Seizing the opportunity and managing the risks
Much of this report has focused on the opportunities that are available
for Australian consumers and industry as a result of the increasing use of
electric vehicles (EVs). This chapter explores some of the proposals put
forward by submitters and witnesses in order to support EV uptake; assist
manufacturing and value chain activities; and to manage the risks associated with
the transition towards increased EV use.
Supporting EV uptake
At the Committee's final hearing in Canberra, Infrastructure Australia's
Executive Director for Policy and Research, Mr Peter Colacino clearly laid out the
role that incentives play in supporting EV uptake:
We see the patchwork of incentives that are available across
Australian jurisdictions as naturally assisting electric vehicle adoption
levels where they are provided. In jurisdictions where incentives are lower,
it's obvious that the effect would be a dampening of electric vehicle demand.
So our view of the range of incentives is that electric vehicle adoption rates
are occurring at a rate that's commensurate to the scale of the incentives.
The Electric Vehicle Council also highlighted the value of incentives in
creating market certainty and spurring investment decisions.
Globally, sales of EVs are 'still largely driven by policy support' with
95 per cent of EV sales occurring in 'just ten countries with robust EV
These countries are China, the United States, Japan, Canada, Norway, the United
Kingdom, France, Germany, The Netherlands and Sweden.
In Chapter 2, the Committee reproduced a table by ClimateWorks summarising the current
policy approaches of Australian federal, state and territory governments that
support EV uptake (see Table 2.3). The Committee notes that not all
measures focus exclusively on EVs, for example, the higher luxury car threshold
applies to fuel-efficient internal combustion engine (ICE) vehicles as well.
In broad terms, incentives or penalties work by reducing the relative
cost of EVs compared to ICE vehicles, and by improving the number and geographic
spread of charging stations. As discussed in Chapter 2, this trend has been
seen in the reverse in Denmark, where removal of incentives resulted in a fall
in the number of new EVs purchased.
This section will focus on a number of mechanisms that could provide
support for increased EV uptake, including:
Incentives (including registration and stamp-duty concessions,
tax rebates, and grants);
Vehicle emissions standards;
Education and familiarisation;
Upskilling and training service technicians; and
Importation of second-hand EVs.
There are a range of direct consumer subsidies to encourage EV uptake
that are explored below. Although each incentive is explored individually, a
cumulative consideration of implementation of multiple incentives could yield a
significant reduction in EV purchase and operating cost.
Registration and stamp duty
A number of submitters have indicated that state and territory based annual
vehicle registration fees and stamp duty payable on new EVs should be reduced
or removed as they form a barrier to EV ownership.
The ACT Government currently offers 'zero stamp-duty on new zero emissions
vehicles' and a '20 per cent discount on registration fees'.
350 Canberra made the point that these discounts are often counteracted as EVs
are heavier than conventional vehicles consequently attracting higher fees and
recommended that any proposals around registration should not penalise EV
owners for higher EV weights.
In the absence of concessional registration fees, some EV owners are subject to
higher registration charges.
Tax concessions and rebates
There are four federal taxes that apply to sales of all motor vehicles
including EVs—the goods and services tax (GST); luxury car tax (LCT), fringe
benefits tax (FBT) and import duties. Infrastructure Partnerships Australia
submitted that 'substantial upfront taxes' like these 'stifle the uptake of EVs
as a mass market option'.
The Committee were told that amendments to these taxes on EVs—either concessions
or abolition—would increase EV uptake. The Electric Vehicle Council observed
that New Zealand is applying tax concessions until EVs reach two per cent of
LCT is applied to any vehicle with a GST-inclusive value above the
threshold (for the 2018–19 financial year, the threshold was $66 331) at a
rate of 33 per cent applied to any value above the threshold. There is a
partial exemption for fuel-efficient vehicles that lifts the threshold to
A fuel efficient car is defined by the Australian Taxation Office (ATO) as
having 'a fuel consumption that does not exceed seven litres per 100
Table 5.1 sets out the LCT threshold for both fuel-efficient vehicles and other
vehicles over the last 10 years.
Table 5.1: Luxury Car Tax
thresholds 2009–10 to 2018–19
Many submissions simply called for the abolition of the luxury car tax on
EVs. The Victorian Department of Environment, Land, Water and Planning (DELWP)
proposed 'exempting zero emission EVs from the LCT until EVs become price
competitive with ICEs'.
The Australia Institute noted that an LCT exemption for EVs would
'better target the scheme's two-tiered threshold structure towards
The ACT Branch of the Australian Electric Vehicle Association argued that the
original intent of the fuel efficient exemption had been eroded since its
implementation in 2009:
We note that the Federal Government's Luxury Car Tax imposes
a lower tax burden on the purchasers of fuel efficient vehicles. This
difference in tax levels has been eroded over the past decade: it was 31%
higher for less efficient vehicles in 2009, and is now only 16% higher, thus
diminishing whatever encouragement there has been to prefer a luxury EV over a
luxury petrol or diesel vehicle. Some commentators have called for the Luxury
Car Tax to be abolished for EVs. We support this call, but if it is not heeded,
we would alternatively support a restoration of the difference in tax levels
which prevailed in 2009.
On the issue of the reduced difference in the LCT threshold between
fuel-efficient cars and other vehicles, the ATO's Luxury Car Tax
Determination explains the methods of indexing for each threshold:
The LCT threshold [for 'other vehicles'] is indexed annually
according to a factor to be determined by Parliament or, if such a factor is
not determined by Parliament, indexed annually in accordance with movements in
the All Groups Consumer Price Index (All Groups CPI).
The fuel-efficient car limit is indexed annually in line with
movements in the motor vehicle purchase sub-group of the CPI, unless the indexation
factor is 1 or less [in which case, no indexation is applied].
CPI data from the Australian Bureau of Statistics demonstrates that the
motor vehicle CPI expenditure class has been on an overall downward trajectory
The Committee understands this data to indicate that motor vehicles are
actually becoming cheaper on average over time, down 12.2 per cent since September
As can be seen in Table 5.1, since the introduction a higher LCT
threshold for fuel efficient vehicles in 2008–09, the threshold for these vehicles
has been lifted twice, $375 in 2010–11 and $151 in 2016–17. In the same period,
the LCT threshold for standard vehicles, which has been based on the All Groups
CPI rate since
2013–14, has increased by $9 151.
The Committee also notes information provided by the Parliamentary
Library as to the increasing number of vehicle models which use 7 litres of
fuel per 100km, or less.
In particular, the Committee notes that EVs make up a large percentage of
vehicles consuming less than four litres of fuel per 100 km, and a large majority
of vehicles using between four and seven litres per 100 km are petrol or diesel
Table 5.2 summarises modelling by the Parliamentary Budget Office of the
impact on revenue of amending several aspects of the LCT parameters over the
2018–19 forward estimates, namely narrowing the definition of 'fuel efficient
vehicles' reducing the LCT threshold for standard vehicles and indexing the LCT
threshold for standard vehicles using the motor vehicle expenditure class of CPI.
Table 5.2: Impact of
narrowing definition of 'fuel-efficient vehicles' and lowering LCT threshold
for standard vehicles
|LCT threshold for
'fuel-efficient vehicles' (L/100km)
|Fiscal balance to
In the longer term, the Parliamentary Budget Office stated that Option 2
above would result in an increase to the Australian Government fiscal balance
of $5.77 billion to 2028–29.
The Federal Chamber of Automotive Industries (FCAI) noted that currently
there is an import duty of 5 per cent on all imported motor vehicles (excluding
those imported from countries with which Australia has a free trade agreement).
FCAI argued that this 'acts as a brake on new environmental and safety
technologies entering the Australian market'.
Infrastructure Partnerships Australia contended that import duties should be
reduced to zero to 'reduce upfront disincentives'.
Modelling from the Parliamentary Budget Office estimates that exempting
newly purchased EVs from import tariffs from 1 July 2019 would decrease the
Australian Government fiscal and underlying cash balances by $300 million over
the 2018–19 Budget forward estimates period (out to 2021–22).
and services tax
The GST is applied at a rate of 10 per cent to the purchase price of a
new motor vehicle. Currently, the only exemption to paying the GST on a motor
vehicle is if it is used fully or partly to carry out business-related activities.
There are currently no GST exemptions for motor vehicles purchased for personal
Some submitters called for a waiver or discount of GST on all new EV purchases,
either for a specified period, such as three years, or until EVs had reached an
unspecified proportion of the motor vehicle fleet.
The FCAI highlighted that Norway which has the highest proportion of new EVs
currently exempts EVs from paying a tax similar to the GST called a value added
tax (VAT). Norway's VAT is considerably higher at 25 per cent.
Modelling from the Parliamentary Budget Office estimates that exempting
newly purchased EVs from GST from 1 July 2019 would decrease the Australian
Government fiscal balance by $190 million over the 2018-19 Budget forward
estimates period (out to 2021–22).
Fringe benefits tax
FBT is 'a tax employers pay on certain benefits they provide to their
employees—including their employees' family or other associates. The benefit
may be in addition to, or part of, their salary or wages package'.
