National Electric Vehicle Strategy: consultation paper

Submission to the National Electric
Vehicle Strategy Consultation
Paper 2022
31 October 2022

About ACOSS

The Australian Council of Social Service (ACOSS) is a national voice in support of people affected by poverty, disadvantage and inequality and the peak body for the community services and welfare sector.

ACOSS consists of a network of approximately 4000 organisations and individuals across Australia in metropolitan, regional and remote areas.

Our vision is an end to poverty in all its forms; economies that are fair, sustainable and resilient; and communities that are just, peaceful and inclusive.

Submission supported by

Discussion
Climate change disproportionately impacts people who face disadvantage including people on low incomes, people with disability, people with chronic health issues and Aboriginal and Torres Strait Islander peoples. A rapid transition to net zero emissions is therefore critical to reducing the impact on people facing disadvantage.
We, therefore, welcome the Commonwealth Government's commitment to reducing emissions to tackle the climate crisis, including transport emissions which are the second largest national source of emissions (19%). We support

© ACOSS 2021, Locked Bag 4777 Strawberry Hills NSW 2012
Ph (02) 9310 6200 E: info@acoss.org.au
www.acoss.org.au
the development of a national electric vehicle strategy and welcome the opportunity to provide input.
We agree with the discussion paper that reducing transport emissions and increasing access to zero-emissions vehicles (ZEVs)1 provides a significant opportunity for Australia. For people, a fair, fast and inclusive transport strategy can improve access to different transport options, improve health, reduce noise, reduce emissions, reduce costs of transport, and power the home. If integrated well, ZEVs can help support a more efficient and affordable electricity grid. These benefits are in addition to broader economic and employment opportunities.
However, in order to achieve benefits for everybody, the transition to net zero emissions must be fair and inclusive. We know that people experiencing disadvantage are currently impacted by transport inequality. They are more likely to live farther from public transport and community hubs, more likely to be time-poor, more likely to travel outside of peak hours and more likely to rely on private transport. This inequality is being exacerbated by the current fuel crisis with people on low-fixed incomes struggling to afford fuel and reporting difficulties affording to travel to work, medical appointments and other commitments.
We are concerned that without clear goals and objectives that include the need to reduce current transport inequities, the strategy and policies to accelerate zero emissions vehicles (ZEVs) uptake could miss an important opportunity to improve equity of access to transport or, worse, inadvertently increase inequality in Australia. For example, research coming out of the United States found that 90% of households in the US that had received $18 billion in rebates and tax credits for installing solar panels, buying ZEVs and other ‘clean energy’ investments, were in the top income quintile with the bottom three quintiles receiving only 10%.2 The research also found that more than half of people purchasing a ZEV said the schemes made no difference to their plans or ability to obtain the vehicles.
In Australia, we are seeing households with higher wealth, primarily those that own their own home, accessing subsidised rooftop solar and obtaining the benefits it provides, including cheaper household energy bills, while low- income households are largely missing out on such benefits.3
Researchers at NATSEM modelled what it would take to stimulate electric vehicle
(EV) uptake, using policies in the Australian Capital Territory (ACT) as a basis for their modelling. They found that price and income matter. Their research found that high-income households are far more likely to replace their cars within five years and far more likely to switch to electric even without incentives – and that

1 Includes cars, micro-mobility, motorbikes, light and heavy vehicles, and public transport
2Nguyen, J. ‘The Adoption of Zero-Emissions Vehicles by Low-Income Consumers in California: An outcome evaluation of the clean vehicle rebate project’ San Jose State University, 2020, accessed
23 August 2022
3ACOSS and BSL (2018) Energy Stressed in Australia. https://www.acoss.org.au/wp- content/uploads/2018/10/Energy-Stressed-in-Australia.pdf

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for them, the incentives didn’t make much difference. They concluded that policies that increase the electric vehicle take-up in lower-income households, including access to affordable cars, targeted subsidies and no- interest loans, are likely to have the greatest effect, and also likely to benefit these households by freeing them from the need to pay for fuel.4
Internationally some countries have implemented incentives that aim to be equitable and sustainable and/or policies specifically targeted to provide access to EVs for people on low incomes. For example, New Zealand has the following measures5:

⚫ Fuel efficiency standards, which provide incentives for more car makers
to supply low and zero emissions vehicles to a country, increasing access
to more affordable EVs.
⚫ Incentives to purchase zero and low-emission light vehicles by reducing the
cost via eligible new and used vehicles coming into New Zealand and putting
a fee on certain high-emission vehicles.
⚫ Targeted financial assistance to lower- and middle-income people to trade in
their old car for a subsidised electric vehicle.
⚫ Vehicle social leasing scheme, leasing low-emission vehicles to low-
income households, for people for whom any vehicle at all would be a
significant luxury.
⚫ Investment in a national and urban programme to support people shifting to
active and shared modes, to reduce kilometres travelled in New Zealand’s
largest cities.

