The electric vehicle tax, slated by the state governments of Victoria and South Australia for 2021, will dramatically limit the use of electric vehicles in Australia, according to a new report from the University of Queensland.
The transport sector is currently responsible for about 18 percent of Australia’s greenhouse gas emissions, and 10 percent of light vehicles.
Both Victoria and South Australia have stated goals to achieve net-zero greenhouse gas emissions by 2050, but taxing electric vehicles puts those targets in jeopardy, according to report author and Queensland University E-Mobility Associate Jake Whitehead.
The initial report, which has not been peer reviewed and is based on surveys and modeling, estimated that the proposed 2.5 cents per kilometer tax would mean electric vehicles (EVs) would produce between 30 and 40 percent new vehicles. sales in the state by 2050.
“In the worst case scenario …[electric vehicles will make up] no more than 30 percent of new car sales were mid-century, which is ridiculous, “said Dr. Whitehead.
A study conducted for the Australian Government last year showed that on a business-as-usual approach with no additional taxes or incentives, electric cars will account for about half of all new cars sold in Australia by 2035.
That increases to around 65 percent by 2050.
Only by offering significant incentives can Australia hope to achieve a 100 percent electric vehicle market in line with its net zero-emission target by 2050, according to Dr. Whitehead.
“Our preliminary modeling suggests that a proposed 2.5 cents per kilometer EV highway tax could result in 2050 sales rates that are at least 25 percent lower than business as usual,” he said.
“Only the best case scenario makes us [to 100 per cent EVs] – that’s not the main scenario, it’s the best case scenario.
“What I’m really worried about is the state government continues to use that [net-zero] rhetoric but then don’t back it up with action. “
Given the likelihood that the overall number of vehicles will increase as population grows, more than half of those vehicles powered by gasoline and diesel will continue to contribute to our greenhouse gas emissions by 2050.
As part of the report, Dr Whitehead’s team surveyed 500 households about what incentives were most likely to encourage them to buy an electric vehicle.
Exemption of electric vehicle drivers from road taxes had the most significant impact on those surveyed, followed by offering monetary credit for electricity costs.
This is in line with 2018 ARENA report who noted that “finance costs, and particularly reductions in upfront purchase costs” had the strongest impact on EV use.
Other incentives such as stronger public charging networks and access to free recharge are seen as a supporting role, rather than a major role in vehicle sales.
A South Australian government spokesman did not respond to questions asked to them about whether they had exemplified the potential impact of the tax on the use of electric vehicles.
However, the spokesman said it was “important that all road users contribute equitably” to road costs.
“The Marshall government is investing a record $ 18.3 million dollars in its electric vehicle action plan – including $ 13.4 million to deploy a statewide fast charging network,” the spokesman said.
“This will help promote the use of electric vehicles and help meet the Marshall Government’s target of reducing carbon emissions by 50 percent by 2030 by 2005 levels.”
A spokesman for the Victorian government also said the tax was “fair” and that the state was still on track to achieve net zero emissions by the middle of this century.
“The government has set a target for a net zero-emission law by 2050 and we will announce various policies to achieve that target,” the spokesman said.
Electric vehicles in Australia: the state of the game today
Electric cars globally accounted for 2.6 percent of all new car sales in 2019 or about 2.1 million cars.
That’s much higher in places like China where EVs make up about 5 percent of the market, the EU about 3.5 percent, and Norway, where more than half of all new cars are electric.
Norway currently aims to phase out new petrol and diesel cars by 2025.
But Australia is far behind. In 2019, electric cars accounted for only 0.6 percent of new car sales totaling more than 6,700 new electric vehicles.
While that doesn’t sound like much, there were only 2,216 sold the previous year in 2018. And if we go back to 2011, only 49 Australians bought EVs.
Seen in that context, the Australian electric vehicle market appears to be in the early stages of a strong upgrade.
Despite a drop in car sales in Australia and around the world due to COVID-19 this year, electric car sales here and internationally have bucked the trend.
And while there is talk that hydrogen technology could rival electric vehicles, it will not, according to Peter Newman, an expert on energy, transportation and sustainability at Curtin University.
“The 2020s are a great time [electric vehicles] will dominate the market, “said Professor Newman.
“[Hydrogen] it’s great for industry in rural areas and regions and a great choice for green industries, things like green steel exports …[but] EVs and lithium ion batteries win – they’re definitely the better choices, we just need to launch them. “
There are currently 24 electric vehicle models available in Australia and more than 2,300 public charging stations.
Where are we going?
There are many factors other than driving taxes that will influence the adoption of electric vehicles in Australia.
Future increases in oil prices could make electric vehicles a more cost-effective alternative to drive, and the up-front cost of EVs will also influence consumer choices.
The cheapest electric vehicle on the Australian market is currently over $ 44,000, which is still beyond the reach of many.
However, prices are expected to continue to fall over the next few years.
Research by the Electric Vehicle Council found that 56 percent of people surveyed said they would now consider buying an electric vehicle as their next car.
While range anxiety and a lack of access to charging stations have still been identified as barriers for people buying electric vehicles, they are becoming less of a problem as EVs become more common, according to Dr Whitehead.
“People are becoming more familiar with the technology. They are starting to see the charging infrastructure around the place,” he said.
“We have noticed that in the consumer work we do, there is a change in understanding of technology.”
Australia’s slow adoption can make it hard to catch up
Britain recently joined a growing list of countries planning to phase out new petrol and diesel vehicles by 2030, and more countries should do the same, Professor Newman said.
“The elimination of diesel and petrol vehicles by 2030 must become a world standard,” he said.
But right now, our grid will not be able to sustain 100 percent of the electric vehicle market.
To get around this, we need to install large-scale community batteries to manage peak loads and integrate the charging infrastructure into public transport stations.
“It’s just a matter of launching it. It’s a matter of removing barriers,” said Professor Newman.
“The technology is there.”