Grassroots solar energy advocacy group Solar Citizens says the key to getting cheaper EVs into Australia is introducing fuel efficiency standards.
While electric vehicles are (still slowly) becoming a more common sight on Australian roads, we’re a bit of a backwater compared to some other countries. 10% of new cars sold globally are electric, but in Australia just 2% of car sales are electric vehicles.
Some of the slow uptake can be attributed to sticker shock. While an EV can save a bunch of bucks over its life through fuel and maintenance savings, a purchase involves significant up-front outlay – even with subsidies. Solar Citizens warns without mandatory fuel efficiency standards, there won’t be enough affordable electric cars available here.
“During this cost of living crisis, more Australians are looking for ways to slash their rising household bills and demand for EVs has never been higher,” said Ajaya Haikerwal, Clean Transport Campaigner at Solar Citizens. “But there’s only a limited number of affordable EVs available to Australian consumers – we have a supply issue, and without fuel efficiency standards car-makers will continue to sell their affordable EVs elsewhere.”
The supply issue goes a bit beyond that as the impact extends to more expensive electric cars too, but affordability is certainly a major issue.
The cheapest electric car available here was the MG ZS EV at $42,990 plus on-road costs before any subsidies that may have applied. The new ZS EV Excite that will replace it this month is $46,990. The BYD Atto will be a bit north of $44,000 and we won’t see any here until at least August.
The cheapest electric cars in Australia remain out of reach of many and even if you have the cash, getting your hands on an EV is another challenge.
How Fuel Efficiency Standards Can Improve EV Availability
Back in 2019 – which seems a lifetime ago given the events since – Federal Labor announced the party would introduce fuel efficiency standards for light vehicles to be phased in by 2025 if Labor was elected that year. The reaction, as SQ’s Ronald put it at the time:
“.. some people completely lost their shit.”
Among those who lost at least some of their shit1 and caused others to follow was …drum roll… the Liberal Party, which called it “Labor’s Car Tax”. Then PM-Scott Morrison, well-known for his shit-distribution and amplification prowess, said Labor’s EV policy would also “end the weekend”. As Ronald also pointed out, weekends still exist in those countries with such standards.
And it wouldn’t have been a tax.
Fuel efficiency standards usually place a responsibility on manufacturers to sell enough low emission vehicles in the country where they apply so the average emissions of what they sell across their fleets will meet the benchmark set.
Automakers can still sell high-emissions, petrol guzzling monstrosities that seem to be particularly favoured by folks who really don’t need them, but this supply needs to be offset by more low-emission petrol-sippers in order to avoid a hefty penalty. Or better still, a bunch of zero-emissions electric cars that chew no go-juice at all. And the cheaper those cars are, the more that will be sold and the greater the offset.
Australia wouldn’t be the first country to introduce fuel-efficiency standards – it wouldn’t even be an early adopter. There are dozens of countries with fuel efficiency standards of one type or another in place. Manufacturers supplying vehicles into those countries have stronger incentive sell electric vehicles and overlook countries such as Australia, or make this market a lower priority.
Labor didn’t go to the recent election with fuel efficiency standards in its kit. But perhaps it’s time to add it back in.
“Right now Australia is facing a triple whammy: a cost of living crisis and an energy crisis. And on top of that, we need to address the climate crisis,” said Mr. Haikerwal. “It’s a unique moment for our new federal government to address all three, by implementing fuel efficiency standards to increase the affordability of EVs, which in turn will reduce our rapidly rising transport sector emissions.”
As automakers ramp up EV production, the flow of cheaper electric cars will still happen without fuel efficiency standards in the (hopefully not-too-distant) future. But introduction sooner rather than later or never will be useful in accelerating Australia’s transition from an EV laggard and help meet the Federal Government’s forecast of electric vehicles comprising 89 percent of new car sales by 2030.
Footnotes
- The Liberals had it in surplus anyway, so the loss was hardly felt. ↩
About Michael Bloch
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All cars are hard to get hold of at the moment, and even if you want to purchase an EV you just get put on a waiting list.