The Committee's interest in FBT is where it is provided in relation to motor
vehicles. DELWP noted modelling in a recent ClimateWorks and Electric Vehicle
Council report that showed 'changes to FBT treatment for EVs is also an enabler
for greater uptake'. EVs are currently at a disadvantage in regards to FBT due
to the current price premium of EVs—that is, typically a higher rate of FBT is
payable by a business or individual on an EV simply because of the higher
purchase price. The removal of FBT on EVs would result in no disadvantage from
a 'vehicle cost to business' perspective.
Hydrogen Mobility Australia (HMA) stated that the removal of FBT on EVs and
other zero emission vehicles would help 'mitigate the typically higher costs of
these vehicles'. Removal of FBT could be predicated on its reinstatement once
price parity was reached with ICEs.
Aside from the higher purchase price of EVs, Tesla noted a further
disadvantage in the application of FBT:
For ICEVs, drivers are able to claim deductions against Fringe
Benefits Tax for fuel. Electricity is not currently defined as a fuel for the
purposes of FBT, and nor are EV-owners able to claim equipment used to charge
for their EVs, such as solar panels, home batteries, and charging equipment.
Mr Greg Partridge, President of the Australian Electric Vehicle
Association (AEVA) also commented that greater clarity on existing FBT and
salary sacrifice rules would be required.
In its submission AEVA detailed its concerns in relation to salary sacrificing:
Employees who wish to claim electric vehicle expenses are
confused by the existing tax provisions, and in some cases the legislation
encourages profligate use of salary sacrificed ICE vehicles.
In an answer to a question taken on notice, AEVA recommended improved guidance
on how to factor electricity costs into FBT operating calculations for EVs:
We believe the ATO needs to provide guidance on an accepted
method of assessing this electricity cost, such a use of agreed Wh/km for EVs
(or classes of EVs) x km travelled (end minus start odometer readings) x electricity
tariff where the relevant 'rates' are statutory or supported by taxpayer's
documentation, as is permitted for petrol/diesel fuel in the absence of a
complete record of all refuelling events (as might be provided by a fleet fuel
Modelling from the Parliamentary Budget Office estimates that exempting newly
purchased EVs from FBT from 1 July 2019 would decrease the Australian
Government fiscal and underlying cash balances by $140 million over the 2018–19
Budget forward estimates period (out to 2021–22).
Subsidies to buyers
A number of countries have adopted one-off cash payments to encourage
people to purchase EVs. Ms Gail Broadbent, a transport researcher from the
University of New South Wales outlined some of the incentives available, which
are summarised in Table 5.3.
Table 5.3: Comparison of
one-off subsidies to encourage EV purchases
|Limited to total car price of £60 000
|Trading in used ICE
|Vehicles under €60 000
|Subsidy for businesses and local
In its submission, 350 Canberra outlined how a one-off grant might
assist EV uptake:
We strongly support this approach to encouraging EV uptake in
Australia. A purchase rebate of (say) $5000 would significantly reduce the
price premium paid by any Australians who purchase a moderately affordable EV
(such as a Nissan Leaf, Renault Zoe or Hyundai Ioniq) in 2019 or 2020. We
recognise that such incentives should last only long enough to
"kickstart" the local market: to encourage auto makers to bring more
EV models to Australia, to encourage dealers to offer and support them, and to
encourage a wider roll-out of charging infrastructure. For example, such
incentives might begin to phase out once EVs constitute 2% of the national car
However, one submitter pointed out that as EVs are 'roughly twice the
price of the petrol equivalent', that 'even a generous state grant of $5 000
per electric vehicle still leaves a $20,000 gap between electric and petrol
vehicles in the same class'.
With price parity expected in six to eight years' time, the government 'can
either wait and let the price of electric cars drop of its own accord or
jumpstart the market by offering rebates or some other sort of financial
The Committee has heard that establishing a national target for EV
uptake would stimulate growth in this sector and signal to the global EV
industry that government is supportive of EV uptake.
Associate Professor Tim Nelson, Chief Economist at AGL Energy said that 'a
national EV target would provide a powerful platform to drive coordinated, whole-of-government
Associate Professor Nelson stated that a target in concert with other
supporting measures would provide a clear signal to business to invest in EVs
and supportive infrastructure such as charging stations.
Hobsons Bay Council advocated for a national EV target noting these 'targets
provide leadership to business and the community' and 'provide assurance to
manufacturers that a local market exists'.
Mr Tim Washington, Chief Executive Officer at JET Charge, a local company
that installs EV chargers, told the Committee about the value of the national
government having a vision as a means to underwrite support for the EV sector:
... unless you start at the start, where the government
basically says, 'Yes, there is a vision for it,' and if you want to start a
business in this space the government has already said you will be in an
industry that the government supports, that's incredibly important. And the
thing for me is that everybody says that EVs are coming. What I can say, being
in the industry itself and working with these manufacturers, is that yes,
vehicles are coming, but they're not going to come as soon as you necessarily
think they will in the Australian market if those manufacturer head offices
don't think the Australian market is suitable. We are in a supply-constrained
market right now in terms of electric vehicles. So, [original equipment
manufacturers] have the power to choose what markets they send the vehicle to.
Dr James Prest, Senior Lecturer from the College of
Law at the Australian National University explained how a national target
That may be in either policy or legislation. I recommend
short-, medium- and long-term targets. Those targets don't necessarily have to
be tied to a particular policy mechanism; they could just give a clear
direction to the market and an expectation to international investors about
where Australia is hoping to go to.
The Australian Industrial Transformation Institute (AITI) at Flinders
University emphasised that there are a number of different forms that targets
might take including:
Targets for EV manufacture and sales, replacement/reduction
in conventional vehicles or fossil fuels, and EV parking spaces or charging
stations are common forms of target-based policy.
Globally, there are many examples where targets are being employed;
countries that adopt targets predominantly have higher EV uptake. The Chinese
Government has a target of 5 million EVs on the road by 2020.
The New Zealand EV Programme is targeting 64 000 EVs by 2021, whereas the
United Kingdom's Road to Zero Strategy is targeting new EV purchasing to
constitute 50–70 per cent of the market by 2030 and 100 per cent by 2040.
In 2016, the South Korean Government announced 'targets of 250 000 electric
vehicles and 1 240 000 hybrid vehicles on the road by 2020'.
The Netherlands also has a national target for electric buses of 680 by the end
Hobsons Bay Council also stated that some countries—such as The
Netherlands, Norway, India, China, France, Germany and the UK—have taken step
further and nominated dates for the phase-out of conventional vehicles.
As at 1 July 2018, the Australian Government Fleet comprised a total of
12 691 vehicles. Table 5.4 sets out the breakdown of the fleet across
Table 5.4: Australian Government Fleet profile by vehicle
There are 10 EVs in the passenger fleet of 5 735 vehicles.
Mr Jonathon Lathleiff, Senior Manager for Corporate and External Affairs
at Toyota Australia, told the Committee that 'there's great value in government
having proactive purchasing leadership' in relation to EVs and that this leads
to a 'cascade effect' to the broader automotive fleet.
Associate Professor Nelson was also supportive of government fleet targets:
A government fleet EV target, not too dissimilar to AGL's
business-specific target, would provide scale and could potentially create a
second-hand market for depreciated EVs that would provide an additional avenue
for private ownership.
The Electric Vehicle Council submitted that governments should adopt a
'buy electric first' approach:
Under this arrangement, when a suitable electric model is
available, it or they will be the preferred purchasing option—to the exclusion
of petrol and diesel alternatives.
NHP Electrical Engineering Products (NHP) asserted that a robust local
second hand market for 3–4 year old EVs could be established in a 4–8 year
timeframe as a result of government EV procurement.
In addition to the benefits to the second hand market for private
buyers, Mr Sam McLean, Senior Manager at Tesla, remarked on some of the
other benefits associated with increased EV purchasing in government fleets:
government fleet purchases, which are very important because
they fuel the second-hand market, and it also means that fleet providers and
companies that manage private fleets change their processes: they look at the
total cost calculations, they update their way of rolling out vehicles to
include charging stations et cetera. So government fleet targets are a very
effective way of driving change not only in government fleets but beyond.
The UK Government has already committed to 25 per cent of the government
car fleet being ultra-low emission vehicles by 2022 and recently announced a
goal of 100 per cent of the government car fleet being ultra-low emission by
The ACT Government is integrating an increasing number of EVs into the
territory government's fleet in the immediate future, and was flagged as an
exemplar model for other Australian jurisdictions.
The ACT Government outlined its strategy to the Committee:
The Action Plan includes a commitment to ensuring 50 per cent
of newly leased Government passenger fleet vehicles are zero emissions vehicles
in 2019–20, increasing to 100 per cent of newly leased vehicles from 2020–21.
This will mean that the ACT has a zero emissions vehicle fleet of approximately
600 vehicles. There is also an expectation of a growing second hand market as
leases expire. In this way Governments can help facilitate a community
transition through their own fleet purchasing.
In January 2019, the NSW Government announced 'a 10 per cent target for
new NSW Government general purpose passenger fleet cars from 2020/21—with 10 per
cent of new vehicles purchased or leased by agencies to be electric or hybrid
The Parliamentary Budget Office provided modelling setting out the
budget implications for meeting government fleet targets of 30, 40 and 50 per
cent by 2025 and 2030 respectively over the 2018–19 forward estimates, and
these are presented in Table 5.5.
