Out-Law / Your Daily Need-To-Know
As Australia works towards its 2050 net zero emissions target, the uptake of electric vehicles (EVs) is expected to increase significantly.
This change presents an opportunity for those looking to invest in Australia. Currently, only a small percentage (3.39%) of new vehicle sales in Australia are EVs, highlighting the potential for growth of this market. Investment in accessible charging infrastructure and ensuring the availability of EVs, through both importing and local car manufacturing, are crucial factors to facilitate this transition.
State governments have already introduced new policies to incentivise EV purchases and co-fund the building of charging infrastructure. However, national policies and regulations are still needed to accelerate the growth of the EV market in Australia.
Low uptake of electric vehicles in Australia
Historically, several factors have contributed to the low uptake of EVs in Australia. The lack of charging infrastructure is a significant barrier to the adoption of EVs since the availability and accessibility of charging points is critical for the transition to EVs. Investment in an accessible fast-charging EV network across Australia will encourage more people to consider switching to an EV, especially given the current ‘range anxiety’ expressed by much of the population.
Compared to other countries, the price of EVs in Australia is still quite high, and the number of models available is limited. The country also has abundant reserves of lithium and rare earth metals, a strong industrial infrastructure, a highly skilled workforce, powerful training capacity, abundant renewable energy options, and untapped consumer potential.
Jim Hunwick
Partner
Investment in an accessible fast-charging electric vehicle network across Australia will encourage more people to consider switching
With the right government policies supporting investors, Australia could develop a thriving EV manufacturing sector, creating new jobs and driving economic growth. Further government policies and regulations directed at costs associated with the importation of EVs - both affordable and premium models - will assist with further growth in this sector.
Additionally, the absence of clear national policies and regulations regarding the sale of internal combustion engine (ICE) vehicles is a significant barrier to the transition of EVs. Australia has not yet announced a ban or penalty on the sale of ICE vehicles, which contributes to the low EV market share in the country. Research by the Australia Institute shows that over half of Australians support a ban on the sale of new fossil-fuelled vehicles from 2035, indicating a growing demand for regulations to address this issue.
National government interventions
The Australian government, along with state governments, has announced various policies and initiatives to increase the investment and use of EVs and reduce carbon emissions. The federal government has announced several policy measures, including a National Electric Vehicle Strategy targeting 89% of new car sales and 15% of all vehicles on the road to be electric by 2030, A$500 million investment in national charging infrastructure, and a target for 75% of new government fleet purchases to be electric by 2025, tax exemptions for zero or low emission vehicles and removal of a 5% tariff for eligible electric cars under the Electric Car Discount Bill.
State government interventions
State governments across Australia have also introduced a range of schemes to incentivise EV purchases and co-fund private industries to build EV charging infrastructure.
New South Wales
The New South Wales (NSW) government will invest A$209 million in its Electric Vehicle Strategy (32 pages / 4.91MB PDF) to increase EV sales to 52% by 2030-31. A$149 million will be dedicated to EV fast charging grants, co-funded with private charge point operators, to install and operate ultra-fast charging stations at 100km intervals across the state and every 5km in metropolitan areas.
A further A$20 million will be allocated to EV destination charging grants to help eligible regional tourist locations co-fund EV chargers. The strategy also includes stamp duty exemptions, limited time access to transit lanes, rebates, and a A$105 million Drive Electric NSW EV fleets incentive.
Australian Capital Territory
The Australian Capital Territory (ACT) has a A$5.1 million scheme to encourage more people to switch their cars to more efficient alternatives, which includes stamp duty exemptions, free vehicle registration for new EVs, access to transit lanes, and interest-free loans for recharging infrastructure. The ACT also plans to expand its charge network to at least 180 public chargers by 2025.
Victoria
Victoria's Zero Emissions Vehicle Roadmap includes a A$100 million package of policies and programs to achieve a target of half of all light vehicle sales in the state to be zero emissions vehicles by 2030. This includes a Zero Emissions Vehicle Subsidy Program providing individual subsidies at the point of purchase of more than 20,000 EVs, funding for EV charging infrastructure across regional Victoria and support for EV fleets, and a target for all public transport bus purchases to be electric from 2025.
Queensland
The government of Queensland has announced a significant commitment of A$45 million to its Zero Emission Vehicle Strategy 2022-2032. As part of this initiative, a rebate of A$3,000 will be offered to buyers of new EVs priced under A$58,000, in addition to discounted registration costs. Furthermore, the Queensland government has pledged A$10 million to support the co-funding of public EV chargers across Queensland.
Western Australia
In Western Australia, the government has allocated almost A$60 million to accelerate the adoption of zero emission vehicles. This includes A$36.5 million in rebates of up to A$3,500 for the purchase of EVs for the first 10,000 buyers of EVs under A$70,000. Additionally, A$22.6 million has been committed to expanding EV charging infrastructure across the state, while A$31 million has been allocated for climate action research and planning.
Future opportunities
Australia faces several challenges in transitioning to EVs and achieving its net zero emissions target. These challenges include the limited availability and affordability of EVs and associated charging infrastructure, the absence of clear national policies and regulations and the lack of government support for EV manufacturing.
Despite this, investing in accessible charging infrastructure, ensuring the availability of EVs, and supporting the development of a sustainable EV manufacturing sector can offer significant opportunities for investors and help drive the transition to EVs in Australia.
The implementation of clear national policies and regulations will encourage the adoption of EVs can provide a framework for the transition, create certainty for consumers, businesses, and investors, and help Australia achieve its net-zero emissions target.
Co-written by Yuliya Chis and Leanne Olden of Pinsent Masons.
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