Australian EV policy - Part 1 - Journey to Zero Carbon

The upcoming election has put Electric Vehicle (EV) policy into the spotlight. This is probably a bit overdue given that vehicle emissions account for something like 15% of Australian and global emissions (1).

Those familiar with UNIPCC recommendations (2, 3) will be aware that oil usage needs to drop by ~50% to meet likely decarbonisation projections. This means the domination of the internal combustion engine (ICE) in the transportation sector needs to decline dramatically if we are to meet post Paris targets. Hydrogen and perhaps natural gas (in the short term) are options but the obvious replacement for the ICE in light vehicles is EVs.

The ALP policy targets 50% of new car sales being EVs by 2030 and this has prompted comparison of our EV uptake “performance” against that in other countries. Elon Musk (4) has weighed in using Norway as an example to determine we are way behind the curve. So how does Australia stack up?

The current global light vehicle fleet is about 1 billion vehicles with the overwhelming proportion using petrol or diesel. As of the end of 2018, the number of battery based vehicles in the global fleet was about 5.5 million which equates to about penetration rate of 0.55%. To digress slightly, the EV fleet is made up of pure EVs which rely exclusively on a chargeable battery and Plug In Hybrid (PHEV) vehicles which rely on battery power for about 50% of their energy usage. Pure EVs account for ~60% of the EV fleet with PHEVs being about 40%. Hybrid vehicles that don’t have a plug in charging capability are excluded from the EV classification.

So how does Australia compare on the EV stakes? With a total EV fleet of about 6,000 (as of early 2018) out of a total light vehicle fleet of over 19 million, Australia has an EV penetration rate of only 0.03% which is clearly well below the global average.

Perhaps it is because we are left hand drive? A comparison with Japan and the UK, who have EV penetration rates in the range 0.35 – 0.4% shows this is not the case – or at least not a major factor.

To find the global EV leader one needs to look, as is so often the case in recent times, towards China. It is here that one finds the driving force for both EV production and usage. With less than a quarter of the global vehicle vehicles, China has over 50% of all EVs currently in service and a penetration rate of about 1%. This support for EVs, which is based almost exclusively on localled produced vehicles, has obviously occurred with the approval of the central government. One suspects decarbonisation is part of the motivation but reducing air pollution, minimising reliance on imported oil and an opportunity to develop technical leadership in an emerging technology are likely to be other important factors.

So what about Elon Musk’s suggestion that we look at Norway where over 35% of the vehicle fleet are EVs? Statistically this is both impressive and almost certainly an outlier – it is a geographically small country with high oil prices, a high population density, hydro based electricity and a willingness to provide generous subsidies. From a policy perspective and given that we are starting behind the curve, those wishing to promote EVs should regard China and Norway as special cases (for different reasons), and look to the rest of the developed world, including countries and especially to countries with large land masses like Canada and the US. This would provide a benchmark EV penetration rate in the range 0.2-0.5%. The lessons we can learn from these countries, what policy settings are important and what pitfalls need to be avoided will be the focus of Part 2 of this blog