Table 5.5: Budget impact
of government fleet targets
target (per cent)
|Target date – 2025
(fiscal balance $m
|Target date – 2030 (fiscal balance
Vehicle emissions standards
Vehicle emissions standards were explained by the Royal Automobile Club
of Western Australia (RACWA):
Vehicle emissions standards set a 'limit' for vehicle
emissions. The limit for each vehicle is determined by the weight of the
vehicle, known as the 'limit curve'. Vehicles that produce emissions greater
than the designated limit have penalties imposed on the manufacturer. Credits
and debits are accrued and offset against each other for vehicles that are
'under' or 'over' their designated emissions limit.
Mr Ali Asghar, Senior Associate, Power, Energy Storage and EVs, Bloomberg
New Energy Finance, told the Committee that vehicle emissions standards are 'a
major factor' in vehicle manufacturers introducing new EV models to any market.
Australia's current vehicle emissions standards for new light vehicles
is based on the Euro 5 standards. The Ministerial Forum for Vehicle Emissions (Ministerial
Forum) is currently reviewing whether Australia should adopt the Euro 6
standards for light vehicles.
However, as noted in Table 2.1, Australia does not have a light vehicle carbon
dioxide (CO2) emission
standard in place.
The RACWA highlighted how Australia's CO2 emissions intensity
for passenger vehicles compared globally:
According to the National Transport Commission, the CO2 emissions intensity for passenger cars in
Australia during 2017 was 171.5g/km, 45 per cent higher than the European
average of 118.5 g/km. The European Union currently has a CO2 emissions standard of 130g/km which was
introduced in 2015. This will be reduced to 95g/km for all new cars by 2021
(phased in from 2020) and plans to reduce that by a further 30 per cent by
2030, with the first 15 per cent reduction required by 2025. The United States'
CO2 standard will be approximately 99g/km
Ms Sarah Fumei, Project Manager at ClimateWorks Australia explained the
effect of applying a CO2 vehicle emission standard:
Vehicle emissions standards would set an average emissions
requirement across a manufacturer's fleet and would thereby encourage
manufacturers to sell more electric vehicles with zero tailpipe emissions.
The Committee were told that the Ministerial Forum on Vehicle Emissions
(Ministerial Forum) had modelled three standards, 105/119/135 grams of CO2
per kilometre. Each standard was found to not only provide net economic
benefits, but also environmental benefits through greenhouse gas abatement. Counterintuitively,
the stronger the standard, the higher the economic benefit to the economy. Ms
Fumei elaborated on the net benefits of establishing the most stringent
standard of 105 grams of CO2 per kilometre:
The standard would provide 65 megatons of abatement by 2030,
$27.5 billion in fuel savings and $13.9 billion of net economic benefit. So
it's an important policy and would provide benefits for the Australian economy
and for emissions.
At the Melbourne hearing, Mr Anthony Larkins, a member of Professionals
Australia and engineer from GM Holden outlined his view on an approach to
emissions controls and its benefits:
We should legislate a future-emissions-standard road map,
commencing with the implementation of the complete Euro 6d standard, followed
by a continued trajectory of reducing CO2-grams-per-kilometre
targets, helping to improve our fuel security and reduce greenhouse gas
emissions. We should consider the implementation of clean-air zones around
cities as per most European countries, which will help reduce air and noise
pollution from our growing cities.
The DELWP submitted that improved fuel consumption labelling on all
motor vehicles—new and used—would lead to more informed decision making by
consumers and subsequently the types of cars they choose to drive:
The current Australian fuel consumption label on new vehicles
discloses direct fuel consumption and CO2 emission values. According
to the International Energy Agency, a label combining direct disclosure and an
eye catching comparative rating is the most useful to vehicle purchasers. This
combined fuel economy labelling system has been applied in New Zealand. The
fuel economy label for new vehicles in New Zealand displays their fuel economy
values in litres per 100 kilometres alongside a star rating. The label also
displays future financial savings. In addition, the United Kingdom provides an
easy to read comparative bar graph that gives an immediate indication of where
the vehicle’s fuel economy fits within the market.
The submission continued:
In addition, several countries, including New Zealand and the
United Kingdom, mandate the labelling of fuel economy on new and / or used
vehicles. The current Australian labelling system only mandates it for new
Evidence relating to the Ministerial
Forum on Vehicle Emissions
At the Committee's first Canberra hearing held on 17 August 2018, the
committee received evidence from the Department of Infrastructure, Regional
Development and Cities (Department of Infrastructure) and other departments relating
to the Ministerial Forum. Senator Patrick asked whether the Ministerial Forum
produces minutes, to which Mr Alex Foulds, Executive Director, Surface
Transport Division, Department of Infrastructure replied:
No, they don't produce minutes as such.
At the time, Mr Foulds acknowledged that departmental officials attended
these Ministerial Forum meetings. The three departments agreed to provide on
...notebooks of officials that have attended insofar as there
are notes relating to electric vehicles.
On 13 September 2018, Mr Alex Foulds, then Acting Deputy
Secretary, Department of Infrastructure, wrote to the Committee correcting the
evidence he provided at the hearing on 17 August 2018.
Mr Foulds noted in his evidence that he had stated that 'the forum had met
three times'. Mr Foulds clarified this statement:
In my response I was referring to the number of official
stakeholder consultation forums the [Ministerial Forum] has held (7 December 2015,
4 April 2016, 15 February 2017).
The [forum] has also met on nine other occasions (24 November
2015, 4 February 2016, 17 August 2016, 5 June 2017, 4 July 2017,
24 October 2017, 12 February 2018, 29 May 2018, 18 June 2018).
The Committee received responses to questions taken on notice in late
September 2018 from the three departments. The Department of Infrastructure
stated that it was unable to provide any further information to the Committee:
...the Department has asked all current officials who attended
meetings of the Ministerial Forum on Vehicle Emissions to review their
notebooks for meeting notes relating to electric vehicles. The Department can
confirm that the relevant notebooks have been destroyed or contained no notes
relating to electric vehicles.
The Department of Industry was also unable to provide additional
whilst the Department of the Environment provided a more detailed response
relating to the Ministerial Forum's meeting of 4 April 2016.
The Committee were not provided with any copies of minutes as part of these
Separate to the Committee's inquiry processes, Senator Patrick made
a Freedom of Information (FOI) request on 18 August 2018 to the
Department of Infrastructure requesting minutes of the Ministerial Forum.
Senator Patrick was provided with draft minutes or notes relating to seven
meetings of the Ministerial Forum. Senator Patrick made a second request asking
the Department of Infrastructure to undertake an internal review of the FOI,
which unearthed additional documents related to meetings of the Ministerial
Senator Patrick circulated the FOI response to Committee members. The
same material was also attached to correspondence provided to the Committee by
Mr Alex Foulds on 22 November 2018.
The minutes indicated that officials from the Department of Industry and the
Department of the Environment were also at the Ministerial Forum meetings, as
well as officials from the Department of Infrastructure. Meeting minutes for
five meetings were not included.
with departments seeking clarification of evidence
On 23 October 2018, the Committee wrote to Mr Alex Foulds, Department of
Infrastructure, and the Secretaries of the Department of the Environment and
the Department of Industry requesting a reconsideration of evidence provided to
the Committee in relation to the Ministerial Forum in light of the minutes
provided pursuant to Senator Patrick's FOI request.
Responses from the Department of Infrastructure
On 22 October 2018, prior to the Committee sending out its request for
clarification, the committee received correspondence from Ms Pip Spence, Deputy
Secretary, Department of Infrastructure. This letter noted Mr Foulds' evidence
that the Ministerial Forum 'don't produce minutes as such' and acknowledged
Senator Patrick's FOI request.
Ms Spence brought the existence of two Ministerial Forum meeting minutes
from 'late 2015 and early 2016' to the Committee's attention (documents that
were provided to Senator Patrick as part of an FOI request). Ms Spence
acknowledged that the Department of Infrastructure should have clarified the
record to draw attention to the draft minutes and apologised for this error. Ms
Spence did not provide copies of the minutes.
On 22 November 2018, Mr Alex Foulds wrote to the Committee. In this
letter, Mr Foulds:
sincerely apologised for not personally clarifying his evidence
of 17 August;
provided draft minutes of some Ministerial Forum meetings as
provided to Senator Patrick in an FOI. A subsequent request by Senator Patrick
for an internal review of the FOI request identified an additional document
that has also been provided to the committee.
Noted that 'minutes (draft or final) or notes for the other
meetings of the Ministerial Forum were not provided as there were either no
officials from the department present or no notes were taken'.
Noted the past topics discussed at the forum.
from the Department of the Environment and the Department of Industry
The Department of the Environment responded to the Committee's
correspondence stating that it would not seek to correct the record and noting
that it would defer to the Department of Infrastructure on this matter as
Department of Infrastructure provide the secretariat to the Ministerial Forum.
In addition, the Department of the Environment provided a brief summary of
topics discussed at the Ministerial Forum relating to EVs.
The Department of Industry stated that it would not seek to correct the
record as officers speaking with the Committee on 17 August 2018 were not
familiar with the work of the forum. The Department of Industry also stated it
would defer to the Department of Infrastructure as the secretariat to the Ministerial
Forum. The Department of Industry raised one amendment to its earlier evidence
noting that the official who attended Ministerial Forum meetings had actually
only attended one meeting of the Ministerial Forum. The department provided a
copy of minutes from the second stakeholder engagement session held on
4 April 2016.
On 4 December 2018, the Committee placed a number of questions on notice
in an effort to understand if any records existed for the meetings for which
minutes had not been provided. Furthermore, the Committee sought to understand
the Department of Infrastructure's processes and obligations with respect to
secretariat support for the forum.
