National Electric Vehicle Strategy: consultation paper

31st October, 2022

Commonwealth of Australia
Australia’s National Electric Vehicle Strategy
Submissions to: NEVS@industry.gov.au

Subject: Truck Industry Council’s submission to the Commonwealth of Australia’s National
Electric Vehicle Strategy Consultation Paper – September 2022

The Truck Industry Council (TIC) is the peak industry body representing manufacturers and distributors of heavy commercial vehicles (that is, with Gross Vehicle Mass above 3.5t) or “trucks” in
Australia. TIC members are responsible for producing or importing and distributing 16 brands of truck for the Australian market, totalling more than 41,000 trucks in 2021. TIC members supplied to market over ninety-eight (98) percent of all new on-highway trucks above 4.5 tonne Gross Vehicle
Mass (GVM) sold in Australia last year.

Further, TIC also comprises of two dedicated engine manufacture members and two dedicated driveline manufacture members who supply major engine and driveline systems for both on- highway and off-highway “truck” applications.

Please note, that the TIC responses provided in this submission apply only to TIC members and their vehicle Brands. A list of the truck Brands who are TIC members and are represented by TIC can be found at the end of this document. There are other organisations that provide new trucks and heavy vans in Australia, above 3.5t GVM, who are not TIC members. TIC does not represent these Brands and the responses provided in this document/submission by TIC should not be taken to represent non-TIC members and their vehicle Brands.

General comment:
In this response/submission to the Commonwealth’s National Electric Vehicle Strategy Consultation
Paper, TIC will offer general comment and feedback on the issues raised in the Paper. TIC will detail the obstacles that we understand are preventing the reduction of carbon dioxide (CO2) emissions in the heavy vehicle (truck) transport sector, including the current slow uptake of zero emission (ZE) trucks in Australia. Further, TIC will offer our perspective and suggestions on policy and regulatory changes that are required to reduce CO2 emissions in the Australian heavy vehicle (truck) sector. As such, this response/submission will not specifically provide answers to the questions raised in the
Consultation Paper, however many of those questions will be addressed in the contents provided within this document.

Low and Zero emissions, NOT electrification:
TIC and TIC members do NOT support the government’s proposal for a National Electric Vehicle
Strategy. Rather, we believe that for the heavy vehicle (truck) sector, a national low and zero emission strategy that targets the reduction of CO2 emissions is required. The strategy must include

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and incentivise/promote all technologies and means of reducing heavy vehicle road transport greenhouse emissions. The strategy MUST be technology neutral and acknowledge that incremental improvements will be essential in meeting CO2 reduction targets, particularly in 2030/35, as there is currently no clear zero emission technology pathway that exists for all sectors of the heavy vehicle road freight industry.

TIC recommendation:
1. The federal government should develop a Low and Zero Emission Heavy Vehicle (Truck)
Strategy, NOT an electrification strategy.

The current reality:
As we approach the end of 2022, TIC expects approximately 43,000 new trucks and heavy vans, with a
Gross Vehicle Mass (GVM) of greater than 3.5t, to be sold in Australia this year. This will be a new sales record for heavy vehicles in Australia (the current new truck sales record was set in 2018, when
41,626 were sold). Of those approximately 43,000 new truck sales expected this year, approximately
40 will be ZE trucks (all battery electric trucks). That is just 0.1 percent of new truck sales. In addition to these ZE truck sales, approximately 40 Hybrid (diesel/electric) trucks will be sold in 2022. All of these ZE and Hybrid trucks are Light Duty trucks, sold into city/metro distribution applications. The low take up of these CO2 reducing vehicles is not due to availability/supply issues. TIC members could have provided at least a five-fold increase in these vehicle sales, however the demand/desire to purchase these low and ZE trucks, by operators, has not been forthcoming to date.

