Is AUSTRALIA THE ‘NEXT BIG THING’ in the EV world?

Australia’s electric vehicle industry has grown significantly over the past years, but is it on course to becoming a major player in the EV world? Charlie Atkinson investigates.

When you think of the countries that are leading the EV revolution, most will point to Norway or China. Some may even highlight the likes of Germany and South Korea, and maybe even Sweden. Very few would consider Australia as one of the major players in the EV world, and yet the ‘Land Down Under’ could well be the up-andcoming nation for electric vehicles.

In this feature, I’ll look at how Australia’s electric vehicle market has grown over the years and what it can learn from other countries to help accelerate its switch to EVs.

AUSTRALIA’S RELATIONSHIP WITH EVS

The electric vehicle market in Australia is booming. In April, it was reported that EV sales in Australia have overtaken petrol-driven vehicles in the medium-sized car category for the first time on record.

The Australian Automobile Association’s EV index revealed that from January to March 2023 7,866 battery electric medium-sized cars were bought in Australia, or 58.3% of sales in the medium-sized category. Whilst ICE vehicle sales continued to reign supreme in other categories, it is a step in the right direction for Australia.

But how has Australia grown its electric vehicle industry?

According to research based on sales data released in the Electric Vehicle Council’s yearly recap, the number of electric vehicles on Australian roads has almost doubled over the past year, growing from 44,000 at the beginning of 2022 to more than 83,000.

The significant growth in sales is also a fair representation of Australia’s willingness to make the switch to EVs, according to Dr Scott Dwyer, Research Director for the Institute for Sustainable Futures at University of Technology Sydney.

Dwyer said: “While there is still a lack of choice of models, there is certainly pent-up demand for EVs in Australia with various surveys over the last few years showing that many intend to make an electric model their next car purchase.”

Electric vehicle sales are growing and the demand is there, so what is being done in order to accelerate a transition to EVs?

While there is still a lack of choice of models, there is certainly pent-up demand for EVs in Australia with various surveys over the last few years showing that many intend to make an electric model their next car purchase. ”

The Strategy

The number of electric vehicles on Australian roads is expected to hit 100,000 over the coming months, according to the Electric Vehicle Council’s yearly recap, and that aligns with the country’s National Electric Vehicle Strategy.

The National Electric Vehicle Strategy (NEVS) sets out three main objectives; increase the supply of affordable and accessible EVs; establish the resources, systems and infrastructure to enable rapid EV uptake; and encourage increased EV demand.

In order to achieve this, the strategy aims to expand EV availability and choice, whilst also making it easy to charge across the country.

However, a number of countries, including the UK, have taken stronger approaches towards electric vehicles by introducing bans on the sale of internal combustion engine vehicles. It is a similar story for the other leading EV countries. Norway aims to ban all ICE vehicles by 2025. The Dutch government seeks to reduce the Netherlands’ greenhouse gas emissions by 49% by 2030 and have all passenger vehicles comply with zero emissions by 2030.

The National Electric Vehicle Strategy has purposely avoided such bans, but there are policies in place, as analysis from Cox Automotive Australia explains.

“There is mixed consensus here, but the peak lobby group for car importers (the FCAI) certainly does not believe in bans,” it stated. “The National Electric Vehicle Strategy goes a long way to catching Australia up to other regions, such as Europe and the US, in terms of giving consumers clarity that EVs are here to stay and looking at thorny issues such as fitting wall box chargers in shared apartment complexes.

The main criticism of the “NEVS” is that it doesn’t go far enough and lacks real teeth... ”

“The main policy in the strategy is the confirmation of a Fuel Efficiency Standard which fines OEMs whose fleet-average CO2 exceeds an agreed cap. The details are yet to be finalised but expect it to take some degree of influence from policies in place elsewhere.

“The principal argument favouring the standard is that it will encourage car brands to bring more lower-emissions cars to market rather than dumping high-emitting cars here. However, with global production still constrained and Australia a small RHD market with some distinctive tastes, it is yet to be seen if it will be a panacea to unlock stock.”

The National Electric Vehicle Strategy has faced some criticism since it was unveiled earlier this year, with many people, including Dr Scott Dwyer, questioning whether the policies laid out in the strategy are strong enough.

“The main criticism of the “NEVS” is that it doesn’t go far enough and lacks real teeth,” Dwyer said. “What I like about it is that it identifies some really critical aspects to get right – better infrastructure planning, improved workforce training and skills, implementing product stewardship for end-of-life batteries, ensuring access to charging for apartment owners, more funding for real world demonstrations and research.

“As to whether the measures it outlines do enough to help people make the switch will depend on how these important issues are translated into real action and implementation.”

Obstacles And Challenges

The situation of electric vehicles in Australia is complex. There are obvious geographic barriers, such as the sheer size and vastness of the country, as well as other cultural dynamics.

Charging infrastructure is one of the biggest issues. Being one of the largest countries in the world means it is much harder to tackle the issue of charging infrastructure in Australia than it is in places like the UK, which is 32 times smaller than Oz.

“Finally, there is substantial State-level investment as well, with the likes of Queensland, Victoria and New South Wales co-funding charge sites and tools to identify under-serviced spots not reached by the private market.”