On 17 December 2018, the Department of Infrastructure provided the
Committee with answers to questions on notice confirming that notes and minutes
for five meetings of the Ministerial Forum did not exist. For the meetings of
the Ministerial Forum where no minutes exist, no departmental officials had
attended the meetings and the Department of Infrastructure stated that it did
not make arrangements for notes or minutes to be taken for meetings which are
not attended by departmental officers.
All witnesses should remain mindful of their duty to correct or clarify
evidence at the earliest opportunity. The Government guidelines for official
witnesses before Parliamentary Committees and related matters quite clearly
specifies this obligation:
5.6. Correction or clarification of evidence
5.6.1. Witnesses will receive transcripts of their evidence
in the days following their appearance. The transcript should be examined
promptly to establish whether any evidence needs to be corrected or clarified.
On occasions, a witness may become aware of the need for correction or
clarification before the receipt of the transcript or, in the case of a written
submission, before the commencement of hearings.
5.6.2. Once the need to provide a committee with revised
information has been established, it is most important that the committee
receive that revised information at the earliest opportunity. In the case of
officials who made submissions or appeared as witnesses in relation to the
administration and implementation of government policy (but not necessarily
those covered by Part 3), the departmental secretary or agency head (or senior
official who represented the secretary at the hearing) should be informed that
revised information is to be provided. Depending on the nature of the
correction, it may also be appropriate to inform the minister. Officials need
to keep in mind that, while their evidence remains uncorrected or unclarified
they are vulnerable to allegations that they have misled a committee.
5.6.3. Supplementary information for a committee should be
forwarded to the committee secretary. If uncertain of the most appropriate way
to provide a committee with additional or corrected information, officials
should seek the guidance of the committee secretary.
Tenancy laws and building codes for
new units and detached dwellings
The Committee has been told that there are a range of constraints in
relation to the installation of home charging infrastructure for current and
prospective EV owners. In its submission, Tesla described these barriers,
particularly for those who live in apartments or for those who rent their home
who are not able to install charging equipment due to inflexible strata rules
The International Energy Agency (IEA) observed that a number of
countries such as France, Spain, Portugal and the United States have taken
steps to 'adapt property laws to simplify and accelerate the process of
approval procedures for electric car owners to deploy (private) [charging]
infrastructure, notably in rented and/or owned multi-unit dwellings, including
in parking garages'.
Consideration also needs to be given to new developments and future EV
charging requirements. In its submission, NHP specifically called for mandated
charging infrastructure in all new apartment complexes:
NHP recommends that consideration be given to incorporating a
clause in the National Construction Code, to require that a given percentage of
car parking spaces in new multi-residential builds include AC electric vehicle
chargers in the 7kW range. This percentage could start relatively low (for
example 5%, one car parking space provided with EV charging per 20 on the plan)
and scale up as the transition to electric vehicles in the national fleet
increases. The cost of this would be negligible in the scheme of the overall
construction cost but would very effectively remove a barrier to early adoption
of electric vehicles by residents of apartments. Arrangements for how the
energy delivered is metered and paid for can be left to the private sector –
many solutions around this already exist and will be deployed wherever
deployment of EV charging equipment is required by the code.
The submission continued, flagging the indirect benefits of this
An added benefit of this approach is that it will cause every
electrician working in apartment construction to become familiar with electric
vehicle charging equipment, supporting the future large-scale rollouts that
will be needed.
The IEA noted that France and the EU are taking steps to ensure that all
new and renovated apartment complexes are ready for EV charging when it is
In France, recent legislation mandated that 50–75% of parking
bays in any new or renovated residential building must be pre-installed with
conduits that allow the easy installation of [electric vehicle supply equipment
(EVSE)] ranging between 7 kW and 22 kW. In commercial buildings, 5–10% of parking bays must have conduits suitable for installing [EVSE] with a
power rating of at least 22 kW. The European Commission included similar
provisions in a proposal aiming to revise the EU Directive on the Energy Performance
NHP reported that one of the current Australian Standards for electrical
installation in new buildings is acting as a barrier to new developments being ready
for EV chargers. NHP noted that if building plans included capacity for EV
chargers, the electrical system needs to be wired to 'assume all the [EV]
chargers will be running at full capacity all the time'.
The submitter continued:
This conservative assumption leads electrical system
designers to require a significantly larger upstream supply and network
connection than would otherwise be required. This, in turn, leads to the
provision for electric vehicle charging being removed from the scope of
construction as a cost saving measure. The cost of the electric vehicle charging
equipment is often quite small, by comparison to the costs associated with the
larger network connection.
A more measured approach would be to include a smart load management
system that schedules EV charging to occur when other electricity use within
the complex is at its lowest such as late at night or early in the morning.
That would allow EVs to be recharged overnight, but not require a considerable
network upgrade that prohibits any EVs being charged in the development. Accordingly,
NHP recommended that the Australian Standard be amended in the following way:
Where a smart load management system is not implemented,
assume all the electric vehicle chargers will be running at full capacity all
the time. Where a smart load management system is implemented, assume
electric vehicle charging load will be effectively limited by the parameters of
Public charging infrastructure
The Electric Vehicle Council has observed that increasing the number of
charging stations is a key factor in increasing EV uptake. The availability of
sufficient charging facilities and provisions within the electricity market
will be essential to avoid consumer disruption and potential impacts on the
power grid. A lack of charging locations to service specific journeys, emergence
of queues at charging stations or grid impacts causing localised brownouts (as
has occurred in some locations in the UK) would quickly discourage EV uptake.
Energeia put forward a similar view noting that 'investment in public
charging infrastructure, particularly Direct Current Fast Chargers (DCFC), is
correlated with high levels of EV uptake globally, as evidenced by the impact
of DCFC deployment in Norway'.
Energia also found that under its moderate EV uptake scenario (described in
Chapter 2) that 28 370 fast charge "hoses" would be required up to
2040 at a cost of nearly $1.7 billion (excluding land).
The Electric Vehicle Council also flagged that 'access to suitable
roadside sites and costly connections to state-owned electricity grids are major
inhibitors to establishing charging stations.
Furthermore, 'processes to plan, assess or construct electric vehicle charging
sites are non-existent within most governments', and the lack of information
and regulatory capacity are impeding the roll-out by private companies.
With the bulk of charging occurring at home, the rollout of public
charging infrastructure will need to be driven by a coordinated strategy to
ensure that high value infrastructure is located where needed and not
duplicated. The ACT Government has called for 'a coordinated approach to
supporting installation of a strategic network of charging stations in capital
cities, at national institutions, regional centres and rural areas'.
In Chapter 4 of the report, the Committee has discussed the public
charging infrastructure plans of the Queensland and ACT Government, the RAC in
Western Australia, and the NRMA in NSW. The IEA has stated that some countries
are aiming to establish EV charging stations along major highways at an
interval of between 45 and 115 kilometres (kms). As an example, the Chinese
Government aims to install a total of 800 highway chargers with a minimum
distance between chargers of about 50km by 2020.
By comparison, the United States aims to install 900 chargers at a minimum
interval of approximately 115km in the same time period.
Fast Cities Australia cited recent research that found that 'a national network
of 200 regular DC fast chargers (100 x dual-charger sites)...would be equivalent
to a $1 000 direct consumer incentive'.
Mr Rodger Whitby, Chief Executive Officer, St Baker Energy Innovation
Fund, explained that the public confidence and increased uptake of EVs hinged
on the rollout of public chargers, but that private investors took on huge risk
in the early years until demand for the chargers caught up:
...the Fast Cities project is a bold move to build critical
infrastructure here in Australia well ahead of the minimal viable uptake level
of EVs. It's a chicken-and-egg scenario. If the infrastructure is not built, the
EVs will not come, but, until the EVs come, the infrastructure is not viable.
So this investment is a huge risk for private investors such as ourselves, and
we are actively seeking ways to share that risk with others, including, for
instance, [Australian Renewable Energy Agency (ARENA)].
In addition, the DELWP identified regional and rural areas as 'less enticing
for private investment':
Tourists and residents are more likely to rely on public
charging stations in regional and rural areas. Those living in rural areas
travel further to access services than metropolitan residents, including
education and employment precincts, and do not have as many public transport
options. Vehicle ownership is perceived as more of a necessity for those living
in regional Victoria. Similarly, tourists driving through regional Victoria
need easy access to public charging infrastructure along popular tourist routes.
Environment Victoria submitted that the federal, state and territory
governments need to establish targets for public charging stations and adopt
policies that encourage the rollout of public charging station infrastructure:
This can be achieved by offering rebates for developing
public charging stations in the locations where they are most needed to
encourage a broad coverage of charging stations across the state and avoiding
clusters in affluent areas. Governments can draw from the experience of New
Hampshire in the USA, where the government has successfully incentivised the
rollout of charging stations through reverse auctions for publicly available
charging stations in priority areas. Under this scheme the government has
subsided bids that offer best value-for-money stations in priority locations.
The Australian Logistics Council advocated that the Clean Energy Finance
Corporation (CEFC) should 'provide low interest finance to companies in order
to install' EV charging infrastructure.