Access to charging infrastructure should also be prioritised with targeted policies to ensure people on low incomes get access. Many people on low incomes rent their homes, live in multi-unit complexes and/or in regional and remote areas, and are unable to install or access chargers. Support must include plans for affordable and easy access to charging infrastructure, including ensuring all new multi-unit developments and dwellings are fitted with the capacity to charge electric vehicles.
Finally, we should be using the transition to a clean economy and the shift to
ZEVs to create more sustainable, affordable and accessible transport that better meets the needs of the community. A focus on incentivising uptake of privately owned passenger cars only will not deal with increasing congestion and transport inequality. The national electric vehicle strategy should be expanded to include a focus on reducing the reliance on privately owned cars by investing in greater

4
https://theconversation.com/what-would-it-take-to-get-australians-to-buy-electric-cars- canberra-provides-a-guide-178778
5
https://www.beehive.govt.nz/release/transport-drive-down- emissions#:~:text=%24569%20million%20for%20Clean%20Car,upon%20scrapping%20their%2
0old%20vehicle

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access to zero emissions public transport, shared transport, walking,
cycling, mode shifting and other transport options.
Any national strategy to accelerate EV uptake and sustainable transport must include support to enable low-income households to access low-emissions vehicles and transport, as these are the people who already experience transport inequality, who are most impacted by the rising costs of fuel and the least able to make the transition without assistance.

Recommendations
Recommendation 1 - Amending the goals of the national EV strategy -
The goals are too narrow. They silo EVs from the need for broader transport solutions to create zero emissions, including sustainable transport systems that better meet the needs of the community and reduce transport inequality.
The current goals also do not consider the enabling environment necessary for a smooth and efficient transition, including issues such as tariff reform, grid capacity and road pricing. We recommend replacing the current goals6 with the following:
1. Develop an efficient and sustainable transport system.
2. Accelerate adoption of zero emissions, electric and active transport.
3. Make transport of all kinds more affordable and accessible.
4. Prioritise fair and inclusive ZEV and transport solutions and improve
equity of access to transport.
5. Rapidly reduce emissions.
6. Create a smooth transition environment for ZEV users, industry and
the electricity grid.
7. Increase local manufacturing.

Recommendation 2 - Amend the Objectives of the national EV strategy - update the objectives to reflect the new goals.

Recommendation 3 - Develop policy assessment tools - develop principles, risk assessment, and analysis of costings/impacts, to evaluate policies and measures to ensure they meet the goals and objectives including wellbeing and equity (including gender equality).

Recommendation 4 - Establish a more extensive consultation process to ensure we get policies right - The initial consultation process has been less than 5 weeks which has not allowed enough time to provide considered input across the broader range of sustainable transport issues. While it's imperative to move quickly to accelerate the decarbonisation of the transport sector to meet

6Goals in the paper are 1. Make EVs more affordable 2. Expand EV uptake and choice 3. Reduce emissions 4. Save Australians money on fuel 5. Increase local manufacturing.

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our emissions reduction goals, there is a risk that rushed policy could result in unintended consequences, increase transport inequality and miss important opportunities to coordinate with other policy priorities. We think it would be helpful to identify areas that (a) can progress immediately, (b) should be prioritised for quick action but require further consultation and (c) can be developed in time. The table in the appendix provides an outline of potential policy levers to meet the goals identified above and proposes timelines for progress.

To progress potential policy levers listed in the column to ‘prioritise for quick action but require further consultation’, we recommend the Government host a series of roundtables in the first half of 2023 to further explore and evaluate additional policy levers to ensure the goals and objectives are met. We urge
Government to seek input from the public, especially people who are likely to be locked out of EVs in the short to medium term.

Recommendation 5 - Phase out Fuel Tax Credits (FTC) - Fuel tax credits offset the costs of fuel in machinery, plant, equipment, heavy vehicles, and light vehicles travelling off public roads. These credits currently cost the budget more than $8 billion a year and subsidise carbon pollution – the very thing governments are spending public funds in other parts of the economy to mitigate. The subsidy distorts the need for energy efficiency, fuel switching, or investment in other forms of renewable energy or transport.

