Coalition government report predicts half new car sales will be electric by 2035

A report released by the federal government’s Bureau of Infrastructure, Transport and Regional Economics (BITRE) has highlighted the absurdity of the Coalition’s anti electric vehicle campaign in the last election, predicting that by 2035 and with no change in government policy, half of all new car sales in Australia will be electric.

The Coalition ran a reckless and ridiculous campaign through the election, demonising Labor’s target of 50% EV sales by 2030, declaring that it would be the end of the weekend, vowing to protect “tradies” and making absurd claims about charging.

Most people believe that 50% is not much of a stretch target, particularly in light of the transformation taking place around the world, and in the car manufacturing industry.

To put this into context, the BITRE base-case modelling shows that by 2030, Australian EV sales will continue to lag behind two thirds of the 22 countries included in the study.

By 2040, EV sales in Australia will have caught up with much of the world at 60% sales, with a ceiling of around 65% EV sales.

The modelling uses a cost-based approach to forecast EV uptake (essentially it looks at the comparison of costs of EVs against internal combustion engine (ICE), referred to as fossil fuel vehicles (FFV) in the report).

The five year lag on the 2030 target called for by Labor (but which was castigated by the Coalition despite being based on expert advice from the Electric Vehicle Council) may not seem great.

However, cast in the face of warnings from climate science experts that carbon emissions must be reduced by 2030 if we are to arrest permanent and irreversible effects of climate change, it seems shall we say, laissez faire.

Transport emissions in Australia account for 19% and show no sign of slowing down, a fact that has been documented in several reports and charts including by Charting Transport blogger Chris Loader and in a report released by Climate Analytics in April.

The new BITRE report notes that financial incentives to buy EVs (and hence a positive change in cost ratio) increases uptake of electric vehicles, whereas removal of (or in the case of Australia, lack of) such subsidies results in a decline in EV sales.

The report also notes other various considerations – such as funding road maintenance and extra demand on the grid – that must be tackled as the shift to electric vehicles ramps up, regardless if 50% sales be reached by 2025, 2030 or 2035.

“As electric vehicles spread throughout the fleet, revenue from various taxes, especially those on fossil fuel such as excise taxes and carbon taxes, will decline,” the authors of the report note.

“These taxes are currently used to fund a substantial part of the cost of road construction and maintenance, funding which will have to be replaced.

“Also, existing tax exemptions from value-added taxes and other purchase taxes for electric vehicles will become increasingly expensive the faster they gain market share of new vehicle purchases. The same applies to subsidies for annual vehicle use.

“The faster the increase in the electric vehicle fleet, the faster the growth in demand on the electricity supply, and the more urgent the needs for system reconfiguration.

“On the other hand, the faster the spread of electric vehicles, the slower the increase in fossil fuel emissions from transport.”

Interestingly, it is not the first electric vehicle report issued by BITRE – as previously noted by The Driven, a 1974 report from the bureau discussed the potentially positive impact that electric vehicles could have on the pollution and noise complained about by the increasing numbers of cars in cities.

A lifetime ago, perhaps, and battery technology was not what it is now – although that report did also note the role Australia could play in improving and making batteries at the time, a call that has been repeated by parties such as Monash University.