ZE truck technology lags passenger car development by approximately 5 years. While this gap is likely to close between now and 2030, there remain significant barriers for the uptake of ZE trucks.
Currently ZE truck technology is limited to city/metro, volume constrained freight, distribution applications. There is no viable ZE truck technology that is commercially available for intra and inter- state (long and line-haul) freight, multi-combination (B-Double, Road Train, etc) freight, remote area freight and mass constrained (building/construction materials, waste, refrigeration, etc) freight.
Therefore, the majority of road freight in Australia, in 2022, does not currently have a ZE solution. Of course, this will change in time, as ZE truck technology evolves.

To the above point of the evolution of freight tasks that can be undertaken by ZE trucks and the evolution of new ZE truck sales, TICs preliminary investigation/modelling suggest a year-on-year doubling of new EZ truck sales in Australia. This is without any specific intervention by government over and above the very limited incentives that current exist (typically simple sales tax and vehicle registration incentives and some project funding such as that provided by ARENA and the CEFC). By
2030, TIC estimates that one in four new truck purchases will be ZE trucks, that is 25 percent, or approximately 10,000 new ZE truck sales by 2030. That is a significant increase over 2022 ZE truck sales. By 2030, TIC expects that over 18,000 ZE trucks will be on Australian roads. However, that will equate to just 2 percent of the Australian truck fleet being ZE in 2030 once factoring in truck fleet growth to 2030. 98 percent of trucks will still be diesel. Even if we were to double the take up of ZE trucks between now and 2030, this would be a VERY ambitious goal and require significant government financial expenditure in the way of incentives, just 4 percent of our national truck fleet would be ZE by 2030.

It is obvious that other measures MUST be adopted along with the uptake of ZE trucks to reduce the
CO2 emissions from trucks. Other CO2 reducing measures that could be deployed in conjunction with the uptake of ZE trucks include:
• The use of renewable/bio diesel, either as a complete substitute for mineral diesel (R100), or
as a blend for use across the entire diesel truck fleet (potentially starting with R5).

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• Continued improvements in road freight productivity. Australia is a world leader in moving
more freight with less trucks. The up take of B-Double and Road Train combinations has
been a staple in the Australian road freight industry for decades. More recently we have
witnessed the rise of Performance Based Standard (PBS) vehicles, that allow even more
freight to be moved by a single truck/truck combination, whilst at the same time offering
improved road safety outcomes and reduced road pavement damage. However much more
is possible. Transport for NSW data shows that approximately 50 percent of truck/trailer
line-haul movements on the Hume and Pacific Highways (the number one and two freight
routes in Australia) are conducted with semi-trailers. Moving more of this freight on to B-
Doubles, or PBS A-Doubles would result in millions of tonnes of CO2 reduction each year, on
these two routes alone. Other benefits include less trucks on our roads, operator savings
and reduced road damage. However, the registration charges for these higher productivity
vehicles are disproportionately/excessively higher than for a semi-trailer combination,
making the viability of these higher productivity vehicles difficult to justify for smaller truck
operators. There is also the problem of ensuring a “full load” for these larger combinations,
again an issue for smaller operators when it come to justifying the purchase and operation
of a higher productivity vehicle. Mechanisms for freight consolidation are required to ensure
the full benefits of these higher productivity combinations can be justified, particularly for
the smaller operator.
• The adoption of ADR80/04 (Euro VI and alternatives) will result in an approximate 5 percent
CO2 saving for each new ADR80/04 truck that replaces an older model truck. Operators will
benefit from a reduction in fuel used. All Australian’s will benefit from cleaner air. However,
State and Territory governments must agree to axle mass concessions for these trucks in
order to offset the productivity loss due to the additional weight of this new cleaner, more
fuel efficient technology. Without these axle mass concessions, many operators may choose
to keep their older, less fuel efficient trucks (if they prove to be more freight productive
than a new ADR80/04 truck).
• The increased use of hybrid trucks. With CO2 savings in the order of 25 percent, the
increased take-up of hybrid trucks will provide a further mitigation to CO2 emissions. Hybrid
trucks have increased range when compared to current ZE trucks and are particularly suited
to stop start and mountainous terrain where frequent braking is required, quite common
driving conditions found on the East coast of Australia.

