Taxes and technology: Supporting electric vehicle uptake in Australia

Researchers from Monash Business School and Griffith University are encouraging the Australian Government to review taxation law to support the affordability of electric vehicles and charging infrastructure.

The Reliable Affordable Clean Energy for 2030 (RACE for 2030) co-operative research centre, have awarded $220,000 to Dr Diane Kraal from Monash Business School and Dr Anna Mortimore from Griffith University to investigate taxation solutions to fix the lack of home charging infrastructure and affordability as top barriers to the adoption of battery electric vehicles (BEVs) for business fleets.

It follows the Federal Government allocating $25 million to drive electric vehicle uptake with a ‘technology not taxes’ approach.

Dr Kraal and Dr Mortimore are researching how the transition to emissions reduction should be facilitated by the Australian taxation system together with advancements in technology.

Transport is responsible for nearly a fifth of Australia’s total CO2 emissions. Transforming business fleets to comprise clean energy vehicles would be a huge step forward in national emissions reduction, Dr Kraal says.

“In 2020, Australian business fleets acquired mostly petrol and diesel vehicles, resulting in the sector producing a higher weighted average CO2 emissions, 185 grams of CO2 emission per kilometre, 41 per cent higher than Europe in 2018. Given business fleets make up the majority of passenger and light commercial cars on the road, we feel there’s greater impact in focusing on fleet vehicles,” Dr Kraal says.

“Accelerating the uptake of BEVs by business will not only allow fleet employees to experience driving and charging fleet BEVs without having to own one, but it will also contribute to the supply of more affordable BEV’s to private consumers when ex-fleet BEVs are rolled over to the secondhand market,” added Dr Mortimore.

The project, titled ‘Business fleets and EVs: Taxation changes to support home charging from the grid, and affordability’ will look at how taxation support is the key to exponentially increasing BEVs in fleets.

The project is examining the increased takeup of BEVs in fleets overseas. The incorporation of zero-emission vehicles in the fleet mix is an area where Australia is lagging behind much of the world.

“Currently, BEV technology is not affordable in Australia and workplace charging infrastructure is either low or non-existent. Our project will investigate the barriers to business fleets uptake of BEVs through taxation changes and incentives that will address affordability and enable fleet employees to charge their BEVs at home,” said Dr Mortimore.

The UK, France, Germany, Denmark, Norway and Italy all have a significant penetration of BEVs, when compared to Australia, as a result of government tax support, Dr Kraal said.

As far back as 2012, the EU government has been paving the way for widespread BEV usage in fleets by granting widespread tax relief for business users to charge their cars. In 2021, there is a stronger focus on BEVs over hybrid models.

“In 2020, Norwegian cars collectively emitted 60 grams of CO2 per kilometre. In Germany, it was 131g per kilometre. And in Australia, it was 185g for business fleets (exceeding the national average of 180 grams of CO2). We need to be aiming to lower CO2 emissions to keep global warming below 1.5-2 degrees Celsius,” Dr Mortimore says.

“The future of low emissions transport is BEV and Australia needs to be ready,” said Dr Mortimore.

“The Australian Government has already acknowledged that business fleets are an effective pathway for early adoption of electric vehicles. However, there needs to be clear guidance on how to implement incentives and how new technologies will be treated from a taxation perspective for those that use their vehicles for business purposes,” added Dr Kraal.

Source: Mirage News. Reproduced with permission.