National Electric Vehicle Strategy: consultation paper

SUBMISSION TO THE NATIONAL EV STRATEGY
31 OCTOBER 2022

1. Executive summary

Australia’s transition to a net zero economy is underway.

The ATA supports the end to the climate wars and the passage of climate legislation which sets in place Australia’s commitment to net zero emissions by 2050 and reducing carbon emissions by 43 per cent by 2030. The development of the National Electric Vehicle Strategy will support Australia to realise this ambition.

Achieving net zero emissions is critical to reducing the impacts of climate change on our people and our economy.

As critical as meeting our climate goals is, net zero emissions are also an economic transition.

The Productivity Commission has stated—

The path of decarbonisation will be one of the most significant structural changes in
Australian economic history. How we handle the twin challenges of efficient, low cost
abatement at the same time as fostering and adopting emerging (and rapidly evolving)
technologies will have major implications for productivity growth and living standards. 1

Freight and trucking are vital to the Australian economy. We’ve seen in recent years just how critical trucking is to modern Australia – right down to the accessibility of essentials such as toilet paper.

Growth in truck greenhouse emissions is being driven by growth in the economy. Zero emission trucks – both battery electric vehicles and hydrogen fuel cell electric vehicles
– can enable our economy to keep growing whilst we bring down emissions.

Zero emission trucks will deliver lower costs, lower emissions and more choice.

Without a national electric vehicle strategy trucking operators have been locked into existing vehicle technology, with higher running costs and higher emissions. Existing regulatory, financial and infrastructure barriers are preventing a faster adoption of zero emission trucks.

We know that Australia’s trucking industry can reduce emissions whilst driving a growing economy because we have done it before. Australia has achieved a considerable reduction in noxious emissions at the same time as the size of the truck fleet and the kilometres travelled have increased substantially. This has been made possible by the investment decisions of industry – often well ahead of government regulation – to deliver both cleaner air and economic growth.

1 Productivity Commission. 5-year Productivity Inquiry: The Key to Prosperity. Interim Report. July 2022. 56.
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Whilst the trucking industry has now begun the transition to zero emissions – getting the policy framework right will help to realise this transition with the ambition of meeting Australia’s climate goals.

2. Summary of recommendations

Recommendation 1
The National Electric Vehicle Strategy should prioritise the accelerated take up of zero emission trucks.

Recommendation 2
The Australian Government should sign the Global Memorandum of Understanding (MoU) for Zero Emission Medium and Heavy Duty Vehicles to establish clear climate leadership and momentum for the trucking industry.

Recommendation 3
The Australian Government should implement an immediate reform package for zero emission truck vehicle design rules, including increased width and a zero emission heavy vehicle mass concession, and commit to further reform by 2030.

Recommendation 4
The Australian Government should implement a truck purchase price incentive for 50 per cent of the higher price differential for zero emission truck models.

Recommendation 5
The National Electric Vehicle Strategy should prioritise investment in electric truck recharging infrastructure and hydrogen truck refuelling infrastructure and by 2030 ensure that zero emission truck energy infrastructure is accessible across the entire National Land
Transport Network.

Recommendation 6
The Australian Government should develop a national road user charging scheme which ensures sustainable and fair funding for the road network as Australia transitions to zero emission vehicles.
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3. Decarbonising transport

Passenger cars and light commercial vehicles

The largest contributors to road transport greenhouse emissions are passenger cars and light commercial vehicles – the two road transport sectors most suited to electric vehicle adoption.

Figure 1: Road transport greenhouse gas emissions2

50 000

45 000

40 000
Gigagrams of CO2 equivalent

35 000

30 000

25 000

20 000

15 000

10 000

5 000

0
1989-90 1994-95 2000-01 2005-06 2010-11 2015-16 2020-21

Cars Light commercial vehicles Articulated trucks
Rigid trucks Buses Motorcycles

The decarbonisation of light vehicles, including light commercial vehicles, should be a clear priority for the National Electric Vehicle Strategy.

Whilst the focus of this submission and the ATA is predominantly on heavy vehicles, trucking and logistics companies do utilise light vehicles, especially for urban last mile deliveries.
Accelerating light electric vehicle take up will be vital to achieving net zero transport emissions – and provide industry with vehicles with lower running costs.

Both the Electric Vehicle Council, and the Federal Chamber of Automotive Industries, have supported implementation of fuel efficiency or CO2 standards for light vehicles.

The ATA supports light vehicle fuel efficiency standards in line with the United States, New
Zealand and the European Union.

2 BITRE. Australian Infrastructure and Transport Statistics: Yearbook 2021. December 2021. Table 11.5. 226.
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Heavy vehicles

Whilst there is a clear need to focus on reducing light vehicle emissions – heavy vehicles must not be excluded from the national electric vehicle strategy.

Growth in truck emissions has been driven by growth in the economy and the expanding size of the freight task.

Figure 2: Percentage growth in commercial vehicle emissions and freight task since 2010 3
30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00%
Articulated trucks Rigid trucks Light commercial vehicles

Emissions Freight task

Unlike light commercial and rigid trucks, the growth in articulated truck emissions is slightly lower than the increase in the size of the articulated freight task. The carbon intensity of articulated trucks – in terms of the size of the freight task – is improving.

This illustrates that investments by trucking businesses in newer, cleaner trucks and in more productive vehicle combinations – which reduces the number of individual truck trips – have a positive impact.

Governments should further prioritise the upgrading and gazettal of road routes to enable access for high productivity freight vehicles.

Additionally, the investment by industry in cleaner trucks with the latest emission standards has achieved a remarkable reduction in noxious emissions. Over the last 30 years, noxious emissions have been dramatically reduced at the same time as the size of the heavy vehicle fleet and the number of kilometres driven have increased substantially.

3
ATA assessment of table 6.6 and 11.5 in BITRE. 2021.
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Figure 3: Percentage change in heavy vehicle noxious emissions and fleet size since 1990 4
100%

80%

60%

40%

20%

0%
Carbon Hydrocarbon Particulate mass Nitrogen oxide Heavy vehicle Heavy vehicle
-20% monoxide emissions emissions emissions fleet kilometres
emissions
-40%

-60%

-80%

-100%

The Government’s recent decision to mandate Euro VI emission standards will enable industry to continue this leadership for cleaner air.

How electric and zero emission trucks can reduce emissions

Achieving net zero transport will require the link between growth in the freight task with growth in transport emissions to be broken. Zero emission trucks will be critical to enabling this link to be broken. Multiple studies and reports have shown that zero emission trucks can reduce transport greenhouse emissions.

4BITRE estimate in Department of Infrastructure, Transport, Regional Development and Communications. Heavy vehicle emission standards for cleaner air. Final regulation impact statement. December 2021. 13.
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Figure 4: Greenhouse gas emissions impact by zero emission truck scenario 5

In the analysis by the Mission Possible Partnership, the expected adoption scenario of zero emission trucks (without policy support) will at a global scale lead to significant emissions reductions. This would be driven by improvements over time to the total cost of ownership of zero emission trucks, leading to take up as a result of market forces. It is also possible that these emissions reductions will be greater, if battery electric truck technology improves faster than projected, as it has in the past (the rapid technology improvement scenario).

However, neither scenario will deliver zero emissions by 2050 without policy support to accelerate the transition.

This is confirmed by recent Australian research, which shows that a widescale increase in zero emission truck sales would enable heavy vehicle greenhouse emissions to begin declining (in contrast to their historical growth trend).6

5 Reproduced from Mission Possible Partnership. Making Zero-Emissions Trucking Possible. July 2022. 42.
6 Grattan Institute. The Grattan truck plan. August 2022. 37.
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4. Adopting a zero-emissions technology mix for trucking

Neither battery electric or hydrogen fuel cell electric trucks are suitable for every transport use case today. The industry will continue to use diesel trucks for some use cases for many years.

No-one is suggesting that battery electric or hydrogen fuel cell electric trucks should be used where they are not viable. At the same time, both technologies are expected to improve as they are further developed and deployed. Today’s limitations should not be assumed to apply to tomorrow’s freight task.

Battery electric trucks

Battery electric trucks will play a significant role in the Australian trucking industry.

In January 2022, the ATA in partnership with the Electric Vehicle Council, released the policy report Electric trucks: Keeping shelves stocked in a net zero world (attached). This report was based on a series of industry workshops, including trucking operators, truck manufacturers, and stakeholders involved in delivering electric truck recharging infrastructure.

