The number of electric vehicles sold in Australia jumped 67% from 2016 to 2017. And with more – and more affordable – electric vehicles set to hit the market within the next year or two, the future of electric vehicles in Australia is looking bright.
In a recent survey, a whopping 45% of Australians said they’d consider buying an electric vehicle. Some even said they’d consider paying more for an electric vehicle over an internal combustion engine vehicle (that’s just a regular, gas-guzzling car to you and me).
The actual sales of electric vehicles in Australia, however, tell a rather different story.
In 2017, just 0.1% of total car sales in Australia were electric. In 2018, that number doubled to 0.2%. Of course, that’s progress, but there’s clearly something preventing those 45% of Australians going all-in on the cars of the future. So what is it?
“Model availability and cost,” says Sarah Fumei, a project manager at ClimateWorks, an organisation founded in 2009 by the Myer Foundation and Monash University to help translate research on climate change into action. “There were about 23 models of electric vehicles available in Australia in 2017, but only four of them were priced lower than $60,000.”
Sarah has co-authored two reports on electric vehicles for ClimateWorks on behalf of the Electric Vehicle Council – a feat that makes her one of the leading experts on the future of electric vehicles in the country.
The report, ‘The state of electric vehicles in Australia’, forms part of ClimateWorks’ mission to catalyse Australia towards net zero emissions by 2050. Produced alongside the Electric Vehicle Council, the report identifies actual electric vehicle uptake in Australia, the barriers preventing electric vehicle uptake, and assesses what can be done to help overcome those barriers.
As Sarah puts it, we currently have a bit of a “chicken and egg” situation on our hands. With a small electric vehicle market in Australia, manufacturers are reluctant to release electric vehicles down under. And with the electric car options quite limited (and expensive) for consumers, it’s difficult for the market to gain traction. “We need more models available in the lower price range to really drive that market,” says Sarah.
The desire for luxury electric cars, whether you’ve read the report or not, is evident – you need only walk down the street in any major Australian city or town and a Tesla will roll by before too long. The trouble up until now has been that purchasing a luxury electric vehicle just isn’t viable for the everyday Australian. But things are looking up. “The market is improving,” says Sarah. “There have been four new electric cars released onto the Australian market since we wrote the report, two of which are priced at less than $60,000. There at least five more electric vehicle models introduced to Australia in the next 18 months, and three of those are expected to be below the $60,000 mark.”
The ClimateWorks report also identified that charging infrastructure, or a perceived lack of infrastructure, was another reason some Australians were reluctant to switch to electric. And while Sarah recognises that many Australians are wary of the potential difficulty of charging electric vehicles, she doesn’t see it as an issue.
“In most cases, you can plug your vehicle in overnight, to a normal plug, and it will charge and can be used the next morning,” she says. “Most electric car owners charge their cars at home or at work, and the average Australian commute can be easily covered by the majority of electric vehicles on the market. The charging side of things is perceived as a big issue, but it’s really not.”
To help hit net zero emissions by 2050, part of Australia’s full climate change commitments under the Paris Agreement, Australia’s passenger fleet will need to stop producing greenhouse gas emissions, which can be achieved by switching to electric vehicles. To make this possible, we’d need 39% of vehicles to be electric by 2030. As more renewables come into the grid, this would potentially save nine mega tonnes (nine million tonnes) of emissions. Clearly, there’s work to be done.
Most analysts seem to agree that electric vehicles will reach purchase price parity – that is, cost the same as current non-electric cars – at some point between 2025 and 2030. And there’s a lot the government can do to help us get there too – like providing a financial incentive for those wishing to purchase electric vehicles, or introducing vehicle emissions standards across manufacturers’ fleets. “This would be a great jump-start for the market, and encourage manufacturers to bring more vehicles into Australia,” says Sarah.
In lieu of government help at the top level, some state governments and local councils have taken matters into their own hands. For example, the City of Adelaide, in a bid to become the world’s first carbon neutral city, is investing heavily in electric vehicle charging infrastructure and is building the world’s first electric vehicle parking system.
At Bank Australia, we’re supporting customers who are keen to get an electric vehicle. That’s why we’ve recently introduced a new feature that provides a 1% discount on the applicable fixed interest rate of a loan taken out for an electric vehicle, and we won’t charge an establishment fee if your car is an electric or plugin hybrid vehicle.
“While we’ve had great feedback about lower fees for fuel efficient cars and our carbon offset program, our customers told us they wanted us to do more to help them make the move to electric and hybrid vehicles,” said Bank Australia Product Manager Travis Morgan
“One way we can do this is to provide a cheaper rate for people making the switch.”
If you are one of the 45 percent that would consider purchasing an electric vehicle, know that the tide is changing. With several new models under $60,000 being released before the end of the year – including the Hyundai Kona, the Nissan LEAD Gen3; and the Tesla Model 3 – and the ability to charge your car at the flick of a standard household power plug, the barriers for you to help hit Australia’s zero emissions target by 2050 through your choice of car are quickly dissolving.