Government can use revenue from phasing out FTC to (a) support the uptake of electric vehicles, electrification or energy efficiency in impacted industries, and
(b) assist low-income households to access affordable clean energy and build resilience to climate change.

Recommendation 6 - Key policy levers - The table in the appendix outlines key policy levers that could be considered to meet the goals identified, along with a timeline for progression. We highlight the following policies for attention as a priority:

A. Quickly implement ambitious fuel efficiency standards for passenger
and light commercial vehicles in Australia. Australia has around 20% higher
emissions than the United States and around 40% higher emissions than
Europe. The lower fuel standards mean car manufacturers are not prioritising
supplying low and zero-emissions vehicles in Australia and are instead
effectively dumping higher emissions vehicles not able to be supplied to
other countries in Australia. The lack of standards in Australia means people
are paying more for transport costs and are not gaining access to a wider
range of more affordable EVs that are being sold in jurisdictions with
stronger standards.

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B. In consultation, develop ZEV targets including across income,
equity, and transport segments. The targets should be designed to promote
the transition away from internal combustion engine vehicles (ICEVs) to
ZEVs, rather than just to increase supply. Setting targets can stimulate
demand and support a smooth and equitable transition.

C. Create a second-hand market to provide lower costs vehicles through
Government, business and community sector fleet targets. We welcome the
Federal Government's target of 75% of new purchased and leased vehicles
in the Commonwealth fleet to be EVs by 2025. We encourage the
Government to:

i. Work with State and Territory Governments and Local Councils to set
similar targets;

ii. Provide support to purchase EVs to the community services sector
where many organisations have fleets of cars across cities, urban, rural
and remote areas to provide essential services to communities; and

iii. Consider ways to quickly increase the supply of second-hand
EVs independently imported to the Australian market, without
compromising safeguards and consumer protections.

D. Develop a package of measures to directly support uptake of EVs for
lower-income households. The package could include measures such as:

i. Allocating a percentage of second-hand cars to be made available
to people on lower incomes.

ii. Targeted means-tested subsidies.

iii. Access to no-interest loans.

iv. Social leasing scheme to low-income families (see New Zealand
Policy7).

E. Prioritise and facilitate alternate sustainable and affordable transport
options to reduce reliance on private ownership of vehicles by increasing
federal, state and local government investment in zero emissions public
transport, car share and shared mobility services, walking, cycling, and other
affordable, clean and accessible transport options.

7
https://www.beehive.govt.nz/release/transport-drive-down- emissions#:~:text=%24569%20million%20for%20Clean%20Car,upon%20scrapping%20their%2
0old%20vehicle.

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F. Develop consumer protections. Develop regulations and safeguards to
ensure that people and communities have appropriate protections including:
i. Protection against risks - such as limited battery life in second-hand
cars.

ii. Access to affordable and reliable insurance products when
purchasing second-hand electric vehicles.

iii. Maintaining ‘consumers' right to repair’ by preventing market
participants from unfairly and unreasonably impeding third-party
access to repair supplies.8

G. Develop efficient and equitable ZEV network tariffs. With the right
incentives, electric vehicles offer a new opportunity to improve utilisation of
the electricity system, by charging when demand is low or surplus renewable
energy is available. Designed poorly, ZEVs network tariffs risk dramatically
increasing peak demand at a considerable cost to all consumers, including
those who can’t have electric vehicles. For example, Network providers in
NSW are proposing to extend evening peak periods that apply to all energy
users, to accommodate predicted peak demand from EVs. This will reduce
cost efficiency and increase costs for many consumers including people on
low incomes. To put this incentive in place, all energy network businesses
should offer ‘basic’ EV-specific network tariffs immediately and commence the
development of ‘smart’ EV network tariffs ahead of EV’s reaching high levels
of penetration in their networks.

The development of appropriate ZEV tariffs is also a key enabler for a range
of potential new use cases for ZEVs that can improve affordable access to
transport such as vehicle share schemes.

H. Pause the pursuit of removing the Fridge Benefits Tax on EVs -
Removing the FBT on cars is estimated to cost $20 million in the first year,
benefitting around 2,200 vehicle owners. The cost estimates double in the
following year and rise to $90 million in 2025–26. ACOSS does not support
this reform, as it is regressive, benefiting a narrow class of employees,
providing the largest benefit to the highest-income earners. It is not
consisted with the goals of equity and inclusion and risks further entrenching
transport inequality. Considering the recommendations above, we urge the
Federal Government to put a hold on the reforms to eliminate the Fridge

8 Inquiry report - Right to Repair - Productivity Commission (pc.gov.au) p. 12-13.

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Benefits Tax on EVs and reconsider its suitability after other policy levers
to more equitably increase EV adoption and affordability are considered.