The report highlighted that—

• there are a range of benefits to deploying electric trucks, including—
o reducing emissions
o lowering operating costs
o improving urban freight
o improving health and safety outcomes
o meeting customer sustainability priorities
o delivering fuel security
• the trucking industry faces a range of barriers to uptake of electric trucks, including—
o limited model availability
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o higher upfront vehicle costs
o restrictive vehicle design rules
o lack of charging infrastructure
o cost of installing charging infrastructure
o limited consumer awareness
• Australia needs a national strategy to accelerate uptake, including regulatory reform,
financial incentives, and investment in infrastructure.

Australia’s truck fleet is made up of approximately 500,000 rigid trucks and 100,000 articulated trucks. Around two thirds of the freight task for rigid trucks is in urban regions, whilst around two thirds of the freight task for articulated trucks is in non-urban regions. Rigid trucks are smaller, carry less freight, and have a higher utilisation in urban areas, providing an immediate investable opportunity for electrification.7

Rigid trucks are also contributing a higher growth to transport emissions, above the increase in the size of the freight task. Electric truck adoption in this sector would be significant.

Fact box: electric trucks in Australia

Electric trucks being prepared for delivery to Australian trucking operators
(Image credit: Volvo Group Australia)

Despite the barriers to their adoption, electric trucks are being deployed by Australian trucking
businesses. Leading truck manufacturers such as Volvo Group Australia (pictured) are bringing
electric truck models to the Australian market and working with local operators to successfully
deploy them into their fleets.

The National Electric Vehicle Strategy must address these barriers to broaden the electric model
range and increase market volume, by reforming Australian Design Rules, implementing a
purchase incentive, and investing in recharging infrastructure to give trucking businesses the
freedom to choose this leading truck technology.

The barriers identified by the ATA/EVC electric trucks policy report are holding back electric truck
model range and volume – restricting the choices available to Australian trucking businesses.

7 Austroads. Options for managing the impacts of aged heavy vehicles. April 2021. 13, 14.
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Hydrogen fuel cell electric trucks

In addition to battery electric trucks, hydrogen fuel cell electric trucks will play a critical role in
Australia’s trucking industry. These vehicles are expected to have a longer range and shorter refuelling time and be more suitable for heavier transport tasks.

However, for most truck manufacturers hydrogen fuel cell electric truck models are not expected to enter series production until later this decade and the point of price parity between hydrogen and diesel trucks is uncertain, and highly dependent on the cost of producing green hydrogen.

What the National Electric Vehicle Strategy should do

The National Electric Vehicle Strategy should seek to accelerate take up of zero emission trucks – both battery electric and hydrogen fuel cell electric.

The choice of the best zero emissions truck technology is ultimately dependent on the transport use case – including consideration of the route, weight, and flexibility required.
Trucking operators are best placed to choose the best truck technology for their freight task.

Sections 5-12 of this submission set out the measures that the ATA considers should be included in the strategy.
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5. Incorporating trucking into the National Electric Vehicle Strategy

The Australian Government should incorporate trucking into the National Electric Vehicle
Strategy. The trucking elements of the strategy should have clear timelines and include the following policy reform elements—

This strategy would build on the existing climate leadership of the Australian Government – including existing commitments to mandate Euro VI and equivalent emission standards and implement funding for hydrogen refuelling infrastructure.

Key priority reforms which need to be addressed by the Australian Government in the strategy include—

• signing the global memorandum of understanding on zero emission trucks (section 6)
• immediate reforms to Australian Design Rules to enable zero emission trucks,
including increased width and mass (section 7)
• introducing an upfront purchase price incentive for zero emission trucks (section 8)
• rolling out electric truck charging infrastructure, including support for depots and
locations where electric trucks will need to recharge, and investment in public fast
charging infrastructure for electric trucks in key urban and freight locations (section 9)
• reforms to road user charging (section 10).

Recommendation 1
The National Electric Vehicle Strategy should prioritise the accelerated take up of zero emission trucks.
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6. Climate leadership – the global zero emission truck MoU

The Australian Government should sign the Global Memorandum of Understanding (MoU) for Zero Emission Medium and Heavy Duty Vehicles.

The ATA has formally endorsed the MoU.

The MoU calls for 100 per cent of medium and heavy duty vehicle sales to be zero emissions by 2040, with an interim target of 30 per cent by 2030. The agreement has been signed by 16 nations, including New Zealand, the United Kingdom and Canada.8 Canada has a transport task with geographical similarities to Australia.

The Global MoU sets a level of ambition and does not represent a regulated cap on vehicle sales. The agreement recognises that the adoption of zero emission trucks might require different approaches and enabling conditions in different parts of the world.

By signing the agreement, the Australian Government would be signing up to work with other leading nations and markets on identifying viable pathways and supportive implementation action.9 Setting clear and unified targets is a critical step to transform the market. It will lay the foundation for strong policies and accelerate work already underway to build and deploy the first wave of zero-emission trucks, vans and buses.10

Recommendation 2
The Australian Government should sign the Global Memorandum of Understanding (MoU) for Zero Emission Medium and Heavy Duty Vehicles to establish clear climate leadership and momentum for the trucking industry.

7. Immediate regulatory reform

The ATA/EVC electric truck report sets out a number of regulatory reform priorities—

• mandating Euro VI emission standards
• reforming Australian Design Rules (ADRs) for zero emission trucks
• exempting zero emission trucks from urban truck curfews.

The Australian Government has made a commitment to mandating Euro VI, or the equivalent US/Japanese standards, and has acknowledged the need for reform to mass limits and truck width to ensure there is no productivity penalty.11 The ATA supports this commitment.

8 Global commercial vehicle drive to zero. 2021. Global memorandum of understanding on zero-emission medium- and heavy-duty vehicles.
9 Memorandum of Understanding on Zero Emission Medium and Heavy Duty Vehicles. 1-2.
10 CALSTART. Global roadmap for reaching 100% zero-emission medium- and heavy-duty vehicles by 2040.

June 2022. 3.
11 DITRDC. Questions and answers on the new ADR 80/04.
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In addition to the Euro VI ADR reform process, the ATA/EVC report and industry workshops identified a clear need for ADR reforms to accelerate the take up of zero emission trucks.
These include—

• aligning width rules with international markets
• implementing a one tonne mass concession for electric and zero emission vehicles.

These ADR reforms are a high priority and together with mandating Euro VI should be implemented by 2025.

Australia’s 2.5 metre truck width rule is out of step with international markets. The ATA supports increasing truck and trailer width to 2.6 metres to deliver clear benefits for—

• load restraint and work health and safety
• refrigerated vehicle efficiency
• roll stability
• access to the latest international technology and zero emission vehicles
• reducing the cost of redesigning European and North American trucks for the
Australian market.12

It is vital that new width rules are applied to both trucks and trailers. Leaving trailers out of the reform would undercut the improvements to productivity.

With zero emission truck technology still being developed and deployed, it is highly likely that further amendments to ADRs may be needed. The development of hydrogen fuel cell electric vehicles, for example, will be critical to determining how this new technology is integrated into vehicle design and the potential impacts on productivity. The ZEV ADR reform process should include ongoing consultation with industry, with a view to implementing a second phase ZEV ADR reform package dependent on further technology development.

Recommendation 3
The Australian Government should implement an immediate reform package for zero emission truck vehicle design rules, including increased width and a zero emission heavy vehicle mass concession, and commit to further reform by 2030.

12 For more information, see the ATA submission to the Safer Freight Vehicles Discussion Paper. June 2021.
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8. Financial incentives

The ATA/EVC electric truck report and industry workshops identified the upfront higher price of electric trucks as a key barrier preventing their take up.

This aligns with international experience. CALSTART has reported that—

High incremental cost is cited by fleet purchases as the prime barrier preventing clean
vehicle purchases. Incentives for the purchase of medium- and heavy-duty commercial
vehicles are needed to help create a robust, sustainable market. 13

Additionally, the Road Freight Zero report found that purchase subsidies would improve the zero emission truck business case by improving the total cost of ownership comparison with diesel trucks.14

Globally, a range of purchase price incentives now exist. For example, the CALSTART voucher incentive program (VIP) model has been established in California and some other
US locations. Under this model—

Public funds are used to reduce the incremental cost between a conventionally-fueled
vehicle and an alternative fuel vehicle. Caps for each category of vehicle may set an
upper limit of public funds for each vehicle project. Dealer networks help fleets navigate
the VIP process and take on the financial responsibility of completing voucher
redemptions. Fleets see a lower purchase cost, while dealers receive full price for the
vehicles because public funds make up the difference between the original price and the
reduced voucher price.15

A voucher incentive scheme has clear benefits—

A VIP is a well-structured, highly transparent tool that government agencies can use to
attract industry participants, engage fleets, and distribute public funding efficiently,
equitably and directly to clean vehicle projects by reducing technology costs at the point
of purchase.16

The ATA considers that a zero emission truck purchase incentive should be—

• available at the point of sale
• broadly accessible
• cover at least 50 per cent of the price difference between ZEV and equivalent ICE
truck models.