As detailed above TICs preliminary investigation/modelling suggest a 2 percent uptake of ZE trucks in Australia by 2030. However, similar analysis of the above additional measures to reduce truck
CO2 emissions illustrates the following potential for CO2 reductions in the Australian road freight sector by 2030:
Zero Emission trucks – 2%
Low Emission trucks (hybrids, etc) – 1%
The implementation of ADR80/04 – 2%
Renewable R5 diesel in use across the existing fleet – 5%
High Productivity Vehicles – 3%
TOTAL – 13%

This is a much better outcome than the sole introduction/uptake of ZE trucks (a 2 percent reduction) and could be achieved at a substantially reduced cost over attempting to incentivise solely the uptake of ZE trucks in an effort to obtain a 13 percent reduction in CO2 emission by 2030 in the heavy vehicle (truck) road freight sector.

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TIC recommendation:
2. The Low and Zero Emission Heavy Vehicle (Truck) Strategy should be technology neutral and
include a mix of solutions including:
• Increase heavy vehicle freight productivity (higher productivity vehicles, PBS, etc)
• The adoption of more fuel efficient technologies, ADR80/04: Euro VI and
alternatives. TIC acknowledges and welcomes the recent announcement by the
Albanese government to mandate ADR80/04. However, State and Territory axle
mass concessions are essential to ensure the take-up of these new cleaner, more fuel
efficient trucks.
• Renewable/bio fuels for use in existing diesel trucks
• Hybrid trucks
• Zero Emission trucks

The average age of the Australian truck fleet is 15 years (ABS Motor Vehicle Census data). Put simply, trucks sold today will likely still be on the road in 2052. The renewal of the Australian truck fleet and a move to a less CO2 emitting fleet will take time. Any government strategy must acknowledge the size of the task and must include plans to reduce the average fleet age, in order to hasten the transition to a low CO2 heavy vehicle transport sector.

Barriers to the uptake of Zero Emission trucks:
As detailed above, the current uptake of ZE trucks in Australia is very low. There are a number of reasons for this, including:
• Almost all Medium and Heavy Duty ZE trucks are currently manufactured in Europe, or the
USA and are 2.55m wide. These trucks cannot operate on Australian roads due to our
maximum vehicle width regulation of only 2.50m. There are a number of ZE truck trials in
Australia with 2.55m trucks, all are operating on restricted access permits. This is not a
viable way to operate any truck in Australia. Australia’s unique 2.50m width regulation is
the most significant current barrier to the uptake of Medium and Heavy Duty ZE trucks in
Australia.
• Operators will only embrace Low and Zero emission trucks if they are commercially viable
(compared to operating a diesel truck), this will be a financial business decision for
operators.
• Approximately 80% of trucking businesses in Australia operate 5, or less, trucks. These small
operators are not going to be early adopters of ZE trucks. For example, if an operator with 5
trucks replaces just one with an ZE truck and the operating cost justification is just a little
incorrect (quite possible because there are currently many financial unknowns in operating
a ZE truck) and the ZE truck costs more to operate than first estimated, 20% of their fleet
(one truck) is now under performing, that is significant financial impost for a small operator.
The percentage risk is even greater with operators with fewer than 5 trucks.
• ZE trucks are heavier than current diesel trucks. European countries recently announced
axle mass concessions for ZE trucks of up to 2,000kg. No such mass concessions are being
offered in Australia at present.
• Heavy vehicle dimensional reform (length dimensions) will also be required to allow a ZE
truck to be configured to better accommodate their heavier mass. For example, a
dimensional concession that would allow greater rear body overhang could be used to
mitigate some of the additional steer axle mass that is associated with a ZE truck (battery, or
hydrogen electric truck).

