Federal Election 2016: The Greens have a plan for electric vehicles…
If electric vehicles are to be a success then the Government needs to help. The Greens have a plan…
THE WORLD AS A whole hasn’t really embraced the electric vehicle (EV), and Australians in particular aren’t too keen. We don’t even get the range of hybrids other countries are offered, especially not plug-in hybrids. As far as pure electric vehicles are concerned the take-up rate is even slower. The Mitsubishi I-MiEV was first on sale in 2010, and was withdrawn in 2013 after less than 300 sales. Holden recently canned the Volt which was electric-powered with a petrol generator, and Nissan still sell the all-electric Leaf… but in similar, tiny-volume numbers.
The problem is that electric vehicles are very expensive compared to petrol or diesel equivalents, and therefore simply don’t make economic sense. They are also range limited and not very exciting, but it seems to be the financial argument that is keeping sales small. For example, the Leaf is $51,000 plus onroad costs, which is around $30k more than the equivalent small petrol car. There is simply no way that extra money is going to be paid off in the average car’s lifetime, and it’s the same deal for hybrids too as we show here and we have a diesel vs hybrid test here.
So we have a situation where something needs to change, but there’s no incentive to do anything on the part of either industry or the consumer. That is one reason why we have a system of government, and if anything is to happen in the EV/hybrid space the government needs to step in and kick-start the change. And the Greens actually have a plan to move things along. This is what they propose:
Fund free registration for the first five years after purchase of a fully electric vehicle
Yes, rego is a state government affair. The Greens would have the Federal government rebate the States. They claim (hope) that the vehicles would become more price-competitive, and they would, but a saving of say $800 x 5 = $3200 still leaves a huge price premium for electric vehicles which have a long way to go to match cheap petrols. Still, it’s a first step and not the only idea they have.
Investing in EV charging infrastructure
The Greens would provide “$151 million in grants to support local governments, state governments and car park operators to install electric vehicle charging infrastructure”. This would fund around 3500 stations including fast-charge stations.
That would certainly help with range anxiety, as owners could drive their cars to a destination and leave them charging, even if range anxiety is more imagined than real given the state of electric cars now and the average commute or errand distance.
But $151m won’t solve the problem entirely, so the Greens hope that as EVs become more popular the private enterprise takes over. That is an interesting idea, because EV owners are unlikely to want to pay to recharge as they can do so for what appears to be free at home. So would local businesses invest in free charging systems to attract customers? The return on investment seems unlikely. Perhaps it’s more probable that councils implement systems as ratepayer demand rises, but councils are cash-strapped at the best of times and EVs are going to be very much a minority for a long time to come. Still, as with the rego rebate, action has to start somewhere.
Subsidise use of government EVs
The Greens would provide “$50 million in grants to support government and non-government organisations to meet the gap between the cost of an electric vehicle and a conventional vehicle.”
As with the other two ideas, this by itself won’t do much good but every little step counts and increases the momentum. It will also introduce EVs to many more people who may decide to buy privately.
Increase the luxury car tax to 50% for conventional fossil fuel vehicles over $100,000 to drive consumer choices towards electric vehicles
The Greens would change the LCT from 33% to 50% for cars over $100,000 which they say would raise $280 million “over the forward estimates”. The idea is that this would “encourage the purchase of electric vehicles by making the comparative cost of luxury fossil fuel vehicles higher”. The current LCT thresholds are $63,184 for normal vehicles and $75,375 for fuel-efficient vehicles (combined fuel consumption of 7L/100km or less).
The idea of taxing for environmental impact is basically sound, but the Greens have made a rather large leap of faith. There is no evidence that people who are prepared to spend more than $100k on a car would suddenly switch to an EV if they had to pay more tax. There are very few electric vehicles on the market now, relatively few available worldwide, and most are small city vehicles with fairly basic interiors (Telsa excepted), not comparable with $100k plus luxury sedans, sportscars and 4WDs. A more sensible approach would have been to tax all new cars by fuel consumption, and that would also promote hybrids and other fuel-efficient vehicles. Hybrids are likely to develop to the point where they are primarily electric and secondarily petrol/diesel, as distinct from the other way around, and this might be a better incremental change approach to adopt.
It would also be sensible to consider the entire environmental impact of a vehicle, not just the fuel consumption. There is manufacturing and disposal costs, and most importantly, how much use is made of the vehicle. For example, Driver A may own a high-consumption big 4WD vehicle used at weekends to tow a horse float and uses public transport to commute. Person B owns a hybrid but uses it every day for commuting, so Person A uses less fuel than Person B. This point tends to be entirely lost on fuel efficiency crusaders, but that doesn’t mean it’s not valid. The real way to do this sort of usage-based tax is fuel itself, but that takes political courage.
Including firms involved in electric vehicle manufacturing in the government’s Automotive Transformation Scheme to grow the jobs and skills in the new electric vehicle industry
Well, that has to be a good idea. There is no question that electric propulsion in its various forms is the way of the automotive future, so investing in skills here in Australia can only pay off down the track.