Without a purchase incentive, the higher upfront price burden of zero emission models will need to be met by trucking businesses, whilst the benefits from this investment will be spread between the business and the wider community.

13 CALSTART. Voucher Incentive Programs: A Tool for Clean Commercial Vehicle Deployment. July 2019. ES-1.
14 World Economic Forum. Road Freight Zero: Pathways to faster adoption of zero-emission trucks. October
2021. 17.
15 CALSTART. 2019. ES-1.
16 CALSTART. 2019. ES-1.
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In light of the public benefit from industry investment in zero emission trucks, and the need to accelerate the reduction in transport emissions, there is a strong case for public investment to accelerate the transition.

A purchase price incentive of 50 per cent of the price difference between ZEV and conventional trucks would be a reasonable, technology-agnostic policy measure which would establish a natural phase out of public subsidy.

Zero emission technology will become more cost effective as the technology develops and production scales up. The International Council on Clean Transportation (ICCT) estimates that—

• the cost of battery electric truck components will fall 40 per cent from 2020 to 2030,
including a 78 per cent reduction in motor, inverter and transmission costs and a
50 per cent reduction in battery pack costs
• the cost of hydrogen fuel cell electric truck components will fall 23 per cent from 2025
to 2030, including a 30 per cent reduction in fuel cell propulsion system costs and a
21 per cent reduction in hydrogen storage system costs.17

As the higher cost of zero emission truck technology reduces, the cost of a 50 per cent subsidy would also fall.

Recommendation 4
The Australian Government should implement a truck purchase price incentive of 50 per cent of the higher price differential for zero emission truck models.

9. Investing in infrastructure

The provision of zero emission truck energy infrastructure, including both electric truck recharging and hydrogen electric truck refuelling infrastructure, will be a key enabler for the transition to zero emission trucks.

This was a key finding of the ATA/EVC electric trucks report and industry workshops.

Again, the findings of the ATA/EVC industry workshops align with international experience.
The Mission Possible analysis identified that—

Infrastructure availability will be a key enabler of the transition.

The supply chain for diesel – the infrastructure to produce and transport it – is very
mature. There is a global system of oil wells, refineries, pipelines, ships, and filling
stations for delivering diesel. In comparison, the infrastructure for competing zero-carbon
technologies is not well developed.18

17 ICCT. A meta-study of purchase costs for zero-emission trucks. February 2022. 14, 15.
18 Mission Possible Partnership. 2022. 25.
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The development of zero emission truck energy infrastructure will require—

• electric truck recharging infrastructure
• consideration of and investment in appropriate electricity grid upgrades, as required
• continuing the shift to renewable electricity
• green hydrogen refuelling infrastructure
• green hydrogen production and transport.

The impact of electric trucks on the electricity grid will be dependent on specific use cases, locations and existing grid infrastructure. Whilst fast charging of electric trucks is more likely to require grid enhancements, not every electric truck and not every charge will be with fast chargers. Back to base operations, on a slower charge overnight, will have a smaller impact on the grid. Fast chargers can also be expensive to install for individual businesses.

For hydrogen refuelling, a key consideration must be lowering the cost of hydrogen. Green hydrogen production often uses an electrolyser, requiring renewable electricity and water.19
Co-locating production and refuelling infrastructure can lower the cost of hydrogen as a fuel.
Whilst the cost of electrolysers is likely to come down as production scales up, government support in the early roll out of hydrogen infrastructure will be critical.

The ATA supports and recommends co-location of infrastructure where possible. Truck energy infrastructure should prioritise co-location with driver rest facilities and truck parking.
Whilst co-location of hydrogen refuelling and electric recharging infrastructure might be desirable, it is also worth noting that the site considerations may be quite different. For hydrogen in particular, the focus of investment must be on lowering the cost of hydrogen as a fuel.

The ATA recommends that the National Electric Vehicle Strategy should, for trucks—

• scale up support for truck depots, warehouses, truck dealerships and customer sites
to invest in electric truck recharging infrastructure
• invest in public electric truck fast recharging infrastructure for trucks. The initial focus
should be on key urban and freight locations. These locations are likely to be
different to the best locations for car rechargers.
• by 2030, expand the investment in public electric truck recharging infrastructure and
for hydrogen highways refuelling infrastructure to ensure zero emission truck energy
infrastructure is accessible across the National Land Transport Network.

The ATA welcomes the Government’s budget decision to spend $89.5 million over six years from 2022-23 for its Hydrogen Highways initiative.

Recommendation 5
The National Electric Vehicle Strategy should prioritise investment in electric truck recharging infrastructure and hydrogen truck refuelling infrastructure and by 2030 ensure that zero emission truck energy infrastructure is accessible across the National Land
Transport Network.

19 Australian Hydrogen Council. Unlocking Australia’s hydrogen opportunity. September 2021. 19.
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10. Road user charging

The consultation paper says—

Planning is also required as future fuel excise revenue declines from reduced
consumption of petrol and diesel. While this revenue is not currently earmarked for
expenditure on roads, it is an important source of funding. In the long run, Australia will
need a more sustainable and fair way to pay for roads.

We already have a system for setting nationally consistent charges to recover the cost of
road use related to heavy vehicles. That system has been in place since 1996. It is
subject to a cross-government reform proposal to improve the way that money is
invested (‘Heavy Vehicle Road Reform’). Part of that reform is investigating more direct
user charging options for heavy vehicles, including electric heavy vehicles. 20

The lack of action by governments on reforming road user charges over many years – with endless and repeating consultation cycles that go nowhere – means that our road user charging system is broken.

The most important problem is that the Commonwealth’s net road related fuel excise revenue is eroding due to improvements in vehicle fuel efficiency, despite the increasing number of kilometres that Australian vehicles travel (figure 5).

Figure 5: Net road-related fuel excise revenue and vehicle km travelled, 1999-00 to 2019-2021

15,000 270

14,500
250

Total vehicle km travelled (billions)
14,000
230
$2019-20 million

13,500

13,000 210

12,500
190
12,000
170
11,500

11,000 150
1999–00 2001–02 2003–04 2005–06 2007–08 2009–10 2011–12 2013–14 2015-16 2017-18 2019-20

Net fuel tax (left axis) Vehicle km travelled (right axis)

20 Department of Climate Change, Energy, the Environment and Water, National Electric Vehicle Strategy:
Consultation paper. September 2022. 14.
21 Sourced from BITRE, 2021, tables 3.3a and 6.3. ‘Net road related fuel excise’ is gross fuel excise revenue net of fuel tax credits and a small adjustment for the excise paid on off-road fuel use that is not claimed back as credits. See BITRE, 2021, 241, figure A2.
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With electric vehicle sales making up 4.4 per cent of the market in August 2022, the erosion in net fuel tax revenue can only be expected to continue.22

For heavy vehicles, the existing PAYGO cost base for determining road user charges is now meaningless. The cost base uses state governments’ road expenditure figures without audit or appraisal, despite the industry’s long held concerns.23 It requires trucking operators to pay for the cost of road investments which are not freight priorities, and there is no funding certainty for road authorities to make optimal lifecycle decisions.24

State-based road user charging for EVs

In the absence of national road user charges reform, the proliferation of state-based road user charges for electric vehicles will further undermine the goal of having a transparent, sustainable and fair system for funding Australia’s road network.

Victoria has become the first state to establish a road user charge scheme for light vehicles.
The scheme imposes a per kilometre charge on non-excluded electric, hydrogen and plug-in hybrid electric vehicles registered in Victoria with a gross vehicle mass (GVM) of 4.5 tonnes or less, including cargo vans and light rigid trucks.25

Whilst the Victorian scheme only applies to Victorian registered vehicles, it applies to all their travel on 'specified roads’ – including highways outside Victoria.26 This imposes an inconsistent tax burden on businesses operating identical vehicles on the same route, even if those vehicles are not travelling in Victoria.

The ATA is concerned that these state-based schemes will be extended to heavy vehicles.
This is due to the public policy and revenue arguments that the state of Victoria has put forward,27 and the precedent set by New Zealand. Electric vehicles are exempt from the NZ road user charging system, but the exemption for electric light vehicles will only last until 31
March 2024.28 The exemption for electric heavy vehicles will end on 31 December 2025.29

The complexity and compliance burden will only increase as other states pass similar charging legislation or their legislation comes into effect.

