National Electric Vehicle Strategy: consultation paper

Tasmanian Policy Exchange Submission to the National Electric Vehicle Strategy Consultation
Process
31 October 2022

To the National Electric Vehicle Strategy consultation and engagement team,

We welcome the opportunity to make a submission on this important topic and commend the government for affording the issue of Australia’s EV strategy the attention it deserves.
The University of Tasmania is deeply committed to sustainability and climate action. We were recently recognised by the Times Higher Education World University Impact Rankings 2022 as the number one ranked institution globally for climate action, are certified carbon neutral under the Commonwealth Climate Active program, have divested from fossil fuel-exposed investments in 2021, will electrify our University light vehicle fleet by end of 2023, have committed to a minimum 50% reduction in our gross carbon emissions by 2030, and were awarded the Sustainability Institution of the Year in the 2021 Australasian Green Gown
Awards, the highest recognition available in the sector for sustainability.
Given the University’s track record of research, education and organisational action on climate and sustainability issues, we strongly support the development of an ambitious, comprehensive, and equitable national strategy for driving electric vehicle uptake and broader transport decarbonisation.
The Tasmanian Policy Exchange at the University of Tasmania has made major contributions to climate policy in the Tasmanian context and is currently developing an Options Paper for reducing transport emissions here in Tasmania.
The attached submission outlines our views on the scope and ambitions of a future National
Electric Vehicle Strategy for your consideration. In this submission we focus in particular on the discussion questions relating to the goals and objectives of the strategy and driving EV uptake. We would be pleased to answer any other questions you may have or be involved in follow-up consultation activity if required.

Best wishes,
Lachlan Johnson, Richard Eccleston, and Corey Peterson

The Tasmanian Policy Exchange
University of Tasmania
Churchill Avenue, Sandy Bay,
Tasmania, Australia
Introduction
The Government’s consultation paper covers a wide range of relevant and important issues.
In this submission, we focus our attention on a handful of more specific areas: ambitious targets for EV uptake; emissions and fuel quality standards; the need for greater collaboration between all levels of government, industry, and civic actors on EV policy; and banning the sale of new internal combustion engine cars by 2035. As with all climate-related policy action, we argue here (as we have elsewhere) that Australia’s National Electric Vehicle
Strategy should be underpinned by three crucial principles:
- It must (at minimum) be consistent with the objective of limiting global warming to
1.5 degrees.
- It must be ambitious but achievable. Australia lags other developed countries on
vehicle emissions standards, fuel quality standards, and EV uptake among other
things. We can catch up, but we must inevitably aim to do so over a realistic
timeframe.
- Finally, it must be equitable. Achieving emissions reductions must not entrench or
exacerbate social and economic disadvantage or limit the mobility or access to
transport for low-income households.
The transport sector is one of this country’s most significant net emitters (19% of total national CO2-e emissions), which means that accelerating uptake of zero-emissions vehicles
(ZEVs) for those who need to drive (as well as encouraging greater use of public and active transport) will be essential to our climate change mitigation efforts.
Despite the crucial importance of transport decarbonisation, however, Australia is a long way off the pace set by more ambitious peers around the world. As a result, we are not only failing to reduce emissions as quickly as responsible global citizenship demands, but we are also ensuring that Australians are stuck driving some of the world’s most inefficient, expensive, and pollution-intensive motor vehicles.
As well as being bad for the climate and public health, this state of affairs has thus far prevented us from taking full advantage of lucrative emerging manufacturing and resources industries with the potential to generate economic windfalls and thousands of decent, well- paying jobs. In other words, a speedy and ambitious transition towards a zero-emissions transport system is not just a climate and public health imperative, it is also a major economic opportunity.
For Australia to catch up and reap the benefits of an expanded range of cheaper, greener, and more efficient light and heavy vehicles, we will require an aggressive and ambitious ZEV strategy that includes concrete targets and detailed strategic planning for their achievement.
