Australia can look to others to accelerate electric vehicle transition

By leveraging best practices from other jurisdictions, Australia can create a supportive environment for the growth of its own EV industry and drive the transition to cleaner, more sustainable transportation in its journey to its net zero emissions target.

Electric vehicles in Europe

Europe is at the forefront of progressing EV policies, with countries such as the Netherlands, UK, Germany and Norway leading in EV uptake. In many European countries it is now less expensive to own an EV than a petrol or diesel internal combustion engine (ICE) vehicle.

The Netherlands

The Netherlands is the European leader in electric driving. It has over 47 charge points per 100km, making it one of the densest charging networks in the world. Dutch incentive policies are so successful that electric car ownership now costs the same as ICE vehicles. The Dutch government seeks to reduce the Netherlands' greenhouse gas emissions by 49% by 2030 and have all passenger vehicles comply with zero emissions by 2030. The Netherlands has committed to reducing its carbon emissions to net zero by 2050 in the Dutch Climate Act.

The UK

The UK has established EV strategies and incentives, committed over £2 billion to support the move to zero emission vehicles, helping drive forward the decarbonisation of the UK’s entire transport system. Drivers also benefit from an additional £56 million in public and industry funding for increasing EV charge points across the country. The UK aims to ban the sale of internal ICE vehicles by 2030 and has a net zero target date of 2050. The UK has incorporated EV chargers into lamp posts to innovate the charging process and make it more convenient for EV owners to charge their vehicles.

Germany

Germany currently has more than 19 charging points per 100km, but the government has committed €6.3bn of additional funds to rapidly scale up the number of charging stations across the country, as part of its push towards net zero emissions. Germany aims to reach net zero by 2045. Unlike other European countries, Germany is yet to declare a ban on the sale of ICE vehicles.

Norway

Norway has a leading EV market maturity, market share and growth, credited to its car tax system that makes EV models cheaper – although they are no longer completely tax, VAT and fee free. The government aims to ban all ICE vehicles by 2025, and the country is already teetering on meeting that goal several years early. Norway has further innovated the EV market by adopting wireless charging for electric taxis, in a bid to make a zero emissions cab system by as early as 2023.

Electric vehicles in Asia

China is also leading in the transition to EVs. In just the past two years, the number of EVs sold annually in the country grew from 1.3m to 6.8m, making 2022 the eighth consecutive year in which China was the world’s largest market for EVs. This is due to generous government subsidies, tax breaks, procurement contracts, financing for battery charging and other policy incentives.

Between 2009 to 2022, the Chinese government spent over US$29bn on relevant subsidies and tax breaks. The subsidy policy officially ended at the end of last year and was replaced by a more market-oriented system called “dual credits”. China has set a goal of having 40% of the vehicles sold in the country be EVs by 2030, is aiming for all public sector vehicles to be 100% EVs by 2035 and a net zero target date of 2060.

Electric vehicles in North America

The US, although a few years ahead, appears to be in a similar phase of their EV journey to Australia. It will be interesting to observe how each country's policies and initiatives evolve and how successful they are in driving EV adoption and building out the necessary charging infrastructure. The US are taking significant steps to support the transition to EVs, with a strong focus on charging infrastructure and critical mineral supply chains. Independent states across the US have set different targets for achieving net zero emissions and banning ICE vehicles. California has set a target to ban ICE vehicles by 2035 and achieve net-zero emissions by 2045. New York also plans to ban ICE vehicles by 2035 and achieve net-zero emissions by 2050.

The Biden administration, as part of the Bipartisan Infrastructure Law, has allocated over US$7.5bn for EV charging, US$10bn for clean transportation and over US$7bn for critical mineral supply chains for EV battery components, materials, and recycling. It also announced the National Electric Vehicle Infrastructure programme (NEVI), a $5bn initiative to create a coast-to-coast network of electric vehicle chargers focused on major highways that support most long-distance trips. These initiatives will provide investment opportunities in the EV industry in the US.

The recent passage of the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) allocated billions of dollars towards the development of the EV industry in the US. This investment has encouraged major auto industry players to commit billions towards mining, battery production, EV charging infrastructure, and car assembly. The enhanced investment is expected to help accelerate the adoption of EVs by prompting greater demand, reducing costs for consumers, and supporting more production capacity. The IRA and IIJA laws work together to create a virtuous cycle that could stimulate both demand and supply, leading to greater adoption of EVs.

Co-written by Yuliya Dinte and Leanne Olden of Pinsent Masons.