For example, road user charges under the Electric Vehicles (Revenue Arrangements) Act
2021 (NSW) will become payable on the earlier of 1 July 2027 or when battery electric vehicles amount to 30 per cent of new vehicle sales in NSW.30

This state-led policy confusion for business is not limited to Victoria and NSW. South
Australia legislated to introduce an electric vehicle road user charge from 2027, but following

22 Federal Chamber of Automotive Industries, FCAI releases new car sales figures for August 2022. Media release, 5 September 2022.
23 NTC, Heavy vehicle charges determination: consultation regulation impact statement. June 2021, 32.
24 Deloitte Access Economics. Economic analysis of potential end-states for the heavy vehicle road reform. June

2017. vii-viii.
25 Zero and Low Emission Vehicle Distance-based Charge Act 2021 (Vic). s 3 (definition of ‘ZLEV’).
26 s 3 (definition of ‘specified road’ para (d)).
27 State of Victoria, ‘Affidavit of Chris Barrett, Deputy Secretary of Department of Treasury and Finance.’ Affidavit in Vanderstock & Anor v State of Victoria, 14 January 2022. Special case book, Annexure SC-4. 141-146.
28 Road User Charges (Exemption Period for Light Electric RUC Vehicles) Order 2012 (NZ) SR 2012/140.
29 Road User Charges (Exemption Period for Heavy Electric RUC Vehicles) Order 2017 (NZ) LI 2017/172.
30 Electric Vehicles (Revenue Arrangements) Act 2021 (NSW) sch 1 (definition of ‘relevant date’).
ATA/National electric vehicle strategy/18 a change of government, the South Australian Government is now seeking to repeal this scheme.31 In contrast, Western Australia has recently committed to introduce an electric vehicle road user charge from 2027.32 In yet another potential variation, the Victorian opposition has committed to pausing the Victorian scheme should they form government at the upcoming state election.33

With state-based road user charges, a business with EVs registered in more than one state would have to submit distance evidence and pay invoices to each state government. There is no guarantee that the states with electric vehicle charging schemes would accept the same distance evidence or have the same arrangements for deducting distances travelled on private roads.

There is also no guarantee that the per kilometre rates would be the same. The Victorian and NSW schemes were legislated with the same per kilometre rates for 2020-21: 2.5 cents per kilometre for electric and hydrogen vehicles and 2.0 cents per kilometre for plug-in hybrid electric vehicles.34

Even though the Victorian and NSW schemes started with the same rates, they have already started and will continue diverging. This is because—

• the respective state parliaments may of course choose to set different rates

• the Victorian minister could, before the start of a financial year, determine not to
index the Victorian ZLEV charge rates for that year.35 The NSW minister does not
have this power

• the Victorian and NSW rates are calculated and indexed using different formulas,
inputs and rounding. The Victorian rates for each financial year are indexed to the
change in the Melbourne All Groups CPI for the previous December quarter and
rounded to one decimal place.36 The NSW electric vehicle rate for each financial year
is indexed to the change in the Sydney All Groups CPI for the previous March quarter
and rounded to three decimal places.37 The NSW plug-in hybrid electric vehicle rate
is then calculated as 80 per cent of the electric vehicle rate, rounded to three decimal
places.38 Due to these differences, the per kilometre rates for both electric and plug-
in hybrid electric vehicles would already be different, if the NSW charges were
payable.

31 South Australian Government seeking to repeal electric vehicle tax plans. 24 May 2022. Published by
Whichcar?
32 WA Government announced $60 million EV package, road user charge from 2027. 10 May 2022. Published by

Wheels.
33 Bloch, Michael. VIC Libs pledge to pause electric vehicle tax. 25 October 2022.
34 Zero and Low Emission Vehicle Distance-based Charge Act 2021 (Vic), s 8; Electric Vehicles (Revenue

Arrangements) Act 2021 (NSW), s 12(1). Under the NSW Act, plug-in hybrid electric vehicles are charged at 80 per cent of the electric vehicle rate. In 2020-21, this was equivalent to the Victorian plug-in hybrid rate, 2.0 cents per litre.
35 s 9(5).
36 s 9(2).
37 Electric Vehicles (Revenue Arrangements) Act 2021 (NSW), s 12. Section 12(4) references the Sydney All

Groups CPI ‘for the most recent quarter, published before the start of the financial year by the Australian Bureau of Statistics.’ In practice, this is the March quarter.
38 ibid, s 13.
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Instead of wishing and hoping and thinking that state legislation will deliver consistent and compatible results, the best way to establish a uniform road user charging system is for the
Australian Government to legislate to establish one.

In its January 2022 report on road pricing, the House of Commons Transport Committee noted that—

The taxes imposed by fuel duty and vehicle excise duty are increasingly duplicated by
local schemes that charge motorists for entering congestion zones and clean air zones.
The growing patchwork of devolved schemes may make it impossible to deliver a
national road pricing scheme, because the simultaneous operation of local and national
road pricing schemes would create confusion and unfair double taxation.39

Additionally, local replacements for a declining national tax risk being unworkable and inequitable—

The devolution of road pricing could lead to the introduction of clunky, unconnected
schemes that charge users the same price for driving one mile into the zone as those
who drive across it for hours in a day. The more regional schemes that are created, the
harder it will eventually be for the Government to implement a functional national system.
Fuel duty and vehicle excise duty are Treasury taxes that require a national-level
replacement rather than a patchwork of incongruous local schemes. Indeed, the
introduction of a range of more-or-less-generous local road pricing schemes would risk
engendering regional inequality and driving economic disadvantage.40

The same is true of state schemes in Australia’s federal system.

Recommendation 6
The Australian Government should develop a national road user charging scheme which ensures sustainable and fair funding for the road network as Australia transitions to zero emission vehicles.

11. Regulatory schemes

The consultation paper seeks feedback on the possibility of implementing fuel efficiency standards for heavy vehicles and references the Californian Advanced Clean Trucks regulation that regulates minimum sales levels for zero emission heavy vehicles.

Additionally, low emission zones have been part of the national conversation recently.

This form of regulatory schemes can be used to bring zero emission truck models into the market. At the same time, these schemes vary by location and need to be calibrated to the market and industry they are being applied to.

39 House of Commons Transport Committee, Road pricing (House of Commons Paper No 789, Session 2021-
22), 3.
40 Ibid, 10.
ATA/National electric vehicle strategy/20

As set out in this submission, the ATA considers that the immediate priority for zero emission truck policy must be—

• regulatory reform to Australian Design Rules
• implementing a zero emission truck purchase incentive
• investment in zero emission truck energy infrastructure.

Proposals for regulatory schemes are complex. If proposed and implemented before addressing the immediate priorities identified by the ATA, they would risk dominating the public policy agenda and not achieving the progress which is required on ADRs, purchase incentives, and zero emissions energy infrastructure.

At the same time, if the ATA’s immediate priorities are not addressed then regulatory measures would risk increasing the price of Euro VI trucks to achieve zero emission sales.
For transport use cases which do not yet have a zero emission vehicle option, this would put up the cost of cleaner vehicles with no alternative.

Ideally, the transition to zero emission trucks should be accelerated right now to ensure the transition after 2035 is not steep. Governments must address the barriers to zero emission trucks which have been identified by the ATA and industry. Australia will then be better placed to consider if heavy vehicle zero emission mandates will be needed by 2035.41

Low emission zones are a decision for state and territory governments in consultation with their local trucking industry and ATA member associations.

12. Manufacturing

The consultation paper raises questions around expanding our existing domestic heavy vehicle manufacturing and assembly capability.

Australia has a proud history of manufacturing trucks and trailers – which continues to this day.

Major truck manufacturers operate in a global marketplace – and most leading truck manufacturers now have clear commitments to reducing carbon and increasing zero emission truck sales.

Domestic manufacturing of zero emission trucks will require a domestic market.
Implementing the strategy set out in this submission would assist in strongly establishing a domestic zero emission truck market. Reforms to ADRs are particularly important.

Additionally, consideration will need to be given to establishing a local battery supply chain.
Batteries are both expensive and difficult to transport to Australia due to the size, weight and materials of an electric vehicle battery. This means that batteries are often not allowed to be shipped as air freight, meaning any domestic electric vehicle manufacturer would be reliant on long, expensive shipping supply chains.