We believe that such a plan should be structured around six elements:
- A staged transition towards a rigorous fuel efficiency standard for new vehicles that
can eventually align to the European Union’s Fit for 55 plan;
- Expedited adoption of a fuel quality standard aligned to Euro 6/VI (80mg/km NOx) for
light and heavy vehicles, including a maximum sulphur content of 10mg/kg;
- A ZEV uptake target aligned, at least, to the high-uptake scenario modelled in the
CSIRO Electric Vehicle Projections 2021 (~67% by 2030) and preferably to the ALP’s
commissioned modelling for the Powering Australia Plan (89% by 2030);
- A commitment to increase renewable energy generation sufficient to ensure that new
EV use is truly zero-emissions;
- A commitment to ban the sale of new internal combustion engine vehicles by 2035.
- Enhanced coordination with other tiers of government to support the rapid and
efficient electrification of Australia’s transport system.
Pursuing ambitious targets like these will require an urgent change of direction and will not be easy to achieve. This approach, however, would help Australia to catch up with leading jurisdictions overseas and ensure that we have access to cheaper, safer, cleaner, and greener transport.
Goals, objectives, and scope of strategy
The NEVS consultation discussion paper outlines a strategic framework structured around five goals. We support the stated goals in principle. However, we believe that the strategy should include an additional goal that integrates the NEVS with policy to increase renewable electricity generation such that increased electric vehicle uptake can be powered by renewable sources.
We also suggest that the stated goals be made time-bound and more specific, including concrete metrics and dates set for their achievement. This is particularly true for goals two and three: both should be reformulated as explicit and time-bound targets. Modelling of the
Powering Australia Plan produced for the Australian Labor Party by RepuTex projects that
89% of new car sales will be EVs by 2030 under the policy – to provide certainty for business and allow consumers to make informed purchasing decisions, this projection should be adopted in the NEVS as a firm target.
Discussion questions
1. Do you agree with the objectives and do you think they will achieve our proposed
goals? Are there other objectives we should consider?
The goals as stated, and the objectives outlined to meet them, are commendable and we support them. However, we believe that rephrasing them as targets – and including metrics, indicators, and dates by which they are to be met – will enhance the credibility of the strategy. We also believe that a further goal, regarding increased renewable electricity generation sufficient to power growing EV uptake, should be added.
2. What are the implications if other countries accelerate EV uptake faster than
Australia?
Global supply of electric vehicles is limited. If other countries continue to outpace Australia due to their more attractive regulatory regimes, the Australian market will remain a ‘dumping ground’ for the world’s least efficient and most polluting cars, which is to the detriment of
Australian consumers, economy, and public health.
3. What are suitable indicators to measure if we are on track to achieve our goals and
objectives?
The strategy should include an uptake target to measure progress, with regular reporting and review mechanisms to ensure accountability. The target should be aligned, at least, to the
CSIRO’s high uptake scenario from their Electric Vehicle Projections 2021 (~67% by 2030) and preferably to the ALP’s commissioned modelling for the Powering Australia Plan (89% by
2030).
Driving EV demand and increasing availability
The single most important factor in driving demand for, and increasing availability of, EVs in
Australia will be an aggressive vehicle emissions standard. A fuel efficiency standard based on the EU regime is a proven and equitable (the costs are borne by purchasers of new ICE vehicles) approach to increasing the supply of ZEVs on the Australian market.
Finally, Australia should bring forward the adoption of more rigorous fuel quality standards.
The high sulphur content of Australia’s low-quality petroleum fuels has meant that cutting- edge innovation in ICE fuel efficiency cannot be deployed here. In other words, encouraging higher EV uptake via emissions standards will only be part of the solution to Australian transport emissions. Bringing our fuel quality standards into line with the rest of the developed world will also increase our access to cheaper, cleaner, safer, and more efficient
ICE vehicles as well. In addition to emissions standards, requiring faster uptake and higher penetration of EVs in government fleets, as well as fringe benefits tax incentives for corporate fleet and employee purchase schemes, will increase the availability of EVs in the second-hand market.
