There’s seems to be no doubt that many Australian drivers would like their next car purchase to be electric, if only they could afford one of the few models on offer in Australia.
But there might be a better option. A new report prepared for the Australian Renewable Energy Agency highlights the opportunity for the creation of a new “grey market” – one that would allow a major new player to bring in secondhand electric EVs to Australia, and at a price more people could afford, or even new models from a manufacturer that can’t be bothered to do it itself.
To date, there are few second hand EVs available in the Australia market. Some are bringing them in from Japan, but at a modest scale – unlike New Zealand, where around half of all EV purchases are second hand EVs shipped in from Japan.
The report by EV specialists Evenergi for ARENA says the establishment of a viable market for the importation of used electric vehicles represents a significant business opportunity, and is one of the most important ways that the adoption of electric vehicles can be accelerated in Australia.
The opportunity is being created by a new rule that removes the current restrictions – to 100 a year – in the import of cars not currently brought to Australia by their manufacturer. It’s used by companies that bring in American-made vehicles and are adapted for Australia.
The new rule removes that numerical barrier. And it could be a great opportunity to plug into the second hand EV market, or even new models currently not available in Australia.
“Organisations such as NRMA are well positioned to execute this initiative as it has the complementary products required to fully articulate the revenue opportunities, and to lend the credibility needed to ensure the initiative is a success,” it says.
“Alternatively aggressive and well capitalised start-ups or existing importing incumbents could capitalise on the opportunity.”
Australia’s EV market is showing signs of strength, albeit off a small base, even while the overall car market is experiencing a slump that has lasted more than two years already.
But there remain significant barriers: Comparatively few models are available, and there is no pure electric that can be bought for less than $A50,000, including on-road costs.
Most new models are at the higher end, although the MG and Mini will compete for the cheapest offerings available in Australia where consumers have to deal with import costs, currency conversion rate and for some vehicles, the luxury car tax, not to mention a host of other charges including stamp duty.
Some manufacturers can’t be bothered. The dearth of policy aimed at accelerating adoption of EVs in Australia means that car makers like Kia are reluctant to bring in their e-Soul and e-Niro EVs to the Australia market, and are instead focusing on the UK, where policy and incentives are creating more demand.
New rules, to be brought in by June, 2021, allows for some quick thinking rivals to steal a march and gain the rights to exploit that market. And Evenergi says there are huge benefits to be had, even if the established car industry, led by the Federal Chamber of Automotive Industries warns against it.
“The Australian market continues to be frustrated by lack of supply of affordable electric vehicles. There will be little real commitment from global manufacturers to deliveries until Australia is able to reduce the relative market price of electric vehicles,” says the report.
“The importation of second hand vehicles into the Australian market may be a key lever in alleviating some key barriers to adoption of electric vehicles. There is a plentiful supply of used vehicles and given the definition of used in the legislation any vehicle that is not currently available in Australia can be imported.”
It describes a business model that would address concerns such as above by importing models for test driving, offering battery warranties (which would greatly increase drivers’ willingness to buy a grey import according to a survey conducted by Evenergi) and providing a service and support network.
These steps would be likely to help increase the social acceptance of electric vehicles, says Evenergi, thereby creating volume and therefore also a snowball effect which would pave the way for more electric vehicle infrastructure, financial viability for service and support networks.
The report outlines a range of models that could be easily sourced from fellow right-hand-drive markets Japan, which is known for its high inspection standards and good quality grey imports, and the UK, which is driven by a leasing market and therefore high turnover as well as bulk auctions.
While a realistic import fleet at this time would likely consist of the 62kWh Nissan Leaf, the 52kWh Renault Zoe, as well as plug-in hybrid (PHEV) versions of the Toyota Prius and Volkswagen Golf.
Future legislation would allow a wider range of imports including the all-electric Toyota RAV4, Mitsubishi i-Miev and Honda Clarity PHEV.
“If this market was to open up, it would not only enable a supply of affordable used vehicles, it would force manufactures to commit to bringing products into the Australian market,” says the report.
However, there is a bump in the road. The RVSA legislation, which was originally slated to be introduced in December 2019 has been delayed, with industry stakeholders saying they need “more time to plan and implement changes to ensure a smooth transition to the new regulatory framework.”
A legislative roadmap has been issued by the federal department of infrastructure, transport, regional development and communications that suggests new SEV legislation may pass in March 2021.
The delay is only holding back another chance for Australia’s national fleet to do its bit in reducing carbon emissions.
According to Evenergi, “without this change there is little chance for a main-stream grey importation market to develop. This is due to the constraints around volume, and the inability to import vehicles that have not been in the market elsewhere for 18 months.”
Until the new legislation is introduced, a hybrid model of the existing and new legislation is being used – readers can find out more here.
Bridie Schmidt is lead reporter for The Driven, sister site of Renew Economy. She specialises in writing about new technology and has been writing about electric vehicles for two years. She has a keen interest in the role that zero emissions transport has to play in sustainability and is co-organiser of the Northern Rivers Electric Vehicle Forum.