In its submission the CEFC noted it 'is in discussion with EV charging
network developers with a view to investing in commercial EV charging
Education and familiarisation
One of the challenges the Committee covered earlier in the report was
concerns that consumers have about the reliability or range capability of EVs. The
AITI explained that increased familiarisation of drivers with EVs can improve
their acceptance of the new technology:
...research has noted through the experience of drivers that a
'learning phase' is essential to successful behavioural change processes.
Drivers must be immersed in the experience of driving an EV to feel confident
in the knowledge that a range of factors—such as the 'quietness' of EVs and the
need to plan lifestyles around the much shorter range of EVs compared to
ICEs—defines the parameters of their attitude and behavioural changes.
In its submission, the Tesla Owners Club of Australia (TOC) spelt out
the benefits of an education program to dispel some of the myths around EVs:
Whilst much focus is placed upon the green credentials of
electric vehicles, we see a surprisingly diverse set of drivers from [TOC]
members in choosing a Tesla electric vehicle. These include outright performance
of the vehicle, the technology, freedom from the oil supply chain, reduced
running costs, disruptive change to the automotive industry and the overall
superior driving experience. Much of the public resistance to electric vehicles
relates to outdated concepts regarding the range, charging times, cost of
electricity and a reduction in the fun of driving.
The Australian Electric Vehicle Association of South Australia remarked
on the use of sport as a means to 'capture the public's imagination' and to
show that EVs are high performance machines. The submitter called for Adelaide
to host a round of the Formula E:
There is growing interest in the electrification of motor
sports. Recently an electric vehicle won Pikes Peak and the Goodwood Festival
of Speed. Motor racing captures the public's imagination. In the case of EVs it
removes the myth that EVs do not perform.
By hosting a round of the Formula E in Adelaide, there would
be more than just the race, but a host of aligned activities with a focus on
Racing also spawns innovation. For example Renault and Jaguar
have used Formula E as a testing ground for their road going vehicles, in
particular battery management.
This event would dovetail nicely into EV manufacturing in the
state, as the innovation demonstrated on the track has the potential to be
transferred quickly to the road going vehicles.
By hosting a round of the Formula E in Adelaide, it would
build on Adelaide's rich history of staging major motor sports events and see
Adelaide become the focal point for electric vehicles within the region.
TheDELWP observed that 'some manufacturers use their own fleet and
demonstrator vehicles for promotion and education',
but TOC reported that car dealerships were not providing prospective EV buyers
with all of the facts:
It is noted that traditional car dealerships have generally
not been good at promoting electric vehicles either due to lack of staff
education or a conscious decision to not promote the new technology which needs
less after sales service support (which drives their profitability).
FCAI said that original equipment manufacturers, through their
dealerships, were willing to bring EVs to the market, and provide ongoing
maintenance and service to the vehicle over its life. Dealerships are investing
in the equipment required to service EVs as Mr Tony Weber, Chief Executive
Officer, FCAI explained:
we don't sell just a product; we also sell a service to
consumers. Part of that service is that we train the technicians or the
mechanics so that they are in the right place to actually be able to service
and maintain your vehicle. They provide the dealerships with the right
diagnostic tools so that they can actually work on the vehicles. So, the
important part is not only to bring the vehicle to market but to actually
maintain and service that vehicle across its life.
A number of submitters recommended that a consumer education campaign be
developed to raise awareness of the benefits of EVs.
HMA suggested that an education program could include EV demonstrations and
AITI noted the establishment of an EV Experience Centre in the UK and the
"Plug'n'Drive" EV Discovery Centre in Toronto, Canada which 'aims to
help residents understand the benefits of EVs'.
The AITI has suggested that a similar centre known as a Future Mobility Centre
could be established in Australia to enable members of the public to become
familiar with EVs in a non-sales environment.
Upskilling and training service
The forecast increase in EVs will require service centres and the
technicians they employ to focus on developing new skills and the use of new
diagnostic equipment. The Australian Automotive Dealer Association expressed
their views on expected changes in the vehicle servicing sector:
It is also important to note that when these vehicles do need
repairs, they will require appropriately trained technicians as EVs pose an
increased risk of electrocution and fire. In fact, the emergence of EVs will
necessitate significant changes in skills and training requirements which will
be needed to service and maintain an increasingly electrified fleet.
The Australian Automotive Aftermarket Association articulated a similar
concern noting the possible future shortage of suitably qualified service technicians:
The most immediate concern is likely to be the availability
of suitably trained technicians to service and maintain vehicles to ensure
roadworthiness and road safety. Whilst these vehicles will have fewer
serviceable components, EVs generate heat and friction and these components
will require maintenance and servicing.
The Victorian Automobile Chamber of Commerce (VACC) was mindful that the
servicing sector would face the competing pressures of less work for businesses
(as EVs require less servicing than conventional vehicles) whilst also
fundamentally changing the types of skills required by technicians in the
[There] will also [be a reduction in] the volume of work for
automotive mechanical repair businesses given the greater reliability of EVs
and their need for less servicing and maintenance. The technical sophistication
of electric vehicles will also require investment in upskilling within the
sector. Diagnostics, programming and coding skills for vehicle technicians will
be essential to remedy vehicle faults – including the customisation of EVs.
Given the high voltages inherent with EVs, there will also be greater
occupational health and safety compliance required to protect both staff and
the general public. These cost pressures and the imminent decline in volume of
repair work, is anticipated to reduce the number of operators and employment
within the sector, as EVs establish a greater presence in the vehicle fleet.
On this point, Sage Automation advised that 'as our vehicles become
smarter, traditional mechanical jobs will become high-end technician roles,
responsible for vehicle control systems that integrate with intelligent road
VACC recommended that a comprehensive Certificate 3 level training
qualification for emerging [EV] technician roles' be developed with a focus on
'appropriate theory and training in electrical and battery systems,
diagnostics, programming and other core requirements pertaining to the service
and repair of' EVs.
Importation of second hand EVs
Vehicle pricing forms a significant barrier to uptake as the costs of
new model EVs are considerably higher than conventional counterparts. As raised
earlier in this chapter, the formation of a large second hand EV market would
help to underpin a more affordable entry point for prospective private EV
buyers. The Australian Imported Motor Vehicle Industry Association (AIMVIA)
A large proportion of Australian car buyers are simply not in
a position to afford a new environmental vehicle, irrespective of their desire
to reduce their vehicle running costs or carbon footprint.
Sluggish sales of new environmental vehicles in Australia
over a number of years has meant that used environmental vehicles are in
exceptionally short supply, representing just 0.07% of the total used vehicle
market. This chronic lack of availability has in turn pushed up the price of
used EVs, making them even less attractive to potential buyers.
Nichibo Australia submitted that allowing the import of second hand
vehicles will 'mean that car manufacturers will need to be more price
competitive on Environmental Vehicles otherwise they will risk losing market
share to vehicles imported via the concessional pathway'.
The AEVA referred to the experience in New Zealand where barriers to
second hand imports have been removed and there has been a surge in EV uptake
as a consequence.
Currently, second hand vehicles can be imported into Australia under the
specialist and enthusiasts register if they meet two of four criteria relating
to appearance, unusual design features, performance and appearance in
specialist motoring magazines. AIMVIA noted that the Road Vehicle Standards
(RVS) Bill 2018 is currently being considered by the Australian Parliament.
The then Minister for Urban Infrastructure and Cities, Hon Paul Fletcher MP,
explained one of the purposes of the bill:
bill simplifies and clarifies arrangements for the importation of vehicles
granted concessions against the national standards by consolidating the current
pathways into one concessional entry pathway. It also expands the range of
vehicles that can be considered under the specialist and enthusiast vehicle
As part of this bill, a new Environmental Vehicle criterion is to be
included under the Specialist and Enthusiast Vehicle Scheme. AIMVIA explained
the effect of this proposed change:
In essence, the proposed Bill and Rules will soon permit the
independent importation of vehicles (both new and used) that use an alternative
method of propulsion to internal combustion engines, or use an alternative
method or propulsion in conjunction with an internal combustion engine.
AIMVIA suggested that the current RVS rules be amended to 'allow all
environmental vehicles to be considered eligible for independent importation,
irrespective of whether have been previously sold by the OEM in Australia, but
only after they cease being sold new in dealerships'.
AIMVIA argued that this change would result in 'approximately 2000 more
environmental vehicles [entering] the Australian market per annum, at far more
affordable prices than the new EVs currently available'.
Mr Tony Weber, Chief Executive Officer of the FCAI argued against
allowing second hand imports pointing out that there are a range of safety and
regulatory issues associated with importing second hand vehicles into the
The problem is that the individual who buys that car has no
rights under the domestic law and is subject to the laws of the original
country of that vehicle. So, if I purchase a second-hand Japanese car and I
have an issue with it, I need to go to the Japanese legal system for my
Nichibo Australia advocated for a 'cautious, staged approach, combined
with appropriate consumer protections, would go a long way to increase the
Environmental Vehicle fleet in Australia without subsidies'.
Supporting manufacturing and value chain activities
Chapter 4 examines the opportunities and challenges for manufacturing
and value chain activities associated with EVs. This section builds on that
discussion and explores a range of mechanisms that would support Australian
An industry plan; and
Boosting domestic EV demand
Earlier parts of this chapter have focused on how governments might
directly support consumers to purchase new EVs through a range of incentives. Increasing
domestic demand could help to stimulate local supply chains.
