EV market needs spark

The future of motoring is undoubtedly electric, but the take-up in Australia remains low.

The coronavirus crisis could not have come at a worse time for the electric vehicle market, which is struggling to gain a foothold in Australia.

In some markets, such as China and Norway, government subsidies have helped drive strong consumer demand for electric vehicles (EVs). 

But in Australia, less than 3000 EVs found a home in Australia during 2019, a tiny figure when compared with the overall market of 1.06 million new vehicle sales. 

So far this year EV sales have recorded a solid 19 percent year-on-year increase versus a 20 percent overall market decline, but year-to-date EV sales of 1526 units still represents about a third of one percent of total sales. 

Marty Andrews, the CEO of Chargefox, one of Australia’s leading providers of electric vehicle charging infrastructure, agrees that EV sales in Australia are “pretty insignificant” but points to the global movement towards EVs that will eventually impact here. 

“Lots of major manufacturers now are committing to electrifying their vehicles,” Mr Andrews said.

“So, it’s coming to Australia whether we like it or not. It’s a matter of when, not if.”

Volkswagen, the world’s second largest car maker says it will cease all production of petrol vehicles by 2026, while German prestige car maker Mercedes-Benz is planning to exclusively offer either battery-electric, hydrogen-powered, and/or plug-in hybrid vehicles by 2039. 

These decisions are being driven in part by tightening European emissions requirements which are forcing car makers to have a growing percentage of EVs or other low and no-emission vehicles in their model mix. 

One of the primary goals of EVs is, of course, to reduce vehicle-based emissions and with transport representing about 19 percent of Australia’s overall emissions, a major shift to EVs powered by renewables is one of the big chunks that can be tackled here, says Mr Andrews. 

He points to recent research from the International Energy Agency which shows an unexpected positive consequence of the COVID-19 pandemic being a forecast eight percent drop in global CO2 emissions due to reductions in traffic. 

“Australia’s per capita transport emissions are 45 percent higher than the OECD average, with transport being our third largest source of greenhouse gas emissions,” Mr Andrews said. 

“Cars are responsible for roughly half of those emissions. With lockdown measures meaning significantly fewer petrol cars on the roads, the impact on carbon emissions has been astounding. 

“Right now, we’re getting a glimpse into what the environmental benefits of a low-carbon future could look like.

“I’m not suggesting we stay in lockdown forever or economies suffer to make it happen, but instead consider how we can and should replace common carbon emitters.

“Electric cars powered by renewable energy are a big piece of that puzzle, and accelerating EV adoption in Australia could help get us there sooner.”  

But while some EV early adopters are motivated by the desire to do their bit for the environment, not everyone is so altruistic and Mr Andrews said the business case for EV ownership versus an internal combustion engine needed to be better.  

“Most of the industry research we see suggests there are three factors that affect EV uptake: price, range and infrastructure,” Mr Andrews said. 

“We (Chargefox) set out trying to help solve the infrastructure piece (but) there’s a real chicken-and-egg problem in that it’s difficult commercially putting infrastructure in when there are no users of that infrastructure. 

“Price and range really fall down to the manufacturers, but I think in Australia the biggest barrier by far is price.”

Mr Andrews believes the issue of EV price will be addressed in the near future as economies of scale and other efficiencies combine to bring down the cost of lithium-ion batteries, which are one of the major component costs in EV manufacture.

He said concerns about EV range were also well on the way to being solved due to the billions being ploughed into battery research and development by car makers, in a bid to gain crucial competitive advantage. 

The current EV distance champion is the Tesla Model X, with an NEDC rated range of 580km from its 100kWh battery, but most EVs have less range than this. 

“We see lots of (EV) passenger vehicles now with 300 to 350km range – I think we’ll push up to near 500km range and it’ll start to become a non-issue,” Mr Andrews said. 
Despite these challenges, Mr Andrews sees a bright future for EVs in Australia. 

“Once you get to a threshold, which I think we will do by the mid-2030s, where most cars sold are electric, then turnover starts to happen pretty quickly,” he said.

“Half of the new cars sold each year are fleet and fleets turn their vehicles over every three to five years. When you get to the point where most of the new cars sold are EVs, and they get turned over every three to five years, then the second-hand market starts to fill out.

“The average lifespan of a car in Australia is about seven years, so when most (new) cars sold are electric, a decade later most cars on the road will 
be electric.”