41 The MPP analysis modelled a pathway with a required sales trajectory for zero emission trucks commencing from 2035. 2022. 35.
ATA/National electric vehicle strategy/21

13. ATA contact

The ATA contact for this submission is Samuel Marks, Senior Adviser, Infrastructure and
Sustainability on 02 6253 6900 or at samuel.marks@truck.net.au

Electric trucks:
Keeping shelves stocked in a net zero world
ELECTRIC TRUCK REPORT 2

Executive
Summary

The transport sector is undergoing a However, there are unique policy and industry transformation that is changing the way we drive challenges for the Australian freight sector that cars, transport goods, and receive deliveries. limit its ability to electrify.
Targets to reduce emissions are impacting how governments interact with transport policy and businesses procure vehicles. The Electric Vehicle Council (EVC) and the Australian
Trucking Association (ATA) have partnered to address the
Over the last two years, COVID – 19 need for electric freight policy.
has changed the way Australians purchase goods, with eCommerce growing 57 per cent - and this shift in consumer Through this partnership, a series of workshops behaviour is here to stay.[1] were held to identify challenges for the sector.
With over 50 participating organisations -
Lockdowns and panic buying have highlighted the including truck manufacturers, fleet operators, importance of the freight sector in keeping our charging infrastructure and electricity - the supermarkets and pharmacies stocked. Growth wealth of knowledge presented by our attendees in online shopping has resulted in an increased provided invaluable insights into what is needed dependence on last-mile delivery. The Truck to help the freight sector electrify.
Industry Council reports that in 2021, there has been significant sales growth in vans and trucks The uncertain policy environment, limited model over a 5-year average.[2] availability, lack of charging infrastructure, limited
consumer awareness, and restrictive Australian
With all governments in Australia having Design Rules were identified as key barriers to the committed to net-zero by 2050, there is an electric freight transition.
immediate need to address emissions in the transport sector. The average lifetime of Australia’s This paper outlines policy recommendations to trucking fleet means that we have a limited address these barriers.
number of years to accelerate uptake to reach our climate targets.

The importance of our freight sector demands that it is not left behind in the electrification of transport that is happening in Australia, and globally.

Electrification will also present opportunities to trucking businesses and Australia’s supply chains, including ending volatile diesel costs, reducing maintenance costs, improving urban efficiency and air quality, and delivering better conditions for BEHYAD JAFARI DAVID SMITH truck drivers.
CEO, CHAIR,
ELECTRIC VEHICLE AUSTRALIAN
COUNCIL TRUCKING
ASSOCIATION
ELECTRIC TRUCK REPORT 3

Key
takeaways Amend
Australian LIGHT DUTY
WIDTH SIZE
Design Rules
for trucks

1 MEDIUM DUTY

+ 1 TONNE

Provide Financial incentives
HEAVY DUTY
EURO VI

$
$ UPFRONT STAMP
$
PURCHASE DUTY
Invest in REST STOP
charging
infrastructure
DEPOT

Sales HUB

goal of: 100 %
by 2040

30%
by 2030
ELECTRIC TRUCK REPORT 4

The case for electric trucks
EMISSIONS
AND NET-ZERO

19%
Transport emissions in Australia make up
19 per cent of our total emissions. [3]
4% 8% 23%

Heavy vehicles yet they perform In total, heavy
make up around about 8 per cent vehicles account

38%
The road freight sector contributes 38
only 4 per cent of road vehicle for 23 per cent of
per cent of our total transport emissions.[4]
of the road kilometres all road transport
vehicle fleet travelled (VKT). fuel consumed in
Australia.[5]

The result is a disproportionate amount of noxious emissions produced from
the road freight sector.

Government projections indicate that emissions from articulated and rigid
trucks will increase in the next decade, producing 22 MT CO2-e by 2030. This is
a 6 MT CO2-e increase from 2005 levels.[6]

In addition to this, the average age of trucks in Australia is between 10-15 years,
which is significantly older than the average age of trucks in Austria (6.4 years),
France (9.3 years), Germany (9.5 years) and the Netherlands (9.6 years).

The age of the truck fleet in Australia results in higher emissions produced by
the sector, as older vehicles tend to be more inefficient, consuming more fuel
and contributing more damage to the environment.

There is an immediate need to accelerate the uptake of electric trucks in
Australia.

As critical as linehaul, long distance and heavy haulage transport tasks are,
Australia’s truck fleet and freight task includes significant diversity. Road
freight tasks in capital cities and urban centres currently account for between
30 to 40 per cent of total road freight [7]. Brisbane and Perth are expected to
experience growth of more than 140 per cent by 2030.[8] There are electric
vehicle models available today that could be deployed into existing urban fleet
operations.

The adoption of electric freight vehicles will reduce noxious pollution and
associated health impacts; create new jobs; encourage sustainable transport
and energy choices; reduce transport costs and the cost of goods for
consumers and businesses; increase fuel security, and lower Australia’s carbon
emissions.

All Australian governments have now committed to net-zero by 2050. This
target cannot be achieved without decarbonising road freight and the broader
transport sector. In order to reach our climate targets the last internal
combustion engine trucks must be sold by 2040.
ELECTRIC TRUCK REPORT 5

ECONOMIC Increased costs and savings in the trucking industry have strong flow-on
effects for other industries in the Australian economy, including wholesale
OPPORTUNITY
trade, construction, retail, and agricultural industries. As such, the trucking
sector is of critical economic and national importance.

98% Small and family businesses make up almost 98 per cent of all trucking operators,[9]

0.5%
70 % and 70 per Not well known, less than 0.5 per cent cent have of all operators have more than 100 only one trucks in their fleet.[10] truck.

Diesel is one of the most significant costs for a trucking business - with fuel
representing around 20 per cent of short-haul operators’ costs and around 35
per cent of long-haul operators’ costs.[11] Trucking operators, especially smaller
operators, have significant difficulty passing increases in the volatile price of diesel
on to clients. [12]

By switching to an electric truck, operators will save on diesel costs, reducing
the burden of the volatility of fuel prices. In addition, lower maintenance costs
will provide cost savings to operators.

Additionally, electric trucks have the potential to deliver significant
improvements in fleet efficiency, and through an exemption to urban truck
curfews, could support increased flexibility in hours of operation. Truck curfews
were introduced as a regulation to limit the operational hours of truck fleets
due to the noise they create in residential areas. The lack of noise from electric
trucks means they should be permitted to be used outside of curfew limits.
Curfew-free operations would deliver significant financial and efficiency
benefits. A reduction in peak hour traffic and congestion would provide further
benefits to the community.

Furthermore, with environmental and health benefits delivered through
reductions in pollution and greenhouse gas emissions it is estimated that the
electrification of articulated and rigid trucks could save Australia $324.8 billion
by 2050 [13].

Electrification of the truck fleet has significant potential to ensure our growing
freight sector is greener, quieter, and delivers significant economic benefits.
ELECTRIC TRUCK REPORT 6

HEALTH AND Electric trucks have significant potential to reduce vehicle noise and improve
urban air quality in our communities. Electric trucks will also improve
SAFETY conditions for truck drivers, through lower noise and vibrations.

The health effects of exposure to air pollution include reduced lung function,
ischemic heart disease, stroke, respiratory illnesses and cancer.[14] Living close to
major roads and highways increases health risks,[15] and while Australia
generally has good air quality by global standards the air quality index in the
Sydney, Illawarra, Lower Hunter, Melbourne and Southeast Queensland regions
has deteriorated since 2011.[16]

650 60%
people in NSW die more people die from
each year from vehicle emissions than car
emissions crashes.
Source: CLEANER AND SAFER ROADS -
EVC & ASTHMA AUSTRALIA

Electrification and new trucks more generally will also bring significant safety
benefits and technology. The Government’s consideration of safer freight
vehicles would mandate additional safety technologies for wider freight
vehicles, including devices for indirect vision, advanced emergency braking,
lane departure warning systems, blind spot information systems, side underrun
protection and conspicuity markings.[17]

Delivery teams found the quieter cabin environment a fantastic change to their day. Most truck drivers are used
FINN DUNLEAVY, ANC to sitting above a hot, vibrating, noisy engine, but in the FEEDBACK PROVIDED BY ANC
[SEA-powered electric trucks] that is all gone, and they DELIVERS TO SEA ELECTRIC - 2021.
found communicating with customers prior to arriving at the delivery much easier to do in the new, improved cabin space.
ELECTRIC TRUCK REPORT 7

SUSTAINABILITY Trucking operators are increasingly facing pressure to reduce emissions from
their customers. Major retailers have begun announcing net zero or
sustainability commitments and the ability of operators and distributors to
utilise zero emission trucks in their fleets will be crucial to being in the best
position to win future contracts with their customers.