There are a number of other countries that are providing funding and
support to increase EV uptake. The New Zealand Energy Efficiency and
Conservation Authority (EECA) has 'established a contestable
fund to encourage innovation and investment in promoting, enabling and/or
accelerating the uptake of electric and other low emission vehicles in New
Mr Tony Fairweather, Group Managing Director at SEA Electric described
how his Australian-based company is a beneficiary of this fund:
Yes, it's been a fantastic initiative that we've benefited
from as a supplier of commercial electric vehicles in New Zealand, as have the
operators over there. It's a funding program through EECA...the EECA contestable
fund. The concept behind the fund is that every three months the New Zealand
government releases a certain amount of funding, somewhere in the vicinity of
$4 million or $5 million. Companies, end users, have the ability to submit an
EV, an electric-vehicle-related initiative, that they would like some funding
for from that fund on a quarterly basis.
Mr Fairweather continued:
The funding is 50 per cent of what's required to approve
submissions, up to a million dollars. Most of them are around the $200,000 or
$300,000 mark. Typically, for one vehicle or a couple of charging stations on a
property, they try to approve different submissions. There's been some rubbish
trucks that we've been lucky enough to supply over there. But, once rubbish
trucks in Auckland have been fulfilled, they'll look at other initiatives like
concrete mixers. We were also lucky enough to be able to supply five delivery
vehicles for a company over there called Countdown, which is essentially
Woolworths. We supplied them with their first electric home-delivery vehicles
with refrigerated bodies, which were 50 per cent funded by the New Zealand
government. The initiative has very much accelerated EV uptake for those
wanting to test and try and feel and get an understanding for EV. I think the
initiative is great and it's proven extremely successful in New Zealand.
They're up to around [round] five, I think, at the moment.
Existing government programs and
The Department of Industry, Innovation and Science (Department of
Industry) indicated that the Australian Government is supporting Australian
industry in a number of ways:
Australian Government has a range of programs that build business capabilities
in many aspects of Australian manufacturing and services. These programs can
help businesses to participate in the global supply chains of multinational car
makers manufacturing EVs. The programs include the: $100 million Advanced
Manufacturing Fund; Automotive Transformation Scheme; Entrepreneurs' Programme;
Industry Growth Centres Initiative; Cooperative Research Centres (CRC) program;
R&D Tax Incentive; and CSIRO.
These schemes are briefly described below:
The Research and Development (R&D) tax incentive 'is the
government's key mechanism to stimulate Australian industry investment in
R&D' offering 'tax offsets for eligible R&D expenditure'.
The Automotive Transformation Scheme (ATS) is discussed in Chapter
4. The ATS was established in 2011 to encourage businesses in the automotive
sector to upgrade equipment and engage in innovation and R&D. The ATS
'encourages competitive investment and economic sustainability in the
Australian automotive industry'.
The $155 million Growth Fund was established as a joint exercise
between the federal, Victorian and South Australian Governments, and Toyota and
Holden in response to the announced closure of the Toyota and Holden car-making
plants in Australia. The majority of this funding has been allocated as grants
to a number of companies seeking to diversify their businesses away from Toyota
and Holden. The balance of the fund is dedicated to training and job placement
for retrenched staff.
The Advanced Manufacturing Growth Fund is valued at $100 million
and was established to 'help industry in South Australia and Victoria be more
competitive through innovative processes and equipment'.
The Department of Industry has also flagged the importance of the industry growth
initiative—in particular, the Advanced Manufacturing Growth Centre and the
Mining Equipment, Technology and Services Growth Centre—and the Cooperative
Research Centres Program, specifically iMove CRC.
The Australian Renewable Energy Agency (ARENA) described its remit and
what projects are eligible for funding:
Under the Australian Renewable Energy Agency Act 2011,
ARENA is permitted to provide financial assistance (grants) for research,
development, demonstration, commercialisation and deployment of renewable
energy technologies and the storage and sharing of information and knowledge
about these technologies. Renewable energy technologies include
"hybrid", "enabling" or "related" technologies.
These can include technologies and approaches such as energy storage, load
shifting, electrification, fuel switching and energy efficiency, where these
use, enable or support greater deployment of renewable energy.
Notwithstanding ARENA's broad remit, its direct investment in EV
projects is currently limited to research projects with no clear engagement
State governments are also providing industry support. The Centre for
Energy and Environmental Markets at the University of NSW (CEEM UNSW) submitted
that 'the South Australian Government has awarded Precision Buses a $2
[million] grant for electric buses and the Victorian Government [awarded] SEA
Automotive $517 000 for commercial vehicles'.
Importance of industry grants and
The Committee heard that Australian-based public charger manufacturers Chargefox
and Tritium had applied for ARENA grants in the past and were in the process of
seeking funding from ARENA.
Dr Paul Sernia, Chief Product Officer, Tritium explained the importance
of grants as the stimulus for Tritium's growth during its formative years:
I'd also add that really we have benefited from government
grants. There are two things which are always important: the amount of money
you get and the timing of the money. So often, early in the day, we weren't
getting a lot of money out of those grants, but they were very important in
pushing us along to the next stage. I'd highlight that one of the key ones was,
at the time—this was in 2011—that there was a federal Commercialisation
Australia innovation grant scheme, and that was fundamental to us receiving our
first private investment into the company. That matched those funds 50-50, so
we received a $1.15 million grant and were able to raise $1.15 million in
private investment. A part of the conditions of that investment was a
successful grant outcome, so that's a good example.
Whilst acknowledging that Tritium had received about $6 million in
grants since 2005, Tritium also noted that some grant programs were not able to
be accessed by those in the EV supply and value chain:
...access to grants and funding specifically focused on the
Automotive sector are not readily applicable for businesses in the EV industry.
For example, the Automotive Transformation Scheme (ATS) criteria are not
applicable for businesses in the EV supply and value chain.
Dr Sernia also reasoned that requirements relating to eligibility for CEFC
and ARENA grants could be broadened to recognise the embedded energy storage
inherent in EVs:
Perhaps another example is the potential for electric
vehicles to be used as energy storage devices. Similar to solar schemes, if
energy storage schemes are being looked at in the future, perhaps electric
vehicles should fall within the scope of those as well.
Tritium indicated that it had benefited from existing federal R&D
Mr Warren Pearce, Chief Executive Officer of the Association of Mining and
Exploration Companies expressed concerns about the government's proposed
changes to the R&D tax incentives:
Our concern is that, in this space where we're trying to
encourage companies to get into processing and refining and potentially into
electrochemical processing into the third stage, there is going to be a
significant R&D component to that and we wouldn't like to see that
opportunity lost as an unforeseen consequence of the change.
In a report produced for ARENA and the CEFC, Energeia found that
government grants assisted public charging network operators offset the high
cost of establishing the network:
Our research has identified a number of clear winners in the
public charging infrastructure market including ChargePoint, SemaConnect and
New Motion, all originally independent players focused on [Level 2 slow] charging
technology development that have leveraged revenue from government grants and
third party charging infrastructure owners and operators to address the high
capital requirements of infrastructure deployment.
Mr Paul Fox, Head of Corporate Development at Fast Cities Australia explained
that Fast Cities Australia is seeking to develop a fast charging network around
Australia. Mr Fox contended that his company would benefit if it could
successfully acquire a government loan equating to about 50 per cent of the
network's cost with the remaining 50 per cent being funded by private
The Australian Logistics Council suggested that the Smart Cities and
Suburbs Programs (known as City Deals) should be leveraged to 'further develop
charging infrastructure and encourage planning regimes favourable to' EV use.
Deakin University explained that its battery materials research program,
BatTRI-Hub is funded through both Australian Research Council and Centre of
Excellence grants. Deakin explained the value of this work:
This research is geared towards the development of the next
generation of battery technologies such as lithium-sulphur and lithium metal
batteries that offer substantially longer battery life, improved safety and
high temperature operation. The research group has engaged with international
companies including Honda, Toyota and Cytec/Solvay to develop new materials and
now has a state-of-the art, flexible prototyping facility for electrochemical
devices including advanced Li-ion, Li metal, sodium-ion and
battery-supercapacitor hybrid prototypes.
The submission continued, explaining the commercial linkages that this
research has fostered:
The research program has led to the filing of several
materials patents and the group has engaged with local chemical companies such
as Boron Molecular on the synthesis and upscaling of materials for wider use in
battery research. The battery materials characterisation expertise within the
group offers a major opportunity to support the chemical synthesis and
characterisation for an electric vehicle manufacturing sector.
Some submitters raised government procurement policy as an area which
could be used to support local EV manufacturing. State and territory
governments in Australia are also acting to boost demand. The Queensland
Government's fleet manager QFleet 'has committed to doubling the number of EVs
in its leased fleet each year over the next four years'.
The City of Adelaide told the Committee that it will seek to transition its
entire fleet to EV by 2030.
Public transport procurement is another area which could drive EV demand
and associated local job creation. Mr Christian Reynolds, Director of Precision
Buses observed that the City of London aims to convert its entire fleet of
4 000 buses to EVs by 2020. Australia has nearly 100 000 buses with
about 500 replaced annually.
