It was only when ministers Catherine King and Chris Bowen released a second consultation paper on the issue last month, setting out Labor’s preferred model, that the attacks began. The FCAI has led the way, launching a media blitz arguing that the cost of the most popular utes and SUVs could increase by as much as $13,000.
As Tesla – an FCAI board member – has explained, the logic behind this calculation doesn’t stand up to scrutiny. The lobby group dramatically overestimated the average pollution from existing car models. It also implied that individual cars could be directly penalised if they emitted more than average tailpipe pollution in any given year.
This isn’t how the scheme works. A company that sells a ute that emits more than the allowed average in a given year can offset that pollution by selling an EV that emits nothing. This flexibility as emissions from new cars are reduced over time is a key part of the design.
But what even are facts? Not enough to stop headlines warning of a massive increase in prices, or the Coalition calling Labor’s policy a “ute tax”. It isn’t a tax. The Grattan Institute estimates it will on average increase prices by about 1%, and that lower running costs mean consumers will quickly be better off. But the opposition is running hard with claims there will be much larger cost blowouts, and only rarely being asked to back up what it says.
As is often the case with debate about climate policy in Australia, the conversation is regularly framed as though nothing much has to change. But the data tells us otherwise – not least because fuel prices are through the roof, and an estimated 11,000 Australians die prematurely each year due to pollution from fossil fuel vehicles.
Making EVs more affordable and available is only a part of the answer to that, but it’s a pretty compelling case – if it’s heard.