Additionally, electric freight trucks are a way for companies to reach their own
sustainability targets and reduce their environmental impact.

It is the first of many electric trucks that will deliver our
ASAHI BEVERAGES GROUP beer. Transitioning our deliveries to electric vehicles CEO ROBERT LERVASI ON THE will help us achieve our ambitious sustainability goals VOLVO VL TRUCK OPERATED of reducing our net carbon emissions across our entire BY LINFOX TO DELIVER VB.
supply chain by 30% by 2030 and to zero by 2050.[18]

JAMES DIXON, GENERAL
With the significant growth in parcel volumes, more MANAGER, NETWORKS FOR vehicles are required in our network … It makes good AUSTRALIA POST ON THE sense to add electric vehicles as part of this requirement. ECANTER WHICH WILL BE
Not only will these eCanters fit our needs in this DISTRIBUTED THROUGH THE delivery category, but they will also contribute to our FUSO RETAIL NETWORK AND science‑based target to reduce emissions by 15% by DAIMLER TRUCK AND BUS
2025 from a FY19 baseline. AUSTRALIA. [19]
ELECTRIC TRUCK REPORT 8

FUEL SECURITY Australians rely on the freight sector to deliver utilities, medical needs, mains
water, and food distribution using refined fuel. However, experts suggest that
distribution could come to a halt in three weeks with an offshore disruption,[20]
given. This is because Australia only has around 20 days of diesel consumption
in our national reserves (as at September 2021).[21]

Australia’s continued dependence on imported oil will increasingly be
threatened by geopolitical tensions, climate change and unprecedented global
events, such as the COVID-19 pandemic.

The pandemic continues to impact Australia’s fuel supply chain, causing
unpredictable changes in demand for fuel and creating a potential for major
disruptions to the domestic and international fuel supply chains.[22]

There are now only two oil refineries left in Australia - half of what was available
in 2019, with BP closing its Kwinana Refinery in 2020 and ExxonMobil closing its
Altona oil refinery in 2021. To address this, the Federal Government announced
a $2 billion package to keep refineries open.

However, this does not solve the issue of Australia’s increasingly volatile fuel
security. Given that Australia’s continued dependence on imported fuel is a
matter of national security, there is an imperative to diversify fuel consumption.
Electric vehicles, including trucks, provide an opportunity to do this.

In 2020, 24% of Australia’s total electricity generation was from renewable
energy sources, including solar (9%), wind (9%) and hydro (6%).[23] Australian-
made renewable energy could be used by the transport sector to power our
vehicles, providing economic benefit to the Australian community.

Similarly, utilising renewable energy to power electric trucks will provide a cost
benefit to operators, who can utilise tariffs and battery storage to save on the
ELECTRICITY VS. total cost of ownership.
DIESEL COSTS.

FUEL TYPE Electricity Diesel
In a 22-tonne electric truck, ENERGY REQUIRED FOR
280kWh 84L covering 300 km 300KM RANGE unladen would COST PER KWH (OFFPEAK
$0.05-$0.15/kWh* use 280 kWh of COMMERCIAL) electricity.
COST PER L ($ AVERAGE) $1.33/L
In a 22-tonne rigid diesel truck, $4.67-$14.00 $38.78**
COST PER 100KM covering 300km (93.33kWh/100km) (28.6L/100km) requires 70-85L of fuel. COST FOR 300KM WORTH OF
$14-$42 $116.34
FUEL

* Electricity price is based on a commercial off-peak tariff for a depot-based fleet.
** including diesel cost of $37.24 (28L/100km) and Adblue of $1.54)

While there is a need to sustain fuel supply to the existing Australian fleet, the
importance of strengthening our fuel security should be at the forefront of
transport policy in Australia. Electric vehicles provide the opportunity to fuel
our vehicles with Australian-made renewable energy.
ELECTRIC TRUCK REPORT 9

It’s time to act now on electric trucks

Australia’s truck fleet is made up of approximately 500,000 rigid trucks and
100,000 articulated trucks. Around two thirds of the freight task for rigid trucks
is in urban regions, whilst around two thirds of the freight task for articulated
trucks is in non-urban regions. Rigid trucks are smaller, carry less freight, and
have a higher utilisation in urban areas, providing an immediate investable
opportunity for electrification.

International experience has shown that light and medium duty truck
applications are deployable now, and are producing total-cost-of-ownership
comparisons that are at parity with internal combustion engine trucks.

“On the demand-side, the adoption of electric freight trucks is driven mainly by
competitive total-cost of ownership , better driver comfort, much lower noise levels
(8 times lower according to Renault Trucks), reduced congestion and air quality
benefits in cities.”[24]

With the right policy settings, trucking and freight businesses in Australia
are ready to make the transition to electric and zero emission trucks. By 2025,
businesses and operations with heavy vehicle fleets see a significant role for
electric, hydrogen and alternatively powered heavy vehicles.

The EROAD The Road to Sustainability report found that operators expect
between 11.9 per cent (for medium sized fleets) to 36.9 per cent (for larger
fleets) of fleet make up to be zero or low emission vehicles.[25] However,
current zero emission truck sales in Australia indicate this expectation will
not be achieved.

Current policy settings do not support the choices which trucking businesses wish to
make.

Globally, the trucking industry expects that zero emission road freight
technology is likely to evolve faster than expected. Today, there are already
more than 58 models available for purchase in North America, Europe, and
China.[26] This is compared to the 14 electric truck and van models available in
the Australian market (SEE APPENDIX 1).

Industry needs to move beyond planning to commence deployment of new
technologies to operations, so they can be tested and refined. This is important
to increasing the scale of new technologies to lower costs and improve
infrastructure.[27]
ELECTRIC TRUCK REPORT 10

Battery electric truck technology is deployable now, especially in urban use
cases. Zero emission vehicles should be accelerated based on technology
readiness and government policy should enable trucking operators to choose
the best technology fit for their business.

Hydrogen fuel cell vehicles may play a vital role in the Australian trucking
industry, over longer distances and for heavier transport use cases. However,
it is critical that the deployment of battery electric trucks is not delayed whilst
hydrogen and other potential technologies are refined and tested.

It is probable that for light trucks in urban use cases in particular, hydrogen
will not become competitive against battery electric, in the same way that
hydrogen may not be competitive against battery electric for the majority of
light passenger vehicle use cases.

Additionally, the potential development of alternative fuels may assist
decarbonisation of the trucking fleet but this is not a reason for delaying
electrification. Currently, these fuels still generate tailpipe emissions, are
limited in supply, carry a price premium, and may face significant demand
from other hard to abate sectors.[28]

The technology will continue to improve as battery electric trucks are deployed
around the world. As battery technology becomes both cheaper and lighter,
this will deliver increasingly longer driving range, and expand the potential
use cases for electric trucks and associated charging infrastructure.
ELECTRIC TRUCK REPORT 11

What does electric freight look like?

Freight electrification will require collaboration across the sector. Building
awareness across the sector will generate enthusiasm, reduce timelines,
improve efficiency, create confidence, and accelerate electrification.

FLEET OPERATORS FINANCIAL INSTITUTIONS TRUCK MANUFACTURERS

Fleet operators will be the Financial institutions will Truck manufacturers are
key player that make the provide the financing those supplying electric
decision to electrify. They will methods to enable operators trucks to the market.
be the ones purchasing or to procure electric trucks.
leasing zero emissions
vehicles.

ELECTRICITY CHARGING INFRASTRUCTURE GOVERNMENTS
SECTOR PROVIDERS
OPERATORS

Electricity sector operators,
including Distributed
Networks Service Providers
(DNSPs), and at a larger
scale Transmission Network Charging infrastructure Governments should provide
Service Providers (TNSPs) will providers supply the focussed electric truck policy
be responsible for upgrading charging infrastructure with financial, regulatory,
and supplying the required hardware to recharge the and charging infrastructure
electrical capacity to the site electric truck batteries. levers, to support the
of charging infrastructure. industry with transitioning.

There is a need for government policy to support all the players in truck
electrification. Similarly, there is a need for all players involved in electrification
of trucks to support operators as they begin the customer journey.
ELECTRIC TRUCK REPORT 12

Challenges for the industry
The trucking industry is faced with a specific set of challenges when
considering electrification. Operational feasibility, energy usage and capacity,
land assets and parking facilities, duty cycles, driver awareness and behaviour,
and upfront purchase costs must all be considered when planning the
transition to an electric fleet.

