It’s incredible how quickly weighty policy documents can become paperweights in Canberra. This may be the fate of the National Electric Vehicle Strategy, released just over a year ago but has been quietly deprioritised by the Federal Government.
The 56-page policy primer outlined Australia’s vision to transition towards an electric vehicle-led society. It aimed to increase the supply of EVs, bolster the number of charging stations, and also encourage broader adoption. A month after its release in April 2023, the Government released its 2023-24 Federal Budget. It was surprisingly light on EV-related policies, taking a whole-of-economy approach to decarbonisation. The expectation was that this was being reserved for later budgets, given the strategy was only recently announced.
But a year on, and while circumstances have changed, the Federal Government’s stance has not, with only a handful of its latest budget measures addressing the switch to EVs. Only an additional $60 million has been allocated towards installing more chargers on Australian roads. For contrast, earlier this year, the state of California in the US committed $US1.9 billion towards the same goal.
In fairness, California is home to nearly 15 million more people than Australia, but the sheer difference in spending is telling. The Federal Government also committed to a program that provides $10,000 grants for apprentice mechanics looking to retrain to work on EVs. However, a recent study by Deloitte and the Motor Trades Association of Australia found that last year, the majority of EV mechanic roles were left unfilled, begging the question as to whether this program should have been rolled out last year.
Meanwhile, there is genuine trepidation within Australian society about buying an EV. Sales are starting to flag, as more Australians consider hybrids over straight EVs. A survey we ran earlier this year found that the majority of Australians believe there isn’t ample EV infrastructure in their area. Additionally, little has been done to encourage the second-hand market for EVs — a key component underpinning the National EV Strategy. Australians are treating this segment with fear due to a lack of understanding around how battery fade works and clarity on the cost of repair.
The vague hope is that as EV costs come down, adoption will rise. But as we’ve seen in the past few months, costs have declined, but adoption has stalled. The cheapest EV now, the GWM Ora Standard Range, will set Australians back $35,990 driveaway, down around $5000 from the cheapest EV in 2023.
All of this has created doubts behind closed doors in the Australian auto industry. Executives are wondering whether EVs are a flash in the pan or a genuine auto trend. Questions are being asked by the industry as to what extent they should commit further resources to the EV revolution. This begs for further intervention from both the State and Federal Governments if we want to meet the targets set out last year.
On average, Australians change over their cars roughly every six years, so right now is the sweet spot for encouraging a broader move to EVs. Environmentally, a switch from internal combustion engine (ICE) cars to hybrids is still a net positive in terms of reducing emissions. But if Australia’s carbon reduction targets are hinged on a direct swap to EVs, then a push towards hybrid vehicles will affect them. Personal and business transport accounts for roughly 20% of Australia’s emissions.
The launch of Australia’s National Electric Vehicle Strategy came bundled with much fanfare as a direction and goal for EV adoption. It created genuine buzz within the auto industry that it could play a role in the largest transport shift in our generation. The excitement was short-lived.
There are enough policy papers that have been consigned to becoming doorstops; without further effort, the National Electric Vehicle Strategy will suffer the same fate.
Des Hang is the CEO of Carbar, Australia’s first car subscription company.