Nine out of 10 new car sales will be electric in 2030, under Labor plan

The Australian Labor Party has stopped well short of announcing a ban on the sale of new petrol and diesel cars, or even a fuel efficiency standard.

Both are common policy decisions in Europe and elsewhere, But Labor’s climate and energy policy unveiled on Friday makes a truly remarkable assumption: By 2030, nine out of ten new car sales in Australia will be electric.

To put that assumption into context, electric cars – including plug in hybrids – currently make up just 2 per cent of new car sales in Australia, and more than half of those come from a single model, the incredibly popular, and available, Tesla Model 3.

Labor’s assumptions, revealed in the details of the modelling done by Reputex that supports its Powering Australia Plan (which also assumes an 82 per cent share of renewables by 2030), contrasts sharply with the forecasts of the Coalition government.

The Coalition assumes only a 29 per cent share for EVs of new car sales by 2030, begging the question of where exactly they think these cars will be sourced, given the massive shift to EVs in both stated country policies, particularly in Europe, and the electric plans of most of the Australian car makers.

Labor assumes 89 per cent of new car sales in 2030 will be electric, with about 16 per cent of that number plug in hybrids. So that is 73 per cent fully electric. Most of this increase appears to occur closer to 2030, but over the next eight years Labor anticipates an extra 2.15 million EVs on the road than the Coalition, including an extra 600,000 sales in 2030 alone.

This graph above shows the scale – in terms of emissions – of what Labor is proposing compared to the Coalition. The Coalition’s so called “national EV strategy” (in orange) will result in the reduction of just four million tonnes. Labor’s will deliver 93 million tonnes.

How does Labor expect to achieve this?

First, it wants to make EVs cheaper. It will do this by providing exemptions on fringe benefits tax and import tax. According to its calculations, the import tariff exemption will save over $2,000 on models in the $50,000 range.

The FBT exemption will result in savings of up to $8,700 on a $50,000 model (such as a Nissan Leaf); $10,600 on a $60,000 model (such as a Hyundai Kona); and $12,000 on a $70,000 model (such as a Tesla Model 3).

Secondly, it will seek to increase the number of models available in Australia, and the choice for customers.

The primary mechanism for doing this is to mandate targets in government fleets. It assumes that rthe Commonwealth fleet is large enough to underpin the introduction of 3 to 7 new EV models each year.  And it will create a vibrant second hand market.