Specific barriers were identified through a series of workshops held by the
ATA and EVC, in which truck operators, truck manufacturers, charging
infrastructure providers and the electricity sector highlighted that limited
model availability, price of vehicles, lack of charging infrastructure, cost of
charging infrastructure installation, limited consumer awareness, and
restrictive Australian Design Rules are key barriers to electric truck transition.

The challenges have the potential to restrict investment and limit confidence
among truck manufacturers and operators. Given that trucking is already
a low margin industry, with many small and family businesses owning and
operating the majority of Australia’s truck fleet, there is a need to incentivise
electrification – particularly with regard to the high capital expenditure
required for network upgrades, vehicle costs, and deployment of charging
infrastructure.

Policies to support the electric freight sector are necessary to increase market
confidence, drive investment, and accelerate the transition to electric trucks.
The truck industry is ready and willing to begin fleet transition to electric.

LIMITED LACK OF
MODEL ? ? CHARGING
AVAILABILITY INFRASTRUCTURE

COST OF $
$ Barriers $
COST OF
CHARGING
ELECTRIC $
$

to uptake
$

TRUCKS INFRASTRUCTURE

RESTRICTIVE ? LIMITED
AUSTRALIAN CONSUMER
DESIGN RULES AWARNESS
ELECTRIC TRUCK REPORT 13

Policy The EVC and ATA recommend
a national strategy with the recommendations
following policy actions to
accelerate uptake:

FEDERAL STATE
REGULATORY

Truck width should be increased to align with standards
WIDTH LIMIT
used by major supplier economies.

One tonne concession for electric and zero emission
STEER AXLE MASS
trucks.

Mandate Euro VI emission standards (and equivalent
EURO VI
international standards) by 2024 / 2025

URBAN TRUCK State and territory governments to exempt electric and
CURFEWS zero emission trucks from truck curfews.

CHARGING INFRASTRUCTURE

Incentive payment to reduce the cost of installing
DEPOT BASED CHARGING
charging infrastructure at depots.

PUBLIC CHARGING Investment in public charging infrastructure to
INFRASTRUCTURE support En route electric truck charging.

FINANCIAL

PURCHASE PRICE Incentive payment to reduce the upfront purchase price
difference between electric/zero emission trucks and
INCENTIVE
internal combustion engine trucks.

Exempt electric and zero emission trucks from stamp
STAMP DUTY
duty.

OTHER

The Australian Government should adopt the Global
Memorandum of Understanding (MoU) for Zero-Emission
Medium and Heavy-Duty Vehicles (ZE-MHDVs) with a
SALES GOAL
ZE‑MHDV sales goal –
• 30 per cent by 2030
• 100 per cent by 2040.

Consult with the electric vehicle and truck industries to
SKILLS AND TRAINING determine what skills gaps currently exist and what skills
may be required in the future skills market.
ELECTRIC TRUCK REPORT 14

FEDERAL STATE

REGULATORY Australian Design Rules were identified by workshop participants as a barrier
to electrification.

Currently, width rules, steer axle mass, and fuel standards are out of step with
international regulation. This creates a unique and expensive import and
modification process for selling a vehicle in the Australian market.

Alignment of standards would simplify the import process, making it more
efficient and cost effective for manufacturers to import electric trucks,
ultimately providing more choice for operators.

WIDTH RULES Truck width should be increased to align with standards used by major
supplier economies.

Australia’s truck width rules, at 2.5 metres, are out of step with the standard
in Europe (2.55 metres, with 2.6 metres for refrigerated vehicles) and North
America (2.6 metres). This is delaying and restricting the availability of zero
emission trucks in the Australian market.

Vehicles based on EU or US market designs (including Australian made trucks)
make up around 60 per cent of new heavy trucks and the cost of redesigning
these trucks for the Australian market is currently estimated at $15 to $30
million per year.

Additionally, it has been reported that likely future design changes will be
increasingly difficult or not economical to adapt to a 2.5 metre width and the
relatively small Australian market, particularly for battery electric trucks.

STEER AXLE MASS Minimum one tonne concession for electric and zero emission trucks.

The weight of batteries can have a significant impact on electric trucks, in
particular for trucks that operate over longer distances and/or at higher gross
combination mass. Australia’s steer axle mass limit, currently at 6.5 tonnes, is
holding back the deployment of larger electric truck models.

Australia’s axle mass rules are already lower than major supplier economies
such as Europe. A minimum one tonne concession for steer axle mass is
needed in the short term to enable more electric trucks to be introduced into
the Australian market.

The Australian Government should mandate Euro VI emissions standards
EURO VI
at Stage C and equivalent US and Japan standards for new heavy vehicle
models from 1 January 2024 and all new heavy vehicles from 1 January
2025.

This position has wide industry support (including the Australian Trucking
Association, the Electric Vehicle Council, and the Truck Industry Council) and
would bring these standards into force three and a half years earlier than
proposed in the Government’s draft Regulation Impact Statement (RIS).

The RIS projected that reductions in emissions from previous standards
reached their limit in 2020, and without a move to a mandatory Euro VI
standard, emissions will now steadily increase. Mandating Euro VI has a benefit
cost ratio of 4.53 ($5.2 billion) out to 2050, according to the RIS.

Adopting Euro VI emission standards would deliver a reduction in emission
ELECTRIC TRUCK REPORT 15

FEDERAL STATE
limits for oxides of nitrogen (NOx) by up to 80 per cent, a reduction in emission
limits for particulate matter by up to 66 per cent and a new particle number
limit to reduce ultrafine particle emissions.[29]

‘Mandating Euro VI for heavy vehicles would also bring Australia’s vehicle
standards into closer alignment with international standards adopted by major
vehicle markets, which also supply the majority of heavy vehicles to Australia.’
THE DEPARTMENT OF INFRASTRUCTURE, TRANSPORT, REGIONAL DEVELOPMENT AND
COMMUNICATIONS (2020).

URBAN TRUCK State and territory governments should exempt electric trucks from urban
CURFEWS truck curfews.

Truck curfews seek to minimise and mitigate the community impacts of
vehicle noise and emissions from truck movements in urban areas. Electric
trucks do not produce these emissions and are significantly quieter. They
should therefore be exempt from curfews.

The impacts of COVID-19 on the supply chain – including increased demand
for goods such as toilet paper – has seen some curfews suspended, improving
freight efficiency.

A NSW Government review of the suspension of curfews for COVID-19
reported benefits from out of hours deliveries included improved productivity
and efficiency, flexibility to respond to surges in demand, reliability for
consumers, fewer visible heavy vehicles at peak times and improvements to
road safety.

CHARGING
INFRASTRUCTURE The accessibility and affordability of charging infrastructure were identified as
key challenges in truck electrification.

Therefore, investment in charging infrastructure is necessary to provide
confidence to operators that they can fulfil their daily operations. Funding
should include grid upgrades, site electrical upgrades, and charging
infrastructure installation.

Two forms of charging infrastructure will be required to support electric truck
fleet operations: depot-based charging and public charging networks
(including highways, hubs and distribution centres).

There is additionally a lack of understanding of truck operators in what
infrastructure is required to support existing vehicle utilisation. Providing
support and building awareness of the different roles of public and depot-
based charging infrastructure will be instrumental to the success of truck fleet
electrification.

FUNDING FOR DEPOT-
Governments should provide funding to support fleet operators with the
BASED CHARGING
installation of charging infrastructure, inclusive of grid upgrades and
INFRASTRUCTURE electrical capacity.

It is likely that the first use cases of electric trucks will be fleets that have -
depots or back-to-base fleet operations, which would allow them to charge
their vehicles overnight.

However, the installation of depot-based charging infrastructure will have
upfront capex implications for fleet operators.
ELECTRIC TRUCK REPORT 16

FEDERAL STATE

Given that the needs of trucking operators will demand different levels of
charging, funding should seek to support both AC and DC infrastructure.

FUNDING FOR Governments should provide funding for public charging infrastructure for
the freight sector.
PUBLIC CHARGING
INFRASTRUCTURE Public charging infrastructure will be required at locations across metro
regions, in industrial complexes, at existing trucks stops, along highways, and
at service stations to support existing truck operations.

In metro regions, public charging will facilitate the transition for operators
who do not own the land they park their trucks on or do not have depots.
Additionally, it will support fleet operations that need a top-up during their
routes.

Public charging infrastructure along freight routes will support intercity and
interstate fleet operations.

Recognising the importance of managing fatigue for truck drivers, priority for
public charging infrastructure should be given to co-location with driver rest
facilities both on freight routes and in metro regions.