Fuel efficiency standards at this point would just increase the difficulty of getting anything, ICE or EV.
Passenger car emissions count for 8% of Australia’s total emissions, i think money and effort could be directed to areas that would make a bigger difference for now, and maybe revisit it in a few years when vehicle availability is hopefully better.
Jamie – you miss the point. The most effective way to increase the availability of low emission vehicles is to introduce emission standards with penalties.
Increasing the demand on a finite resource dose not make it more available. A lot of countries around the world are wanting more EV’s but there are only so many to go around.
That is why there are currently waiting lines to get them.
There is also the fact that you have to be a mid to high income earner to afford one, as they are all premium cars, and no budget versions are currently being sold. Even the cheapest MG EV far exceeds any non EV MG for sale.
My wife is currently looking for a new car, and while an EV would be a great fit, they are just currently out of my range(pun Intended) even if they were available.
I will be suggesting hybrids they are affordable at about a 2k premium in the toyota range.
Tried posting a reply but the mods didn’t like my facts or something. Lets see if a shorter\different take gets past:
The EU forces car manufacturers to give them priority by threatening them with bankruptcy level fines if their EV to regular vehicle ratio slides.
Australia, being on the opposite side of the planet, with land area greater than the EU, but a population comparable to Romania + Bulgaria, simply isn’t a priority market. And for Japanese car manufacturers, figures suggest the US and China each offer 10x the sales whilst Australia is about on par with Africa.
As James notes, even the MG ZS EV mentioned in this piece – which is actually a Chinese vehicle, is far more expensive than is reasonable.
Per Canstar Blue the average new vehicle in Australia is $40,729 – only slightly cheaper than the aforesaid Chinese MG ZS EV, but the average small car is $25K. Households with incomes of less than $80K spend an average of low $30K when purchasing new vehicles whereas households with incomes over $120K spend an average of just over $47K, or about the price of the cheapest EVs around.
Any action by Labor to shift the costs of EVs to low income households will not be well received by the public.
I won’t approve comments that refer to EU emission regulations as fascism because actual fascists lobbed shrapnel into my grandmother. I demand accuracy in these matters.
James,
“…i think money and effort could be directed to areas that would make a bigger difference for now…”
Like ensuring better energy/fuel security for Australia’s agribusinesses and more resilient food supply chains. IMO, maintaining Australia’s food security should be a top priority.
“…and maybe revisit it in a few years when vehicle availability is hopefully better.”
I’d suggest that’s wishful thinking – see my comments below: https://www.solarquotes.com.au/blog/fuel-efficiency-standards-mb2539/#comment-1479148
Michael Bloch,
“As automakers ramp up EV production, the flow of cheaper electric cars will still happen without fuel efficiency standards in the (hopefully not-too-distant) future. But introduction sooner rather than later or never will be useful in accelerating Australia’s transition from an EV laggard and help meet the Federal Government’s forecast of electric vehicles comprising 89 percent of new car sales by 2030.”
Accumulating evidence/data I see indicates the era of cheap and abundant crude oil and petroleum fuels has ended forever. IMO, we are now in a global post- ‘peak oil’ supply regime. We/humanity need to leave oil/petroleum before it leaves us. IMO, introducing fuel efficiency standards into Australia is now futile – too little, too late.
Global diesel fuel production peaked in 2018 (before the COVID pandemic and before the Russian invasion). From 2018 to mid 2021, global diesel production had declined from around 26 Mb/d to below 23 Mb/d, representing a decline of 12%.
https://crashoil.blogspot.com/2021/11/el-pico-del-diesel-edicion-de-2021.html
The price of petrol in Australia’s five largest cities (Sydney, Melbourne, Brisbane, Adelaide & Perth) has now risen above the price before the fuel excise cut of 22.1 cents per litre was implemented (for the period 30 Mar to 28 Sep 2022).
https://twitter.com/crudeoilpeak/status/1543138431047729153/photo/1
I would not be at all surprised to see fuel prices in Australia rising further, possibly around $3/litre by the end of this year. I think diesel fuel prices will likely get to $3/litre sooner than petrol.