Discussion questions
4. Are there other measures by governments and industry that could increase
affordability and accessibility of EVs to help drive demand?
Yes. While some of the most influential policy levers (such as parking incentives, stamp duty concessions, and public transport) are controlled by state and local governments, the
Commonwealth should explore ways to increase EV imports and especially fleet-level EV uptake. Fringe benefits tax concessions and import duty concessions are both commendable initiatives in this regard.
5. Over what timeframe should we be incentivising low emission vehicles as we
transition to zero emission vehicles?
We believe that the Commonwealth should aim to phase out the sale of new ICE vehicles by
2035. While this timeframe should guide efforts to incentivise the EV transition, EVs will reach price parity earlier than 2035. This means that low-emission ICE vehicles are at best a temporary bridging solution, but they are nevertheless important. Ultimately, however, manufacturers currently have little incentive to import them due to our poor fuel quality and the absence of a vehicle emissions standard. Therefore, these should be the immediate priority.
6. What information could help increase demand and is Government or industry best
placed to inform Australians about EVs?
A high percentage of prospective purchasers already say that they would like their next vehicle to be an EV, but many are concerned about the high sticker price, range, and accessibility of charging infrastructure. If government incentivises EV purchases and ensures that charging infrastructure is readily available, industry will do the rest.
7. Are vehicle fuel efficiency standards an effective mechanism to reduce passenger and
light commercial fleet emissions?
Yes. A large body of research conducted across a wide range of jurisdictions from all over the world (some examples are available here, here, and here) has clearly demonstrated that vehicle fuel efficiency standards are the single most important tool in the Commonwealth’s arsenal for increasing EV supply and driving down transport emissions. Academic experts, advocates, and even manufacturers themselves recognise that the absence of vehicle emissions standards currently act as a major disincentive to import either zero-emissions cars or more fuel-efficient ICE vehicles.
8. Would vehicle fuel efficiency standards incentivise global manufacturers to send EVs
and lower emission vehicles to Australia?
Yes. Research, practical experience, and manufacturers themselves all support the proposition that vehicle efficiency standards will increase the supply of EVs. In the current regulatory environment, manufacturers simply have no reason to send EVs to Australia when they can be selling them in jurisdictions with emissions standards instead.
9. In addition to vehicle fuel efficiency standards for passenger and light commercial
vehicles, would vehicle fuel efficiency standards be an appropriate mechanism to
increase the supply of heavy vehicle classes to Australia?
Heavy vehicle purchasers are much more sensitive to whole-of-life cost than private car purchasers. Recent modelling from the Boston Consulting Group suggests that the whole-of- life cost of zero-emissions buses and heavy vehicles will reach parity with ICE vehicles in the very near future. If the Commonwealth can ensure that charging infrastructure is readily available, corporate fleets are likely to quickly transition to zero-emissions options given their operational cost savings.
12. How could we best increase the number of affordable second hand EVs?
Incentivising fleet purchases of EVs via fringe benefits tax concessions will eventually have a major impact on the second-hand market. In the meantime, however, the government should be supporting organisations that import EVs and aiming to help scale our small but emerging electric conversion industry. A related priority is ensuring that all levels of government collaborate to support business and social enterprises to establish EV car sharing models in major Australian cities. Such models are well established in European and North
American cities and offer numerous benefits including:
- Increasing the utilisation (and emissions reduction) of the limited number of EVs on
Australian roads;
- Enabling motorists who can’t afford to purchase an EV access to zero emissions
vehicles;
- Decreasing the number of ICE vehicle on Australian roads. Research form the United
States found that 41% of households who join an EV sharing club sold a vehicle within
6 months.
13. Should the Government consider ways to increase the supply of second hand EVs
independently imported to the Australian market? Could the safety and consumer
risks of this approach be mitigated?