Australia is also in an awkward position culturally. Pick-ups (or ‘utes’ as they are better known) are by far the most popular vehicle class in Australia, and a lack of EV options will surely cause many

Will Australia’s love of utes put the brakes on the continued growth of the EV market?

Learning From Others

Cox Automotive Australia stated: “Australia has significant challenges regarding public infrastructure, particularly in more remote regions outside the major metropolitan areas. A handful of DC charger providers, such as Chargefox and Evie, are growing, but they have their share of reliability challenges, and many sites are 50kW or less. According to Federal Government figures, there are about 2400 public chargers available right now.

“In terms of the future, federal government money is available through a $500 million (about 270 million pounds) Driving the Nation Fund. Its core plan is a national charging network of 117 sites on major highways at intervals of 150km.

“There are also government funds through a body called ARENA available to co-develop more charging sites, and we are now seeing petroleum companies such as BP (BP Pulse) and Ampol (AmpCharge) setting up chargers at service stations, albeit not to the degree that exists in Europe.

Australians to resist making the switch. As well as utes, there is also an historic love of V8’s and muscle cars, which brings some opposition to the new age of electrification.

This could be the biggest threat to Australia’s EV movement, according to Dr Scott Dwyer: “I could see enthusiasts clinging to these vehicles for some time yet but similarly I can see many making the switch to electric performance and utility versions.

“However, today these models are either incredibly expensive or don’t have availability in Australia. In addition to charging infrastructure availability, I see limited model availability as what will put the brakes on continued growth of the EV market.”

Despite these challenges, there are positive signs for Australia. Government is making a concerted effort to make charging easy and accessible for anyone wanting to switch to electric vehicles, and it is supporting that commitment with significant levels of investment. There are also a number of different vehicles available to Australians. The Tesla Model 3 is regularly Australia’s top-selling passenger car of any type, and the Model Y is Australia’s top-selling luxury mid-sized SUV. Other contextually popular models this year are the BYD Atto 3, MG ZS EV, Volvo XC40 Recharge, Polestar 2, and Hyundai IONIQ 5.

All the pieces of the puzzle are there, but what can Australia learn from other countries in order to make the next step?

According to Jim Hunwick, partner at Pinsent Masons, a multinational law firm which specialises in the energy, infrastructure and technology sectors, Australia can learn from Europe and from North America.

“Europe is at the forefront of progressing EV policies, with countries such as the Netherlands, UK, Germany and Norway leading in EV uptake,” Hunwick said. “In many European countries it is now less expensive to own an EV than a petrol or diesel internal combustion engine (ICE) vehicle.

“By leveraging best practices from other jurisdictions, Australia can create a supportive environment for the growth of its own EV industry and drive the transition to cleaner, more sustainable transportation in its journey to its net zero emissions target.”

Hunwick sites how the Netherlands, which he claims is the European leader in electric driving, has introduced incentive policies that are “so successful that electric car ownership now costs the same as ICE vehicles.” He adds that Germany currently has more than 19 charging points per 100km, but the government has committed €6.3bn of additional funds to rapidly scale up the number of charging stations across the country, as part of its push towards net zero emissions. The UK has also committed over £2 billion to support the move to zero emission vehicles, with drivers benefiting from an additional £56 million in public and industry funding for increasing EV charge points across the country.

Whilst European countries are certainly leading the way when it comes to electrification, Hunwick believes Australia has more in common with the United States.

“The US, although a few years ahead, appears to be in a similar phase of their EV journey to Australia,” Hunwick said. “The US are taking significant steps to support the transition to EVs, with a strong focus on charging infrastructure and critical mineral supply chains. Independent states across the US have set different targets for achieving net zero emissions and banning ICE vehicles. California has set a target to ban ICE vehicles by 2035 and achieve net-zero emissions by 2045. New York also plans to ban ICE vehicles by 2035 and achieve netzero emissions by 2050.

“The Biden administration, as part of the Bipartisan Infrastructure Law, has allocated over US$7.5bn for EV charging, US$10bn for clean transportation and over US$7bn for critical mineral supply chains for EV battery components, materials, and recycling.”

Hunwick continued by saying the investment “has encouraged major auto industry players to commit billions towards mining, battery production, EV charging infrastructure, and car assembly,” which will help “accelerate the adoption of EVs by prompting greater demand, reducing costs for consumers, and supporting more production capacity.”

WHAT NEXT?

Is the future electric for Australia? There is a willingness to make the switch to lower-emission vehicles from Australian’s, and despite the historical love of pick-ups and V8’s, there is no denying that country is in a state of transition. Although it faces challenges both culturally and geographically, the country has made significant process in its move towards electrification.

However, there is still a lot of work to be done. Public charging infrastructure remains a big challenge for Australia, and there is a strong sense of scepticism across the commercial vehicle sector too, according to Cox Automotive Australia. Despite this, sales of electric vehicles have continued to grow across Australia, and demand for EVs remains greater than supply, so this trend will surely continue.

It might not be rivalling the likes of China and Norway just yet, but Australia could certainly be the next big thing in the EV world.