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No carrot, no stick: Why EVs are not making it to Australia in big numbers

  • November 11, 2021
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  • 4 minute read
  • Bryce Gaton
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I was recently asked whether there has been an uptick in EV sales since the introduction of EV rebates and subsidies in the ACT, NSW and Victoria. My short answer was ‘it is too early to tell’. The longer answer is hard data is going to be hard to get for some time.

The reasons for this difficulty come down to supply, and why Australia’s supply of EVs is so limited. In general, all battery electric vehicle sales in Australia (except the Tesla Model 3) are limited by fixed (and low) allocations. As a result, sales of anything but the Model 3 can’t go up much in the immediate future.

You can’t even get a Model X or Model S to Australia till December, 2022, and the Model Y is still delayed with no firm Australian launch date. (It was originally expected here over 12 months ago).

Therefore the only real indication of an uptick is likely to be seen through increased Model 3 sales and lengthening waiting lists for all the rest.

So to the data. Monthly car sales data are found through Vfacts – but Tesla doesn’t report its sales to Vfacts, so we get a very skewed snapshot when it comes to new BEV (battery electric vehicle) sales.

Vfacts data to the end of September shows BEVS up 189% on September 2020 and 191% for the year to date. That seems to show no impact yet for the rebates and subsidies …. Except that Tesla makes up over three-quarters of BEV sales here as their Model 3 is the only BEV available in numbers.

Tesla is expected to deliver 15,000 or more of their Model 3 this year as part of the predicted 20,000 EVs to be sold here this year.

So it seems that no surge in EV sales is happening …. but:

  • September is too early for any surge to show – waiting lists and supply chains are still filling orders made from 3 – 6 months or more ago.
  • Australian BEV supply constraints are such that waiting lists are more likely to lengthen than there be any surge in sales of models currently on offer.
  • New BEV models are coming from new manufacturers. These include Polestar, Ora and BYD. These are all from China and are very likely to be less supply-constrained – with BYD and Ora being budget BEVs. Therefore any increase in sales numbers due to these won’t be seen for 6 – 12 months.

So when/where might we see an uptick? If you are looking for an indicator: the cheapest Model 3 is probably the one to watch.

So why can’t we get the EV models offered overseas brought here? (Or, for that matter, the ones we do have allocated in serious numbers).

Quite simply, whilst the carrots and sticks of policy are so strongly wielded in support of EVs by governments in Europe, the US and the like – manufacturers have much more incentive to send their BEVs to markets closer to home.

What is needed here is proper federal EV direction before that the same can happen here. Manufacturers can’t plan for the ‘Australian’ market when there are differing support mechanisms favouring different vehicle segments in different states (eg local government fleet or individual sales or commercial use) or differing price thresholds for the subsidies on offer with the same EV qualifying in one state, but not another. The Australian market is small enough already, let alone turning it into seven individual markets for BEVs!

That federal direction by the way is not nebulous ‘EV charging support’ with no explanation of what it is, or when it is to materialise. That is just a jumble of words as equally ‘meaningful’ as the spin Australia used to get by at COP 26.

Below is what federal direction needs to include:

  • Fuel quality and emissions limits that match the current ones in Europe and the USA. Currently, we are many years behind both of them.
  • BEV targets for government fleet purchases. This is not unprecedented – for instance we used to have a strong ‘buy Australian first’ model for government vehicle purchases.
  • Give businesses better depreciation and other tax incentives to buy BEV. Again, hardly controversial – businesses are offered an ever-changing landscape of accelerated depreciation schedules, instant tax write-off thresholds etcetera to purchase different types of equipment as the government sees fit to favour important parts of the economy.
  • Support DC fast-charge network roll-outs whilst they are still uneconomic due to low EV numbers. This has also been done without controversy in the past to support important emerging industries.

In turn, these will:

  1. Move business and government emissions down (i.e. pick ‘low hanging’ emissions fruit and set an example to the general public).
  2. Start to normalise (and take the politics out of) BEVs in the public mind and
  3. Accelerate the second-hand BEV market to make BEVs (around 50% of all new sales are fleet/business purchases).

BTW: None of these are BEV mandates to ‘make’ people buy BEVs….

Then the states can ‘trim their sails’ to the federal wind. Currently we are in the doldrums, the ships are drifting aimlessly and we are getting nowhere fast ….

bryce gaton
Bryce Gaton

Bryce Gaton is an expert on electric vehicles and contributor for The Driven and Renew Economy. He has been working in the EV sector since 2008 and is currently working as EV electrical safety trainer/supervisor for the University of Melbourne. He also provides support for the EV Transition to business, government and the public through his EV Transition consultancy EVchoice.

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