Yes. The government should be supporting innovative second-hand EV importers such as the
Good Car Company in Tasmania to increase the supply of affordable second-hand electric vehicles. Investment in training and reskilling for mechanics and for electric conversion should also be considered as a priority. Finally, the Commonwealth should be wary of protective regulation efforts on the part of established importers and retailers of new vehicles to prevent the importation of quality second hand EVs.
EV supply chain
Australia’s plentiful recoverable deposits of cobalt, copper, nickel, lithium, and rare earth metals mean that we are already well placed to capitalise on the electric vehicle revolution.
Currently, however, most of these resources are processed elsewhere meaning that Australia misses out on the employment, innovation, and productivity benefits of more sophisticated value-adding industries at home. While Australia does have a strong heavy vehicle and defence manufacturing industry, as well as a small handful of niche high-end light vehicle producers, our national capability in automotive manufacturing is a shadow of its former self.
It is highly unlikely that Australia will re-emerge as a competitive destination for mass production of light passenger vehicles, but this does not mean we cannot capitalise on demand for key components – particularly batteries.
Systems and infrastructure
The prospect of a rapid uptake of electric vehicles in Australia raises two key infrastructure and systems challenges. Crucially, these challenges will require close and intensive collaboration among federal, state, and local government.
The first is the availability and accessibility of both public and private charging and electricity transmission infrastructure. Survey research suggests that after cost, which will decrease as technology and model availability improve, the most common concern expressed by prospective EV purchasers is the availability and accessibility of charging infrastructure.
The second major systems challenge concerns increasing renewable generation within the nation’s electricity grid. In order to ensure that new EV purchases charged from the electricity grid are having the maximum emissions reduction benefit, we will need to increase renewable energy generation capacity and ensure that transmission infrastructure can adapt
to changing load patterns and increasing penetration of rooftop solar and residential battery installations.
A further consideration is the fact that innovations like bidirectional charging are also likely to be both a benefit and a challenge for our electricity grid and transmission infrastructure as currently configured. Bidirectional charging, or two-way charging, refers to the ability of EV owners not only to use power from their homes (often via rooftop solar) to charge their EV batteries, but also to use their EV batteries to power their homes. Widespread uptake of bidirectional charging combined with significantly increased penetration of rooftop solar PV systems and growing electricity demand could drastically alter the way that Australian electricity is generated and stored, with important knock-on effects for transmission and grid infrastructure, wholesale pricing, community disaster resilience, and energy security.
Finally, as noted in the discussion paper, reliance on fuel excise – a hypothecated tax used for funding of Commonwealth road infrastructure projects – presents a barrier to speedy and efficient transport sector reform. The imposition of road user charges on EV owners to replace lost revenue from the fuel excise would recoup foregone resources for vital infrastructure spending but could also act as a disincentive for prospective purchasers. The absence of such a charge, however, shifts the burden of infrastructure spending from which all road users benefit onto poorer motorists who cannot afford the higher upfront cost of purchasing an EV. We believe that, over time, Australia should gradually transition away from the use of the fuel excise (or a replacement hypothecated/earmarked vehicle) and fund
Commonwealth transport infrastructure projects from general revenue. In the meantime, however, we believe that the imposition of road user charges should be delayed until EVs reach price parity with ICE vehicles. Once this occurs, such a charge would ensure that EV owners are paying their fair share without acting as a disincentive to further EV uptake.
Governance and intergovernmental collaboration
The most important area of EV policy action not addressed at length in the NEVS Consultation
Paper concerns intergovernmental collaboration. An effective strategy to drive higher levels of EV uptake cannot be implemented at the Commonwealth level alone; rather, impactful EV policy must be delivered in close partnership with state and local governments. Many individual state and local governments now have their own EV strategies, and many critical policy levers – including important regulatory and infrastructure responsibilities, stamp duty, parking, development, and strategic settlement and land-use planning among others – are controlled by the lower tiers of the federation. Individual government initiatives are unlikely to be as effectives as they could be unless these domains of action are meaningfully coordinated. For this reason, the development of a truly ‘national’ EV strategy should be a priority for the Infrastructure and Transport Reform Committee of National Cabinet.