Analysis:
Overall, the Greens reckon this plan “will help to get 31,000 more electric vehicles on the road by 2021”. That’s five years away, and 31,000 EVs is a very small number – at around 1 million new cars sold a year, that’s only 0.6% of the market over five years, or 6200 cars a year. It’s a lot of investment for not a huge return, but again, the only way forwards is for government to do what it can and sow the seeds.
The Greens also say that “for cleaner air, lower fuel costs and more efficient cars, the Greens believe Australia must align with the EU 2020 standards, including the target of 95g CO2/km for passenger vehicles, by 2023.” Nice idea, but given we’re over 170g CO2/km at the moment then we’ve got a bit of a way to go. We have to start somewhere though, and this plan is a start but by itself will not get even close.
There’s also this on jobs – “some 50,000 Australians work in the motor vehicle and motor vehicle part manufacturing and if their jobs are to be sustained in the long-term Australia needs to start building cars people actually want to buy” – which, ironically, is not EVs. It’s SUVs. Sorry, Greens! Take a look at the sales figures.
The Greens also don’t seem to have noticed that we no longer make cars here, as they say “improving the fuel efficiency of cars manufactured in Australia would make the industry more competitive. Sales of domestically manufactured cars have decreased steadily over the last decade as Australians have started to move away from large passenger vehicles” which also ignores the fact that the move has been away from the likes of Falcon, Commodore and Mitsubishi 380 towards SUVs, which are no smaller.
Overall, we reckon it is good to see a party think about the future of motoring and transportation with a mostly sensible set of ideas designed to encourage use of more fuel-efficient vehicles.
Here’s the Greens’ full press release: http://greens.org.au/sites/greens.org.au/files/Electric%20vehicles.pdf
Its looking likely electric vehicles will hit the 1million vehicles per annum this year. That’s over the magic 1% mark which then turns disruptive quickly. Recently released German incentives will likely has a big impact on exploding product mix.
With battery packs now in the $150/kW as stated by GM for the bolt. price parity with cost of manufacture of ice vehicles is achieved.
Phevs are probably the best vehicle for many Australians with near equal or potentially better range and the potential to reduce the fuel bill by 70% +
Does this mean the Bolt is likely to go for Mazda3 or Corolla money, or is that still not feasible??
$25K for an EV in that class with around 300km range would make them a lot more appealing IMO…..especially for two car families where one vehicle very rarely leaves town…
Agreed on PHEVs too….they make a good temporary solution, particularly if most of your driving is around town with the occasional roadtrip….
Yes, The theory goes that once the $150per kilowatt hour is breached a battery vehicle has the potential to be cheaper to build and buy than an equivalent ice. Potential means the experience or learning curve must still be transcended and economies of scale need to kick in. In respect of the bolt its pricing and initial production volume schedule ( about 40k) are much to do with not spooking the internal horses and the real potential it canabilises GM sales above bringing others to the brand. The analysts will be all over who the purchasers are in the first year.
2018 is an important year with new emmision regs across the globe set to see a raft of new electrified vehicles.
Price Equivalence with a 25k Mazda 3 is probably achieved at the 27.5k mark given annual fuel cost and the potential for better resale.
They had me until increasing LCT. Forcing people into technology is a poor decision and will never make me choose an EV anytime soon. We are 10 years away at least for viable range for Australia’s huge distances and 15 years way fro sufficient infrastructure. I’d prefer a hybrid in the near term.
Mitsubishi phev is here now and has viable range.
I rather use a push bike than buy a Mitsubishi anything. This is a company that should just call it quits. They are unable to produce a good looking, modern car. THey even went on record to say they can’t even afford to replace Lancer, already 8 years old. As galling is this for me to say, I’d buy a Toyota ahead of a Mitsubishi.
Desperate times indeed.
As others have said, for Australia at this stage, Pure Electric cars aren’t practical yet. The infrastructure isn’t there, other than in limited parts of some cities. Certainly not enough for a bulk take-up of Pure electric. We’re at the stage that USA was a decade or more ago – where they encouraged and subsidised initially Hybrid vehicles (e.g. the 2016 Prius has 80 g/km CO2 compared with Corolla 143 or Hilux 186-277). They should be initially encouraging Hybrid, as well as Plug-In Hybrid first, then as infrastructure is built – maybe 5+ yrs down the track, whittle down to full Electric vehicles.
Don’t forget that Prius is the best selling proper car in Japan (excluding the tiny Kei cars).
In reality, if it was legislated tomorrow, Toyota (and Hyundai etc) would soon ramp up production to produce ample Hybrid vehicles ASAP. To get electric vehicle supplies – it’s just not going to happen in the short – medium term, as the vehicles aren’t available.
Agreed Alan, government action must be taken to get things going.