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• Australia’s current Road User Charging (RUC) scheme for heavy vehicles is fundamentally
flawed for use with ZE trucks. The universal view held by industry is that the RUC will need to
change to accommodate low and ZE trucks. But how and when, will this happen? As the RUC
is a significant cost in operating a heavy vehicle, RUC costings must be factored into the
business plan for the purchase of any new truck. However, with no visibility/understanding of
future RUC costs, it is impossible for an operator to currently complete an accurate mid to
long term cost analysis for a ZE truck. The same applies for a low emission (hybrid) and diesel
trucks. The only benefit of a diesel truck is there is “safety in numbers” (+99 percent of the
truck fleet is diesel, so all operators would typically be advantaged, or disadvantaged, equally
with RUC changes). A long term (10 year) plan is required for the RUC. This plan could include
charges not just for road damage, but also the environmental damage (noxious and CO2
emissions) that a truck creates. Possibly even a safety levy, as newer trucks with advanced
safety features are involved in fewer crashes, causing less road trauma.
• Australian Design Rules (ADRs) and VSB6 (Heavy Vehicle Modifications) need to “catch up”
with the latest safety, environmental and commercial regulations being introduced for ZE
trucks in regions such as Europe and the USA. Regulations for high voltage vehicle safety
(battery, electric motor and wiring), extreme pressure gas/liquid storage and transfer
(hydrogen gas), quiet road vehicle acoustic alert systems, battery charging safety, battery
useful/minimum life/performance requirements, are all regulations that Australia has not
adopted and this is no doubt slowing the uptake of ZE trucks in Australia, by adding to the
uncertainty of building and deploying a ZE truck on the road.
• There is a lack of ZE truck training and qualification courses currently available in Australia.

TIC recommendation:
3. Maximum Vehicle Width must be amended to 2.55m for trucks in Australia immediately.

TIC recommendation:
4. Heavy Vehicle (truck) axle mass limits and dimension (length) limits must be examined with a
view to allowing offsets/concessions for the additional mass of ZE trucks (compared to an
equivalent diesel truck).

TIC recommendation:
5. The Road User Charging (RUC) scheme should be reviewed to provide long term (at least 10
years) visibility of the charging structure for current diesel trucks, low emission trucks and
zero emission trucks.

TIC recommendation:
6. The federal Department of Infrastructure and Transport should review and implement
appropriate global safety, environmental and minimum life/performance requirements into
the vehicle ADRs. The National Heavy Vehicle Regulator should be funded/resourced to
provide the necessary revisions and additions to VSB6 to support the uptake of ZE trucks.

TIC recommendation:
7. TAFE should be funded/resourced to provide the necessary ZE truck training and qualification
courses required to support these new vehicle technologies.

“Quick Fixes” won’t work:
TIC does not support ZE truck retrofits. This would prolong the life of existing (old) trucks. The
Australian truck fleet is already too old. Retrofits cannot be integrated to the same level/standard as

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new truck Original Equipment Manufacturer (OEM) solutions. Retrofit organisations cannot hope to replicate the significant development and testing required to interface an entire new truck driveline with the safety features that are present in modern trucks. Governments should not incentivise a retrofit industry that will, at best, have a limited life. Then only to be in a position (government that is) to have to financially support a transition for those business away from the retrofit industry once it becomes apparent that the business model is not viable in the long term. Any ZE truck retrofit industry needs to be viable without any government assistance.

TIC recommendation:
8. Governments should not support, or seek to develop, a ZE truck retrofit industry, beyond any
development occurring due to normal commercial business practice (business as usual).

TIC does not support “used” ZE truck imports. This would likely set Australia up to become the
“dumping ground” for “spent” battery electric trucks. Noting that once battery life in an EV truck falls by more than 20-30 percent from new (a 20-30 percent reduction in range) the battery truck is most likely not fit for purpose. The current operational range of battery electric trucks significantly restricts their viability when compared to an equivalent diesel truck. Further reductions in range with “used” batteries (the only logical reason that another country would be allowing the export of their ZE trucks) would create unviable freight operations in Australia for these “used” trucks once they enter service, or shortly thereafter. The cost to renew the truck’s battery/batteries would most likely not be commercially justifiable, verses purchasing a new ZE truck in Australia.

