Plan Now for Green-Tech, Urges Minister

A key speaker at the MTA’s recent Industry Advisory Committee was SA’s Minister for Energy and Mining, Dan van Holst Pellekaan. He brings diverse experience to the portfolio, including being an owner/operator of outback roadhouses for seven years and an oil industry executive for a decade. He took the time to speak with Motor Trade about the government’s position on the future of automotive.

Q.The Electric Vehicle Action Plan stated that the government wants all new passenger vehicles sold in South Australia to be fully electric by 2035, which is pretty ambitious. As the automotive industry plans for the future, is it reasonable for them to expect this ambition to be realised?

A. I think it is. There's no doubt it's ambitious and it's not going to happen just because the state government has that ambition.

One of the key drivers will be actual manufacturers’ decisions. There are significant international manufacturers that have said that they won't be producing anything other than electric vehicles from 2030, some from 2035, and some from 2040.

I think the ambition will be realised not just because it's our ambition but because it will be what consumers expect.

It will be what manufacturers will be offering as well.

Q. What is it that you would really like to get across to the motor trade about that the Electric Vehicle Action Plan?

A. We are trying to provide some leadership in this and we are trying to get the most for all South Australians out of this opportunity. But we're not trying to tell anybody what they have to have.

To your key question, what would I like to have most?

I would like the motor trade and the broader associated industries to have their eyes wide open and prepare for the change that's coming.

I don't want anybody to be caught out in two or 10 years’ time when this change has occurred, because it's starting already and it's only going to pick up pace.

So, I want everybody who works in this industry to really take notice of what is coming and prepare themselves for it so that they can get the very most out of it for themselves and their organisations.

Q. According to the International Energy Agency, incentives for EVs globally amounted to $19 billion, which is $6400 per EV sold. Do you feel the state government has the right mix of incentives against the proposed road user charge? And should plug-in hybrids also be made eligible?

A. Yes, I certainly do but I also acknowledge that this will be any evolving space.

It's hardly surprising that manufacturers want as much incentive as possible to be available for people to buy the new models that they're producing. That's perfectly logical.

But similarly, it's perfectly logical that a state government needs to adjust a system - which is essentially the one we've had set for decades and decades of tax on diesel and petrol - being used to fund road maintenance.

That funding will have to come from somewhere else.

Our plan, on a per capita basis, provides more subsidy than the New South Wales and the Victorian plan.

Q. Should hybrids be included?

A. Well, hybrids are already selling very well. And in fact, we’ve seen hybrids as the mainstay of the taxi industry for well over a decade now.

So I don't think that subsidies are needed for hybrids.

Subsidies are needed for full electric, zero emission vehicles. So that's where our focus is in that regard.

And of course, we're seeing the emergence of fuel cell hydrogen, electric vehicles, and seeing them in government and commercial fleets.

Q. So what role do you see hydrogen technology playing going forward? And how does this interface with the EV and hydrogen action plans?

A. While we have an EV Action Plan, we are also working incredibly hard at hydrogen in many other ways.

South Australia has a fantastic opportunity to be a world leading green hydrogen exporter. And we want the opportunities that hydrogen present to flow through our entire economy.

We're already putting hydrogen into the natural gas circulation network to 700 homes in Mitchell Park in the southern suburbs of Adelaide. So hydrogen is already becoming part of everyday life for those people and that will continue.

With regard to transport specifically, the common expectation at the moment is that hydrogen will be a fuel source, whether it's hydrogen direct or fuel cells, that will be most suitable to heavy transport, buses, trains, trucks.

Electric vehicles will be most suited light transport passenger vehicles. That's the common thinking, I think and I don't have any reason to differ from that.

But it's not just about the fact that you’ve got to carry the fuel. It's about the recharging opportunities as well, whether it’s home-based recharging or out and about recharging, all of those sorts of things.

Q. The industry report, Directions In Australia's Automotive Industry 2021, found that in Norway -which has that very high 50% of fleet of electric vehicles - industry experienced average tooling costs of $77,000. That’s in addition to 10 days of training and AV infrastructure costs of $165,000. So, from the MTA’s point of view, is the government considering further transitory support to industry beyond the charging network?

A. Certainly, there's no doubt we’re considering that. But I think it's important to keep in mind that this transition, particularly of a service and a maintenance area, that is going to be led by manufacturers in the same way that it has for decades.

We've seen, particularly in the last 20 years, the service delivered by the branded dealer workshops, are being very tightly controlled.

If you buy a modern vehicle, it's really necessity now to have the manufacturer produce computer equipment, the software and the hardware to be able to maintain that vehicle.

So it is the manufacturers that are leading that transition and I'm sure that will continue to be the case with regard to electric vehicles.

We've seen Tesla, for example, established its workshop down in Tonsley in the southern suburbs. Now that's a small workshop for a small number of vehicles at the moment.

But it is very much a manufacturerestablished workshop to service and maintain its own vehicles.

And I think that, as we get more and more new types of vehicles in the market, we'll see manufacturers leading the service and the maintenance of them even more than we've seen in the past.

Q. So what about the independents? Do they do they get frozen out? Do they get assistance?

A. They don't get frozen out. There's always been an important role for independents vehicle servicing and maintenance, and I'm sure that will continue.

But I really want the independents to start focusing on this and start concentrating on this now.

I would hate for a high quality, independent motor vehicle workshop to be caught off guard by the transition from combustion and compression engines to electric vehicles.

I'd hate them to be caught off guard by that. There will always be a place for independent vehicle workshops and in fact both my family cars are serviced by independents, but they do need to start preparing now for the transition that’s coming.

So one of the key messages for me is, we all need to be ready for this, whoever we are, wherever we are, whatever our role in the industry is.

We have to start preparing now for what's coming.

Q. Battery technology has come a long way but it's also posing a series of questions for the environment when they reach the end of their life. What do you believe needs to happen between now and 2035 to manage this growing issue?

A. It is a significant issue that does need to be addressed.

A lot of work has been done on that already and I'm very optimistic that the technology to repurpose batteries will evolve and grow very significantly.

We will see also some very exciting recycling opportunities. A tremendous example of that is Nyrstar is preparing itself to be able to receive and recycle batteries, in the next 10 years or so, in a really smart, environmentally responsible way.

So there are new opportunities that are being developed as we speak and I'm very optimistic that they will be in place in time for when they’re needed.