One submitter argued that the bus manufacturing sector could be the catalyst to
rebuild Australia's industrial base:
Australia has a nascent electric bus manufacturing industry
in South Australia and Victoria and there exists an opportunity there to revive
Australia's manufacturing expertise.
In a response to a question taken on notice, the Queensland Department
of Transport and Main Roads (DTMR) explained the role of the Local Benefits
Test within the Queensland Government's procurement policy:
The Queensland Procurement Policy does not prevent suppliers
tendering for its contracts. The Policy requires the application of a Local
Benefits Test for all significant procurement. The Local Benefits Test focuses
on the benefits that any supplier can bring to the local area.
The ACT Government acknowledged that it has a similar procurement
requirement for 'local industry participation' which includes 'employment of
local people, the training of local people or commitment to a trades course'.
Ms Michelle English, Associate Director, Sustainability, City of Adelaide said
that 'council's procurement policy certainly has a weighting for South
Mr David Smith, Secretary of the Vehicle Division at the Australian
Manufacturing Workers Union suggested how local content rules within a
procurement framework might take practical shape:
Ensuring that those cars that we bring into Australia have
local content in them with the battery would be a good place to start.
In a response to a question taken on notice, the ACTU called for a
re-write of the Commonwealth Procurement Rules:
The rules must be required to be applied in a manner that
consistently and correctly ensures overall economic benefits from tenders are
considered when assessing value for money, rather than just an assessment of
the cheapest cost.
Sage Automation claimed that there is a need for a step-change in how
procurement is undertaken moving away from open tenders to more collaborative
processes that allow for specifications to be developed and optimised
throughout the procurement process:
Procurement models need to move from the current open tender
process to a collaborative procurement model based upon an agile framework.
Whilst transport tender writers have a view of what they are looking to
achieve, they lack the technical expertise to clearly specify it within tender
documents. This results in missed opportunities to deliver the step change
advancement of our transport and infrastructure we require. Agile tender documentation
includes the vision and outcome but uses a collaborative approach and
specialist expertise to specify advancement and an outcome that is more cost
effective in the end. Some upskilling of governments and councils in this area
will also help to acquire the understanding of incorporating fast advancing
technology into long-term programs of work.
An industry plan
The Committee has received no evidence of a clear, coherent and
comprehensive federal government policy position supporting the development of
an EV industry. Further, it is also not clear whether there is any crossover or
overarching strategy in relation to the transitional automotive sector funds—ATS,
the $155 million Growth Fund—the Advanced Manufacturing Growth Fund and
This lack of leadership by the federal government was highlighted in
evidence to the Committee. Mr Lance McCallum, National Campaign
Coordinator at the Australian Council of Trade Unions spoke about whether
Australia should have started making plans some time ago for the domestic
manufacture of EVs and associated componentry:
if you've got a time machine, or if you had one, I would say
we should definitely have a serious conversation about maybe getting in that
time machine and going back five years or seven years, or possibly even 10
years and maybe doing things a bit differently, in terms of creating a space
for EVs domestically here in Australia.
Mr McCallum noted that 'it would be nice to have some industry plans in
a number of different industries' including EVs.
Ideally, these plans would recognise the development of advanced manufacturing
techniques, the rise of Industry 4.0 and the specific needs of the local
Australian EV sector.
CEEM UNSW explained some of the risks of a coordinated approach:
The risk is of course that the price of such coherence in
Australia would often seem to be "lowest common denominator" outcomes
that stifle technology innovation and progress.
Whilst acknowledging these risks, CEEM UNSW described the role of
different jurisdictions in developing and adopting an industry strategy:
particularly in still emerging electric mobility areas, we
need frameworks that allow different jurisdictions to support different pilots
and trials, while seeking federal and State government policy measures to drive
wider deployment and value adding progress.
Sage Automation stated that any policy approach should be driven by a
focus on local Australian businesses through targeted grants whilst noting that
'attracting off-shore manufacturers to set up shop in Australia' could become
possible with new models of automotive manufacturing focused on upgrading
vehicles. Sage Automation cautioned that this could only happen in the presence
of an efficient and capable workforce.
Training the EV workforce
Building on the discussion in Chapter 4 about the large, highly skilled
and experienced automotive workforce in Australia, the Committee has been told
that with specific and targeted training, this workforce is ready to employ
their expertise in the emerging EV sector.
The DTMR highlighted the prospective job opportunities in this sector:
Clean energy and eco-friendly jobs are considered to be one
area of future job growth. These industries will require new skills and
training programs to ensure these future industries have a capable and
available workforce. This includes ensuring that future workforces are
appropriately qualified in science, technology, engineering and mathematics
(STEM) fields. Industry development programs should also be considered
alongside appropriate education and skills training programs.
The DTMR continued:
These industries will require new skills and training
programs to ensure that these future industries have a capable and available
workforce. Industry development programs should also be considered alongside
appropriate education and skills training programs.
The ACTU also supported training workers in this area and acknowledged
that the EV sector's workforce requirements would be quite diverse:
The training of qualified workers in this field must be a
priority. While small, there is already a growing electric conversions industry
in Australia and it is integral that this work is done by trained and qualified
workers to ensure that it is done safely. Building a qualified and effective EV
production workforce would also serve to provide safe and qualified workers to
industries like EV conversions and battery production.
The TOC indicated that any future manufacturing would most likely take
place in the context of automation requiring a highly skilled workforce.
Deakin University noted that there is currently a shortage of skilled
graduates in the automotive sector. Acknowledging the increased role of
automation, Deakin University highlighted the diverse range of skills that graduates
in this sector would require in the future:
Higher degree content in this sector will need to evolve to
provide skills such that these students will become leaders in the Australian
advanced manufacturing sector. Training in leadership, intellectual property,
marketing, business management and finance would make these graduates more
industry ready and desirable for the sector. Provision of substantial stipends
to attract the best students to this sector will be required.
Ensuring that the industry is growing and ready to employ these
graduates is also an important factor in attracting graduates and
undergraduates to study in these fields.
The Electrical Trades Union suggested a number of initiatives that would
support the development of an EV workforce:
Transition incentives for workers to return to the industry. For
[example], a transition centre was set up at Elizabeth [South Australia] for
workers leaving the industry. There is capacity to turn this initiative around
and use it to return workers to the industry.
Apprenticeships and in particular, mandatory apprentice rations
linked to all forms of Government support to the industry;
Development of an appropriate training package consistent with
the historical concept of ensuring skills learnt are transportable.
In his submission, Mr Larkins suggested that the EV 'industry could be
fostered by providing investment into PhD scholarships and university research
grants administered through the CSIRO'.
Managing the risks
The transition from conventional vehicles to EVs is not without risk and
needs to be undertaken in a coordinated manner to mitigate against any
unintended consequences. This section explores the following:
Coordination and planning;
Road user charging.
Coordination and planning
Earlier in the chapter, the Committee discussed a range of ways in which
governments can act to increase EV uptake, ranging from establishing a vision, through
to concrete proposals that can incentivise people to purchase EVs. The Committee
has heard that after establishing this policy framework, there is a need to
plan and coordinate its implementation.
The Committee has heard about a number of different models used globally
to coordinate the transition to EVs. In the United Kingdom, the Office for Low
Emission Vehicles (OLEV) works across government to 'support the early market
for ultra-low emission vehicles' including 'development, manufacture and use'.
Mr Daniel Hilson, Founder and Managing Director of Evenergi provided more
detail noting that OLEV's function is to 'develop and coordinate strategy and
to create and manage grant programs, research, awareness programs,
infrastructure, strategy and standards'.
Mr Tim Washington, Chief Executive Office at JET Charge described the
overarching coordination role that the OLEV plays in implementing the United
Kingdom Government's approach to EVs:
Then you have a practical means of delivering that vision,
which is something like the UK's Office of Low Emission Vehicles, whereby
basically all the government policy is channelled through that office. Then you
have very specific policies that the office enforces, which are the kinds of
things that Tritium were just talking about, like toll roads and all that kind
of stuff, and vehicle incentives.
Mr Hilson talked about how OLEV also functions as an independent
consumer advocacy body in addition to its other functions:
Essentially, under the Office for Low Emission Vehicles
they've established Go Ultra Low. They invited the manufacturers and government
to participate, and they implemented a number of measures to coordinate things
like the grants, consumer awareness and creating a path to purchase. So through
that mechanism you could work out how to install a charging station, how to
claim grants, and essentially where you could do a test drive and the various
steps along the journey to buying an electric vehicle. That just doesn't exist
in Australia at the moment. If you go online tonight and try to buy a petrol
powered vehicle, you go to carsales.com and you know exactly what to do. If you
go to buy an electric vehicle—I challenge any of you to figure out how you can
actually execute on that.
The South Australian Government was mindful that the United Kingdom's
model allowed for a whole of government response to a profound change in the
transportation system with implications on a number of interrelated areas
A well-led national response may require a new national
policy structure, for example the UK Office for Low Emission Vehicles that sits
across the Transport and Energy/Industry portfolios, and the better use and
coordination of existing [Council of Australian Governments (COAG)]-related
transport, energy and environment groups, for example the Transport and
Infrastructure Council (TIC) and Transport and Infrastructure Senior Officials Committee
(TISOC). If so, then any group should consider the inter-relationships with
wider future mobility disruptors including autonomous vehicles.