https://www.news.com.au/finance/money/costs/petrol-prices-look-set-to-skyrocket-as-three-key-factors-combine/news-story/8b0da2ee498c86d4bec183448a36f030
Tom Quinn tweeted a thread on Jun 28 about scenarios on how long it could take Australia to transition its vehicle fleet away from petroleum fuel dependency.
https://twitter.com/tomdquinn/status/1541635182398427136
At 99% EV sales by 2030, even at this pace, it’s suggested 80% of Australia’s vehicle fleet would still run on fossil fuels. What will the price of fuel be then in 2030 to operate them? $5/litre? $10? $20? Would there be fuel rationing?
IMO, introducing fuel efficiency standards for Australia (probably by 2025 at the earliest?) would now be of little benefit. I think most people simply don’t appreciate how quickly the global petroleum fuel supply and prices situation will likely change in this decade.
IMO, long delivery times for BEVs will likely be commonplace due to high demand outstripping available supplies.
Geoff, “… most people simply don’t appreciate how quickly the global petroleum fuel supply and prices situation will likely change in this decade” or most people don’t appreciate how quickly the global petroleum supply is being manipulated?
Biden is publically calling for companies that control gas stations and gas prices to drop the price. He’s completely ignoring inflation, global concerns, possible shortages and trade embargoes I.e. Russia, his own cancellation of the Keystone oil pipeline and other similar actions, a crash in Bureau of Land Management permits for drilling, and now there’s news the EPA is targeting the Permian Basin which supplies 40% of US production.
All in all it seems like Biden is trying to publically shame those in the oil and gas industry – to use US terms, whilst curtailing their ability to expand to new areas or increase operations, and even limit current operations. If supply gets forcibly bottlenecked, even just the threat of it, will see US prices spike, and as the US goes, so will Australia.
Is it worth pointing out Biden is spruiking EVs too, or that one of the Democrats was boasting not so long ago about how her EV allows her to ignore fuel issues and price rises, but failed to address the fact she likely spent more than the average yearly income of her electorate on it?
“…she likely spent more than the average yearly income of her electorate on it?”
You are talking about a country where 48% of voters literally voted for Donald Trump. A man who used to use a gold plated Boeing 757 as a private plane.
A communist revolution is probably still a fair way off in the US.
George Kaplan,
“Biden is publically calling for companies that control gas stations and gas prices to drop the price.”
Biden (nor anyone else) cannot change US tight oil and shale gas geology.
See my comments to you Dec 9: https://www.solarquotes.com.au/blog/sa-electric-car-subsidies-mb2266/#comment-1331338
US petroleum geologist Art Berman tweeted on May 19 (including graph):
https://twitter.com/aeberman12/status/1526937838905921536
All in all it seems like Biden is trying to publically shame those in the oil and gas industry – to use US terms, whilst curtailing their ability to expand to new areas or increase operations, and even limit current operations.
IMO, Biden is shaming the oil and gas industry for making super-massive profits at the expense of US consumers, and not utilizing many already approved drilling sites. It seems to me that you are criticizing him for that; is that what you are doing, George? ?♂️
Bloomberg reported on Mar 9:
https://www.bloomberg.com/news/articles/2022-03-08/shale-giants-eog-devon-hold-most-untapped-u-s-drilling-permits
US shale oil is a lighter crude not suitable for producing diesel and higher octane gasoline fuels.
https://www.desmog.com/2018/04/24/octane-surprising-reason-shale-oil-makes-poor-fuel-high-tech-cars-and-trucks/
“Is it worth pointing out Biden is spruiking EVs too…”
Data I see indicates nearly all of the high quality US ‘tight’ shale oil sites have been exploited. What’s remaining is increasingly less productive and increasingly more costly to exploit. It makes sense to me for the US (and more importantly for Australia as a net oil/petroleum importer) to find alternative transport energy solutions in an inevitable global post- ‘peak oil’ supply regime, and fast.