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Dr Mark Dean is the Laurie Carmichael Distinguished Research Fellow at the Carmichael Centre, in the Centre for Future Work at The Australia Institute. He spoke to William Poole. AMT: You were recently the author of a report ‘Rebuilding Vehicle Manufacturing in Australia’. Tell us a little about its findings. Mark Dean: My report shows that Australia has all the key elements to develop an electric vehicle (EV) manufacturing industry in this country. We have rich mineral reserves. We have an advanced industrial base. We have a highly skilled workforce. And we have consumer interest, not just in the purchase of EVs, but also in seeing an EV manufacturing industry in Australia. The one thing we lack is a Federal Government with the political will to create an active, interventionist industry policy to bring those pieces together and develop a plan for the growth of an EV industry, which could effectively be economy-transforming. And I’ve developed four building blocks around areas that would be fundamental to an industry policy for EV manufacturing in Australia. AMT: Would this be a significant export industry as well? In the past Australian car-makers often struggled outside the domestic market. MD: Yes, it would absolutely be an export-focused industry. It would need to be. And EV manufacturing would really form the most critical pillar of what should eventually become an industry that diversifies into electric buses, electric trucks, rail transport, and right into what I call “applied renewable technology solutions”. If we get the industry policy right, what we’re ultimately doing is diversifying our ability to develop solutions for all types of renewable energy applications, and in the process exporting that knowledge and expertise to the world. That all starts with the EV manufacturing industry. I should add that there were times in the past when we were also exporting vehicles. US Police Departments in California, Michigan and Florida were procuring Holdens from Australia, for example. But I take your point that Australia was bad at exporting the units we were producing. We weren’t producing enough to export at scale, and we weren’t meeting local demand for smaller vehicles – Holden in particular. We were always making larger vehicles. AMT: Can you talk a little more about those key advantages Australia enjoys in the EV space? MD: So let’s go through the four building blocks. Number one: vast lithium reserves that at the moment we mostly export as a raw commodity to other countries, who turn them into batteries overseas and sell them back to us at a premium. In 2017 raw commodity exports and lithium generated $2.1bn of revenue for Australia, but the Future Batteries Cooperative Research Centre shows that battery production generated $22.1bn for those countries overseas – more than ten times the revenue from our exports. We need to develop processing capabilities onshore, near the lithium if possible. Perhaps even the Pilbara could become a processing region, with the infrastructure, trains, ports access to shipping. So that’s one piece. Next, the development of supply chains is critical. We need to scale up the SMEs, make them feature more as part of our industry ecosystem, strengthen them to become the major links between processing and manufacture. There’s a huge piece there.
AMT APR 2022
We have a skills base, but we will need entirely new training packages and units of competency to create the skills for EV manufacturing. My report demonstrates that Australia’s training capabilities in vocational education and training at present still consider EVs as hybrid-only. There’s no training and units of competency that consider training for EV manufacture as a whole new separate entity. That’s a critical skills gap that can be addressed with full, adequate funding of TAFE, because TAFE was critical to manufacturing regions in the past. One of my recommendations is to provide TAFE free as a transitionary labour market policy to help former auto workers retrain and reskill, and to address the shortfall in apprenticeships and traineeships we’ve seen over the last ten years as government funding has been stripped from TAFE institutes around Australia. The fourth point is consumer interest and demand. Not only do a majority of Australians support EV uptake among consumers, they want to see EVs manufactured in Australia. There is majority public support for this becoming how we transform our manufacturing industry and how we address climate change. The public knows we used to manufacture things; it was brought more to our attention during the pandemic with Australia’s inability to produce vaccines, rapid antigen tests and personal protective equipment. These are things we should be self-reliant in. But it’s become clearer to Australians than ever before that when we lost manufacturing capabilities, we lost the ability to do so many things we take for granted. So government would provide incentives for consumers to purchase EVs and create local domestic demand for vehicles that are made in Australia. AMT: Obviously we did have a car industry, but the last car-makers left Australia a few years ago. What would be different now that means this industry would grow and prosper? MD: There are a number of factors here. First, the increasing withdrawal of an active government role in industry policy formation since the 1980s was of great detriment to the manufacturing sector. The idea that market forces would drive continued development was frankly stupid – to think a country as remote as Australia could sustain a global export industry without government support. No other country with an advanced manufacturing sector – and largely that means an auto manufacturing industry – allows market forces to dictate how their industry transforms. Government is active at all levels of investment, at state, local and federal levels, in countries like Germany, the US, Japan. None of them leave their most innovative, R&D-intensive, knowledge-intensive industry exposed to global market volatility. They provide sophisticated assistance through government investment and active intervention in creating and shaping the markets for the industry’s expansion. In the Australian case, what happened is in 2013 Australia had just ridden the wave of the global financial crisis with our commodities boom. But our exchange rate with the US was through the roof. At its peak we were buying a US$1.10 for every Australian dollar. So travelling to the US at that time was fantastic, but it disguised the effect that exchange rate had on manufacturing. We were no