On this point of coordination, the Committee has noted the recent COAG
Transport and Infrastructure Council communiqué,
which discussed a coordinated national approach to encourage the uptake of low
and zero emission vehicles, particularly electric vehicles:
It was agreed the Transport and Infrastructure Senior
Officials' Committee will develop a program of work to address the barriers and
challenges impeding the uptake of these vehicles for Council consideration in
the first half of 2019. This work could include initiatives to support
infrastructure development, measures to reduce upfront costs and increase model
availability, and programs to educate and improve the awareness of consumers of
the benefits of shifting to low emission vehicles, while acknowledging the need
for a market-based response.
A number of submitters also expressed support for the New Zealand
Government's EECA EV program which coordinates the government's effort to
increase EV uptake.
During the course of the inquiry, the Committee met with EECA officials.
The Committee has been told that the early stages of the transition to
EVs is the ideal time to establish a number of national standards across the industry
to ensure a uniform approach in key areas such as charging adaptors. In a
supplementary submission, Flinders University described the establishment of EV
standards at the national level as an 'enabling initiative'.
Hyundai Australia called for the introduction of 'internationally harmonised regulations,
codes and standards'.
The South Australian Government went further saying that the absence of
national coordination could result in a similar situation to the ad-hoc
development of rail networks in Australia during the mid- to late- nineteenth
century which resulted in Australia having a number of different rail gauges
across the national network.
The Australian Electric Vehicle Association put forward its preferred
Embrace the Type-2 charging standard as Australia's national
charging standard. This is important for preventing further delays in
infrastructure roll-outs. DC fast charging should also shift to the CCS-2
standard. Financial support should be offered to convert vehicles over to this
standard, where applicable.
Type-2 is the predominant charging standard in Europe.
FCAI and its membership are supportive of the Type-2 standard
with the City of Adelaide indicating that it had also adopted this standard.
In its submission, FCAI outlined its support for a harmonised approach:
Recognising the need for rapid deployment of battery electric
vehicle charging infrastructure, the FCAI membership has made a public
commitment to supplying vehicles from 2020 that meet a set of international
charging standards. Certainty in these standards within Australia will enable
vehicle manufacturers and EV charging infrastructure providers to make
investment in future electric vehicle-related product plans with reduced risk,
and encourage government to develop programs to incentivise uptake of electric
Furthermore, FCAI highlighted that lack of certainty on the charging
standard is also providing another level of uncertainty for organisations
considering installing public charging equipment.
iMove Australia commented that 'adoption of charging standards would help to
avoid incompatibility issues with proprietary technologies'.
The need for standards around battery technology and battery management
systems were also raised as a priority area, particularly in seizing the
opportunity to develop standards that are suited for Australian conditions.
Ms Gail Broadbent called for the public recharge stations to be 'signposted
with standardised signage' to 'improve accessibility for customers' and to
maximise network value.
TOC raised concerns that not having a national signage standard for accessing
charging infrastructure would inconvenience interstate travellers.
The Committee also received evidence in relation to the weight of EV
trucks. The Committee were told that EV trucks weigh five to ten per cent more
than ICE equivalents due to the batteries. Mr Fairweather spoke about the
difficulties this causes for operators of 4.5 tonne gross vehicle mass (GVM)
The particular issue that we've spoken about as part of this
only relates to one segment of the commercial vehicle space and it's at the
smallest end of the truck area—what's referred to as the 4.5 tonne GBM truck
area, which is the threshold upon which a passenger car licence needs to become
a truck licence, a commercial vehicle licence. That's why you see many small
4.5 tonne trucks around Australia. Hire companies and rental companies et
cetera use them by the thousands, because a passenger car licence driver can
use them. An example is New Zealand of Countdown, who've got those five
vehicles for delivery vehicles. New Zealand has a six tonne limit for exactly
the same trucks. So it just seems unusual that 4.5 is required here. It seems
unnecessary. I think it's a terrific opportunity to be able to open that
space—just for electric vehicles for the time being and for our professional
fleets maybe initially, maybe without the allowable towing capacity that
normally comes with a passenger car licence, so you're compensating.
In its submission, SEA Electric anticipated that battery weights would
decline over the short term due to technological advances, and noted that any
measures to increase vehicle masses would only be required in the short term.
Road user charging
Earlier in the report, the Committee discussed the erosion of the fuel
tax excise. Bloomberg New Energy Finance estimated that loss excise could range
from about $1 billion per year by 2030 up to about $5.5 billion by 2040.
With the risk of this continued erosion as vehicle fuel efficiency improves and
EV uptake increases, many submitters and witnesses advocated for the introduction
of a road user charge as a replacement funding measure. This measure could be
introduced for EV owners who do not pay fuel excise tax as they do not use
fuel. In addition, EV owners are currently a relatively small grouping which
would allow for a pilot program to trial the new revenue mechanism.
Infrastructure Partnerships Australia called for 'a new distance-based
road user charging mechanism' in conjunction with other upfront disincentives
for EV owners (such as LCT and vehicle import duties) to be reduced to zero,
which would reduce the purchase price of an EV.
Mr Adrian O'Dwyer, Chief Executive Officer of Infrastructure Partnerships
Australia put forward his organisation's view that levying the charge on EVs
would be a way to slowly introduce it on vehicles that are not subject to fuel
I see electric vehicles as an opportunity to introduce that
type of system, but, at the thin end of the wedge, that will grow over time so
that there's less upfront cost for that transition [from fuel excise tax to a
road user charge].
A separate approach has been used in New Zealand where a distance-based Road
User Charge (RUC) applying to all vehicles has been in place since 1977.
Dr James Prest, from the College of Law at the Australian National
University stated that the New Zealand Government currently provides an
exemption from RUC for light EVs 'until they make up two percent of the light
This exemption takes effect until the end of 2021, with a simlar exmeption in
place for heavy commercial EVs.
The Parliamentary Budget Office provided the Committee with modelling on
the budgetary implications of introducing a road user charge on electric
The Parliamentary Budget Office assumed the charge would be phased in over five
years, levied on a per kilometer driven basis at an equivalent rate to fuel
excise, and collected from EV owners monthly. The Parliamentary Budget Office
modelled four options for the starting date of the scheme. Table 5.6 sets out
the fiscal balance (revenue generated minus departmental expenses) for the road
user charge at 2028–29 for each of the starting dates.
Table 5.6: Fiscal balance
2028–29 for road user charge
|Start date for road
to 2028–29 ($m)
|1 July 2022
|1 July 2023
|1 July 2024
|1 July 2025
This chapter has canvassed a comprehensive suite of measures that would
encourage and facilitate the increased use of EVs, and support the local
manufacture of EVs and their components. The Committee has heard those
jurisdictions that provide incentives, such as vehicle registration and other
tax concessions (including luxury car tax and import duties), help to reduce EV
purchase price and in turn increase EV uptake. One-off grants to new EV
purchasers provide a similar type of support.
The Committee was told about the role that national EV targets play in
outlining a vision and the expectations that individual countries have for EVs
as part of the transport system. National targets can provide a level of
certainty to vehicle manufacturers, charging infrastructure operators and local
industry, indicating the extent to which they should engage in particular markets.
The Committee heard that government can add to this certainty through
committing to government fleet EV procurement targets. Government fleet targets
increase demand, encouraging vehicle manufacturers to introduce additional and
cheaper models to market, whilst also underpinning a second-hand market providing
more affordable access to EVs. Relaxing restrictions on second hand imported
EVs would also support the used EV market and provide a lower price entry to EV
Evidence received during the inquiry supports the introduction of more
stringent vehicle emissions standards, including on carbon dioxide, noting that
this would not only make EVs more competitive, but also lead to improved
economic, public health, and environmental outcomes.
A coordinated approach to the rollout of public EV charging
infrastructure and amendments to tenancy laws and building codes that will
provide EV owners with a supportive eco-system, offering certainty that EVs can
be charged as required at home or in public. Some states and territories,
motoring associations and the private sector are taking the first steps in
rolling out public infrastructure, but federal government support could
accelerate this process and ensure that rural and regional parts of the country
are not left behind.
Consumer education and vehicle demonstrations will assist in allaying
any concerns or misconceptions around EV use. Whilst amendments to national
training requirements for vehicle service technicians to include EVs will
ensure that trade qualifications evolve with the changing transport fleet and
that sufficient qualified technicians are able to meet the growing demand.
The Committee has heard about the positive flow-on effects that
increased EV uptake—both in Australia and globally—will have on the local
manufacturing sector. There are some businesses who are already taking
advantage of these opportunities. Currently, there are a number of federal
schemes such as the ATS, the Growth Fund and the Advanced Manufacturing Growth
Fund that are providing grants to eligible companies involved in the
conventional and EV automotive space. Notwithstanding this investment, there is
a lack of an overarching national strategy to ensure that this funding is more
effectively targeted to emerging automotive sectors including electric and
Targeted government procurement can also help to drive a growing
manufacturing sector based on EV components, assembly and supply-chain
products. Part of a coordinated national approach should also factor in the
growing need for a highly skilled workforce that utilises and augments existing
skillsets, whilst nurturing the next generation of workers.
Finally, this chapter has examined the need for a comprehensive
coordinated approach from the federal government, anticipated the need for
harmonised national standards and considered applying a road user charge mechanism
as a strategy to replace failing fuel excise revenue.
The next chapter outlines the Committee's conclusions and
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