FINANCIAL The higher upfront cost of electric trucks is a significant barrier for trucking
operators, who have low profit margins. This issue was consistently raised by
workshop participants and members of both the EVC and ATA.

For some truck models, the upfront cost can be twice that of a diesel
equivalent. With the high price of heavy vehicles, this can represent an
additional $200,000.

Some operators report higher insurance costs, and changes to the utilisation of
an electric truck (such as recharging time) can have a significant impact for a
trucking business.

Financial incentives will play a significant role in reducing the cost burden of
an electric truck and incentivising freight transition.

PURCHASE PRICE Governments should provide an incentive payment to reduce the upfront
purchase cost between electric/zero emission trucks and internal
INCENTIVE
combustion engine trucks.

New trucks require investment decisions to be made by trucking businesses.
Prior to COVID-19, it was estimated that trucking operators would need to
invest in excess of $3.5 billion in capital just to meet demand over an expected
five-year period. With tight profit margins, it will be difficult for trucking
businesses to invest in electric trucks whilst a large upfront price barrier
remains requiring additional capital above and beyond a business-as-usual
case.

The introduction of a purchase price incentive is critical to accelerating the
transition to electric and zero emission trucks. Increased scale, sales, and
model availability is needed to bring down costs to make electric trucks a
commercial choice for Australian businesses. A purchase price incentive
signals to truck manufacturers that there is demand in the market.
ELECTRIC TRUCK REPORT 17

For example:
FEDERAL STATE
In California, the Hybrid and Zero Emission Truck and Bus Voucher Incentive
Project (HVIP) has provided 7,500 incentives of US$120,000 to purchase the
cleanest medium and heavy-duty trucks. The scheme provides point of sale
price reductions on ZLEV trucks and buses.[30]

In Germany, an incentive is available representing 80 per cent of the price
difference for battery, fuel cell and trolley hybrid drive systems. The incentive is
available to leasing or rental companies if the incentive is fully passed through.
With an initial term to 2024, the scheme also provides industry with planning
security.[31]

STAMP DUTY State and territory governments should exempt electric and zero emission
trucks from stamp duty.
EXEMPTION

Stamp duty currently discourages trucking operators from investing in new
heavy vehicles, because it adds an additional cost burden on the operator at
the time of purchase. To encourage the purchase of electric and zero emission
trucks, a stamp duty exemption should be provided.

However, the level of stamp duty per truck is significantly less than the higher
upfront cost of an electric truck. Stamp duty exemptions would not change
the need for a purchase price incentive.

OTHER
SALES GOAL The Australian, state and territory governments should adopt the Global
Memorandum of Understanding (MoU) for Zero-Emission Medium and
Heavy-Duty Vehicles with a sales goal of 30 per cent by 2030 and 100 per
cent by 2040.

Electric truck sales goals signal to truck manufacturers that there is demand
for product and that units should be allocated to the Australian market. For
model availability to increase, there needs to be confidence in the market – a
sales target would provide that.

The Global Memorandum of Understanding (MoU) for Zero-Emission Medium
and Heavy-Duty Vehicles, announced at COP26, is the first ever global
agreement on zero emission trucks and buses. The MoU has been endorsed by
national governments, sub-national governments, manufacturers, fleets and
other industry bodies.

The sales goal would enable the success (or failure) of zero emission trucking
policy to be measured. As long as the existing sales trajectory of zero emission
trucks is not meeting this goal, stronger incentives will be required.

The sales goals would also support the net zero commitment of all Australian
governments.

SKILLS AND TRAINING The Government should consult with the electric vehicle and truck
industries to determine what skills gaps currently exist and what skills may
be required in the future skills market.

To support the growth of jobs in the electric vehicle industry and as electric
trucks become more widely adopted, there will be a need for national training
programs to upskill and/or qualify those working or entering the sector.
ELECTRIC TRUCK REPORT 18

APPENDIX:
EV VAN AND TRUCK MODEL AVAILABILITY

MANUFACTURER MODEL SEGMENT BATTERY SIZE RANGE

ACE ACE Cargo Light Light Commerical 23.2 200

ACE
Daimler Truck Fuso e-canter Light Duty Truck 82.8 100 and Bus

Electric Trucks
Australia /
BYD T3 Van 50.3 300
TrueGreen
Mobility

EV Automotive EC11 Van 73.6 200

JAC motors N55 EV truck Light duty truck 96.7 200

Janus Electric Kenworth T403 Truck conversion 600 400-500

Light commercial
Renault Kangoo Maxi 33 200
van

E4V Van 88 kWh 300

100 kWh –
SEA 300-85 Truck Cab-Chassis 275 (Unladen)
136 kWh

SEA Electric SEA 500-140 Truck Cab-Chassis 136 kWh 200 (Unladen)

136 kWh –
SEA 500-225 Truck Cab-Chassis 220 (Unladen)
250 kWh

SEA 300-45 Truck Cab-Chassis 70 kWh 275 (Unladen)

200 kWh battery
Volvo FL Electric Prime mover packs (don’t know 300
how many)
Volvo Trucks

Volvo FE Heavy duty 198 or 26 120-200
ELECTRIC TRUCK REPORT 19

REFERENCE LIST

[1] Australia Post (2021) eCommerce Industry Report.

[2] Truck Industry Council (2021).

[3] The Department of Industry, Science, Energy and Resource (2021). Australia’s Emissions
projections 2021

[4] ClimateWorks (2020). Decarbonisation Futures

[5] The Department of Infrastructure, Transport, Regional Development and Communications
(2020). Heavy Vehicle Emissions Standards for Cleaner Air.

[6] The Department of Industry, Science, Energy and Resource (2021) Australia’s Emissions
projections 2021

[7] Bureau of Infrastructure, Transport and Regional Economics (BITRE), (2019). Australian
aggregate freight forecasts – 2019 update.

[8] Inquiry into National Freight and Supply Chain Priorities, 2018. Report.

[9] ABS, (June 2020). Counts of Australian Businesses. ABS Cat 8165.0.

[10] National Transport Insurance, 2016. NTI’s Guide to the Trucking Industry.

[11] NatRoad, (2021). Submission: Heavy Vehicle Emissions Standards for Cleaner Air.

[12] ATA, (2021). Submission: 2021-22 Heavy Vehicle Charges Consultation Report.

[13] The Australian Conservation Foundation (2021). Local community benefits of zero emission
vehicles in Australia

[14] Straif K, Cohen A, Samet J & International Agency for Research on Cancer (2013). IARC
Scientific Publication No. 161: Air pollution and cancer. World Health Organization, Geneva.

[15] Gan WQ, Tamburic L, Davies HW, Demers PA, Koehoom M, Brauer M (2010). Changes in
residential proximity to road traffic and the risk of death from coronary heart disease.
Epidemiology 21(5): 642-649.

[16] Bureau of Infrastructure, Transport and Regional Economics (BITRE) (2018). Progress in
Australian Regions, Yearbook 2018.

[17] Department of Infrastructure, Transport, Regional Development and Communications
(2021), Discussion Paper: Safer freight vehicles.

[18] The Driven (2021) VB beer deliveries go green with Volvo electric truck.

[19] The Driven (2021) Australia Post adds another 20 Fuso electric trucks to deal with increased
parcel volumes.

[20] ABC News (2021). Federation ‘ill-equipped’ to deal with 21st-century challenges as Australia’s
vulnerabilities rise

[21] Department of Industry, Science, Energy and Resources, (2021). Australian petroleum
statistics.
ELECTRIC TRUCK REPORT 20

[22] Australia Competition and Consumer Commission (2020) Oil companies authorised to
cooperate to secure fuel supplies during COVID-19

[23] Department of Industry, Science, Energy and Resources, (2021). Renewables.

[24] Transport and Environment (2020) Unlocking electric trucking in the EU: recharging in cities.

[25] EROAD, 2021. Road to Sustainability Report. Further data provided direct to the ATA.

[26] Drive to Zero (2021) How zero-emission heavy duty trucks can be part of the climate solution.

[27] Shell, (2021). Decarbonising road freight: Getting into Gear.

[28] World Economic Forum, (2021). Road Freight Zero: Pathways to faster adoption of zero-
emission trucks.

[29] The Department of Infrastructure, Transport, Regional Development and Communications
(2020). Heavy Vehicle Emissions Standards for Cleaner Air.

[30] NSW Government, February 2021. Retail deliveries project: summary of findings.

[31] Green Car Congress, (2020). CARB approves $28M investment in clean trucks, cars.

[32] NOW-GMBH.DE, (2021), Climate-friendly commercial vehicles and infrastructure
Electric trucks:
Keeping shelves stocked in a net zero world