Acknowledgements
This submission was prepared in consultation with the ACOSS Climate and
Energy Policy Network. We’d also like to acknowledge the contributions of
ClimateWorks Australia and The Energy Efficiency Council.

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Appendix: Sustainable transport policy levers
Goal Key Policy levers

Immediately Prioritise with further consultation Consult further
implement

Develop an ⚫ Phase out Fuel Tax ⚫ Increase Federal, State and Local Government ⚫ Equitable Road Pricing.
efficient and Credit (FTC) and use investment zero emissions public transport, sustainable a portion of funds to ⚫ Invest in mode shifting.
walking, cycling and other transport options.
transport incentivise the system transition to electric ⚫ Equitable and efficient EV network tariffs. ⚫ Incentivise vehicle-asa-
vehicles and portion service (VaaS) such as
to support people on car share and shared
low-income access mobility. For example,
to affordable clean require a portion of
energy and build former fleet vehicles for
resilience to this purpose.
worsening extreme
⚫ Mapping and
weather events.
developing the supply
chain and other
industry requirements
for the reconditioning
and re-use of ZEVs
beyond end-of-battery
life.

© ACOSS 2021, Locked Bag 4777 Strawberry Hills NSW 2012
Ph (02) 9310 6200 E: info@acoss.org.au
www.acoss.org.au
Accelerate ⚫ Fuel efficiency ⚫ Stimulate second-hand EV vehicles via:
adoption of zero standards to increase  Government, business and community
emissions, manufacturers' sector fleets.
electric and vehicle offerings in  Facilitating second-hand imports.
active transport the Australian
market ⚫ Financial incentives for EVs that are equitable
and sustainable, that incentives EVs and
reduce fossil fuel vehicle demand (see New
Zealand or Norway models)

⚫ Set interim and 100% uptake targets for
zero-emissions vehicles, potentially by sector
and income level.

⚫ Invest in charging infrastructure, including
in low social economic areas and regional
and rural Australia.

Make transport ⚫ Fuel efficiency ⚫ Stimulate the second-hand EV market, as ⚫ Invest in mode shifting.
more affordable standards to increase above.
and accessible ⚫ Incentivise vehicle-as-a-
manufacturers'
⚫ Financial incentives for EVs that are equitable service (VaaS) such as
vehicle offerings,
and sustainable, as above. car share and shared
including cheaper mobility. For example,
EVs require a portion of
⚫ Federal and State Governments work together
former fleet vehicles for
to develop plans and invest in other forms of
this purpose.
zero-emissions transport including public
transport, walking, cycling, mode shifting and
other transport options.

⚫ Targeted programs for people on low incomes,
as below.

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Prioritise ● Fuel efficiency ● Stimulate second-hand vehicles as above
fair and standards to increase ● Targeted programs for people on lower
inclusive manufacturers' incomes.
ZEV and vehicle offerings,  Allocating a percentage of second-hand
transport including cheaper cars to be made available to people on
solutions EVs lower incomes.
and reduce
 Targeted means-tested subsidies.
transport
 Access to no-interest loans.
inequality
 Social leasing scheme to low-
income families
 Improve access to alternative transport
options such as public transport, car
share and shared mobility, cycling, etc.
● Charging infrastructure retrofits for public
and private rentals, apartments, and low-
income households.
● Equitable and efficient EV network tariffs.

Rapidly reduce ● Fuel efficiency ● Set emission reduction targets for the
emissions standards to reduce transport sector, potentially different
emissions level of targets by sector.
cars in Australia.  Targets aligned with 1.5 oC
 Set interim targets
 Set 100% uptake targe

Create a smooth ● Invest in charging infrastructure, including in ● Public education and
transition low social economic areas and regional and awareness campaigns
environment for rural Australia. ● Manage electricity grid
ZEV users, capacity.
industry and the ● Develop regulations and safeguards to ensure
electricity grid that people and communities are protected ● Policies to maximise
against risks (second-hand batteries, the benefits of

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insurance, access third party repairs, connecting EVs to the
access charging infrastructure) grid (e.g. using their
batteries for vehicle-
to-grid services if
possible)

⚫ Update the building
code to require new
housing has wiring
and space ready for
EV infrastructure.9

Not ACOSS policy Not ACOSS policy expertise Not ACOSS policy
Increase local
expertise expertise
manufacturing

9 Recent building code updated requires new apartment buildings to have wiring and space for EV charging in carparks

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