TIC recommendation:
9. Governments should not support, or seek to develop, a program for the importation of
“used” ZE trucks that are not fit for purpose in Australia. Government should prevent
Australia from becoming the “dumping ground” for “used” ZE trucks.

Incentives that work:
TIC supports financial backing (including tax incentives) for local R&D and manufacturing of ZE trucks, ZE components and systems (batteries, system controls, complete trucks, etc). As well as low and zero emission transport fuels such as renewable/bio diesel and hydrogen.

TIC recommendation:
10. Government to provide financial support to Australian organisations for local R&D and
manufacturing of ZE trucks, ZE components and systems, low and zero emission transport
fuels.

The cost of purchasing a new low emission (hybrid), or ZE truck, can be significantly higher than purchasing an equivalent diesel truck. Also, there will be many (typically smaller) organisations who simply won’t be able to afford a new CO2 reducing truck. TIC supports “upfront” incentives that reduce, or even eliminate the cost differential between a conventional diesel truck and a low or ZE truck. However, there are other incentives that could be deployed that will drive the uptake of low and zero emission trucks more broadly. For example, a tax write-off scheme that would allow a business to purchase and write off a new low or ZE truck over the first tax cycle from when the truck enters into service, with the condition that the business who purchased the low/ZE truck must sell the truck within a set period (for example 3 years) of putting the truck into service. The sale price could be government set as part of the scheme at a percentage of the original purchase price (for example no more than 75 percent of the truck’s original purchase price). Failing to meet this criterion would cause the business to refund the tax write-off in full and depreciate the truck over the accepted depreciation period for a truck. This incentive would allow larger organisations to purchase the latest technology new low/ZE trucks, claim the tax incentive and then on sell the truck after a suitable period of time to a, typically smaller operator, at an affordable price. This would not

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only drive new low/ZE truck sales, as well as providing a range of cheaper, relatively new, second hand low/ZE trucks.

TIC recommendation:
11. Governments to provide innovative incentives to foster the uptake of new low/ZE trucks in
Australia. Incentives that then provide a viable supply of near new low/ZE trucks to market at
prices close to an equivalent diesel truck.

New government projects and tenders (Federal, State, Territory and Local) should specify a minimum percentage of ZE trucks to operate in/complete the project/work to be undertaken.
And/or specify maximum truck CO2 emission limits for the project/work that is to be undertaken.
Hence requiring the project/work to be partially, or fully, undertaken by low/ZE trucks.

TIC recommendation:
12. Federal, State, Territory and Local governments to implement mandated CO2 emission
requirements for trucks in all new projects/work contracts.

I trust that you find TIC’s submission acceptable and that the issues that have been raised in this document will be considered in the development of the Australian Government’s national strategy to significantly reduce carbon dioxide emissions from the road transport sector (not a plan for the wholesale transition to electrification for the sector).

Please contact the undersigned, on [redacted] for any questions about this submission.

Yours faithfully,

Mark Hammond
Chief Technical Officer

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Truck Industry Council member Brands:
Allison Transmissions Australia
Eaton Transmissions Australia
Cummins Engines
Detroit Engines
DAF Trucks
Dennis Eagle Trucks
Fuso Trucks and Busses
Freightliner Trucks
Hino Trucks
Isuzu Trucks
Iveco Trucks, Busses and Vans
Kenworth Trucks
Mack Trucks
MAN Trucks and Busses
Mercedes-Benz Trucks, Busses and Vans
Scania Trucks and Busses
SEA Electric Trucks and Vans
UD Trucks
Volvo Trucks and Busses
Western Star Trucks

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