How Fuel Efficiency Standards Can Solve Australia’s Affordable EV Problem

Australia recently committed to reducing its greenhouse gas emissions by 43% below 2005 levels by 2030.

The transport industry accounts for a significant portion of Australia’s emissions, so it’s important to address it to meet the new government’s new targets.

Transportation accounts for approximately 18% of our emissions, accounting for approximately two-thirds (approximately 12%).

As regular readers of the site know, I’m a huge EV advocate, have owned an EV since 2019, and are about to become an EV-only family within a month.

The move to electric vehicles in Australia has been slow, accounting for just over 2% of new vehicle sales. Comparing this to other countries in the world, it falls short of Norway, Sweden, Germany, the United Kingdom, Europe, China, and the United States.

Several factors combine to explain why our adoption rate is so low and why our emissions remain high and are actually increasing in the transport sector.

The first is price. The average electric car is still more expensive than its combustion counterpart, but thankfully the gap has narrowed and there are now EV options starting at around A$45,000. EV prices are being driven down by new battery technologies such as LFP, which help reduce the cost of the largest cost component, the battery. As with computer chips, these costs are expected to continue to trend downward.

Another major reason is the lack of community knowledge about the increasing range and available charging options of modern EVs.

The biggest reason that remains overwhelming is the lack of EV models available. If you’re a tradesman and currently drive a Ford Ranger with your toolbox in the back and a ladder on the roof, you literally have no option in Australia to replace it with an EV.

Solve a problem

One of the reasons Australia is struggling to bring more EV models to Australia is the size of the market. Automakers that produce EVs are shipping EVs to other countries because demand lags behind other countries.

Demand for these vehicles needs to accelerate dramatically if Australia is to be able to attract the attention of carmakers around the world. We’ve tried state-based incentives like reduced stamp duty and even her $3,000 rebate to her EV buyers, which certainly helped, but is not the solution. .

What Australia lacks in other countries that have successfully procured more EVs and increased sales of zero-emission new cars is fuel economy standards.

Countries like Europe and the US introduced fuel emission standards years ago, but Australia did not, which is why we don’t allow automakers to ship cars to our country.

As petrol and diesel prices rose, natural market forces led to the choice of more efficient vehicles. Vehicles of this kind, now no longer on sale, offered figures in the range of 12L/100km.

Thankfully, people have started choosing more fuel efficient vehicles to reduce ongoing costs. Many families now drive smaller turbocharged SUVs whose efficiency is close to his 7L/100km.

The next evolution is the hybrid drivetrain, which has reduced fuel usage to just 4L/100km on some models like the Toyota Corolla. The problem is that not everyone drives a Corolla, so Australian emissions are still high and rising.

The real long-term and sustainable answer to reducing emissions is zero emissions, and only with EVs.

Manufacturers who have created attractive EVs have been waiting longer, demonstrating that EV adoption in Australia is changing. When Hyundai, Kia and BYD open a new batch of orders, they usually sell out in just minutes.

The size of these batches is a big part of the problem, measured on hundreds of vehicles. For reference, on 22nd July he had 84,461 new passenger cars sold in Australia.

Tesla so far appears to be the only manufacturer capable of producing a large number of vehicles which means they can distribute and sell a significant number of vehicles in Australia. After leading the sales charts with the Model 3, it added the Model Y and plans to sell tens of thousands of EVs in Australia this year.

When it comes to legacy cars, there’s a serious problem: manufacturers like BMW don’t offer ID.3 or ID.4 cars here, like Ford, which builds the Mach-E and F150 Lightning. No such manufacturer offers here.Go down the list and you’ll find story after story of good EV models not making their way to Australia.

The main reason for this is that traditional automakers are investing heavily in existing vehicle production lines and want to continue selling ICE vehicles to fund their transition to EVs. That’s it.

If other countries have fuel economy standards and Australia doesn’t, where do you think legacy cars will try to sell those cars? Yes, Australia and countries like Australia will not resist.

If Australia were to set serious and aggressive fuel economy standards for new car sales, legacy vehicles would be forced to invest in serious research and development to meet those standards. Investing in EV manufacturing and shipping is a choice between investing in developing and producing slightly better ICE engines, where consumer demand is likely to drop dramatically in the next few years. much more attractive. actually needed.

At the EV Summit in Canberra this week, Climate Change and Energy Minister Chris Bowen announced that a discussion paper on a national electric vehicle strategy will be consulted in September. This discussion paper contains questions about fuel efficiency standards.

While I’m bullish about EVs, there’s no need to establish a sensible transition plan that will ensure that the availability of EV models will increase dramatically and prices will become more affordable.

As automakers ramp up production to millions of vehicles per year, the cost per individual unit for batteries and the entire vehicle could drop significantly. This is why emission standards are key to lower EV prices. With more automakers selling EVs in Australia, the usual competitive market pressures are fueling price competition, which also contributes to consumer affordability.

We also need a nationwide educational campaign to make sure people are dealing with the facts about EVs, not issues that are outdated or manufactured by those with a motive to slow the transition.

You can watch a clip of the EV Summit featuring Atlassian co-founder Mike Cannon Brooks and Australian Chairman of Tesla’s Board of Directors Robin Denholm in the video below.