Australia's Electric Vehicle Policy: Battery Dead, Jump Start Required
The Work of the Committee
I thank the committee for the work
it has done in relation to this inquiry. I also thank the secretariat for their background work in organising the committee
activities and assisting in preparing the report.
The compiled facts and
descriptions laid out in Chapters 1 through 5 of the Committee's report are
comprehensive, solid and most useful.
However the recommendations, as
they stand in Chapter 6, represent a lost opportunity to accelerate the uptake
of electric vehicles (EVs) in Australia and to exploit opportunities for
Australian industry in this growing worldwide market.
It is not as though the Government
is being asked to back a technology that ultimately may fail by way of uptake.
The car manufacturers themselves have backed the technology and are all moving
to supply electric vehicles into a growing market. Other countries are setting
solid targets in relation to EV take up. EVs are at the forefront of a major
transformation of the world’s transport sector. It’s not a question of if,
simply one of when.
That the Government and
alternative Government were not prepared to endorse a report containing affirmative
and, in many cases, costed policy approaches epitomises what is wrong about the
two major political parties in this country; they lack vision and conviction
when it matters most and are at best perfunctory in their approach to important
The Committee recommendations are
shallow and weak. While I support them, they must be broadened and
The Chair's Recommendations
The recommendations made by the
Chair in his additional comments go a long way to broadening and strengthening
the Committee's recommendations. To the extent that the Chair's recommendations
are not inconsistent with my recommendations below, they should also be
Benefits of electric vehicles and opportunities for Australia
As noted in Chapter 3 of the
report, there are considerable benefits associated with an increased uptake in
EVs. These benefits include:
GDP Improvements: If EVs made up
57 per cent of new car sales in 2030, there would be an increase in real GDP of
$2.9 billion, an increase in net employment of 13,400 jobs and additional
investment in charging infrastructure of $3.2 billion.
Productivity Improvement: On
account of EV's fuel economy and maintenance simplicity, there would be direct
fuel savings of $500 million and $100 million in maintenance costs for each one
million EVs in the national fleet.
Balance of Payment Advantages:
There is the potential for up to $15 billion dollars per annum in fuel import
replacement and benefit to the balance of payments, with $8 billion dollars
transferred to the local economy.
Fuel Security Advantages: Against
a backdrop of failed fuel security policy by successive governments, switching
the national fleet to EVs would substantially reduce Australia’s reliance on
imported oil, reducing vulnerabilities to potential supply disruption and
unexpected changes in demand from other customers in Asia.
Reduced Greenhouse Gas Emission:
Transport, in particular light vehicles, are the second largest source (19 per
cent) of greenhouse gas emissions in Australia. A national uptake of EVs would
greatly assist Australia in reaching, indeed exceeding, its Paris targets.
Noting all the benefits of EVs, and the current Government total paralysis on
actively dealing with electricity sector emissions, supporting the uptake of
EVs should have been a policy ‘no-brainer’ for the Coalition fighting climate
change deniers within the party.
Reduction in Air Pollutants: The
elimination of internal combustion engine (ICE) vehicle air pollutants such as
carbon dioxide, nitrogen oxides and particulate matter from the air has
significant public health advantages.
While there are some challenges
that come with the switch from ICE vehicles to EVs, these are all surmountable
if the recommendations of the Committee, coupled with the Chair's recommendations
(in his additional comments), were accepted. However, even more can and should
Manufacturing and Value Chain Activities
As identified in Chapter 4 of the
Report, there is substantial opportunity for Australia, leveraging off the considerable
ongoing and residual automotive industry skill and experience, to become
involved in the manufacturing of EVs and EV components in-country.
Ambition in this area should
extend to the manufacturing and assembly of complete EVs in addition to the
continuing and transitioning the OEM and after-market design and manufacturing
that resides in Australia.
One component area that deserves
special attention (and was discussed in the report) is the potential for
Australia to design, manufacture and export EV batteries.
Australia currently mines over 60
per cent of the world's lithium by value. We also have all of the other
minerals necessary to progress further down the lithium ion battery value
Australia has historically mined
all kinds of minerals and shipped them offshore to subsequently be turned into
product for importing back here as much more expensive product. In doing so it
has sold itself out and distorted our balance of trade.
large lithium reserves that have captured 60 per cent of a world
market hungry for lithium batteries, Australia has a chance to change
its mining modus operandi to great national benefit. With a plan and national
will, Australia could become an international lithium battery power
house – not just for EVs, but for batteries needed in consumer electronics,
power tools, robots, drones and home power banks.
There are five stages of
processing in the production of lithium batteries; mining and
concentrating (world market total in 2025 is projected to be US$12 billion),
refining and processing (US$41 billion), electro chemical processing (US$297
billion), cell production (US$424 billion) and battery assembly (US$1.3
trillion). We don't want to just dig and export; that's not where the money, or
A well-considered whole of
government approach to the industry could see Australia engaging in all five
stages with significant benefits to the Australian economy. Mining and
concentrating is in hand. We are currently transitioning into second stage
'refine and process' through Tianqi's recent investment at Kwinana in WA.
In relation to the latter stages
of processing, Australia has many of the reagents and input materials for the
second and third processing stages and, finally, there are already early stage
proposals to develop cell production facilities in Townsville and Darwin and
the SA Government has recently supported a battery manufacturing plant in
Adelaide as part of its Home Solar Panel Battery Scheme. A national lithium
battery endeavour could be supercharged through the production of EV batteries
Clearly support for manufacturing
of EVs and components, including and especially batteries, must come from
Government. Fortunately there is already money allocated by statute for
assisting Australia’s automotive industry in the form of an Automotive
Transformation Scheme (ATS). In the wake of the Abbott Government's foolish
decision to shut down the ICE automotive industry in Australia, that money has
not been fully spent.
Analysis undertaken by the Parliamentary
Budget Office for former Senator Nick Xenophon in 2016 outlined the capped
component of ATS funding allocated to the program, funding that has been spent,
estimated future spending and amounts of underspend.
This analysis shows that the ATS
underspend will be approximately $740 million.
This significant amount of money
could and should be utilised for EV manufacturing and value chain support. Such
a decision would very obviously be in Australia’s national interest.
The Government should utilise
the approximate $740 million of underspent and forecast underspend funding in
the ATS to jump start EV manufacturing and value chain support activities.
Proper EV Targets
As noted in the Committee report,
worldwide, in 2017, there has been a 57 per cent increase of new EV sales from
the previous year to 3.1 million electric passenger cars sold. More than half
of global sales of EVs were in China, where electric cars hold a market share
of 2.2 per cent.
The data from Australia is
sobering and demonstrates that substantially more needs to be done to
accelerate the uptake of EVs. Recent annual sales figures show that, of over a
million cars purchased in 2017, only a measly 2300 were battery-electric
vehicles or plug-in electric vehicles – about 0.2 per cent market share.
Australia's position is in stark
contrast to other countries. While Australia has geographical challenges not
faced by many European countries, the uptake of EVs through targets and the
eventual prohibition of the sale of new ICEs is a challenge that should be met
with tenacity and decisiveness; not put in the too hard basket.
China, Germany and the USA are
just three of the many countries that have targets for the uptake of EVs.
There are also more than a dozen
countries (including China, Germany and the US) that have announced they will
ban the sale of new ICE vehicles. Further, the Volkswagen Group has announced
that its next generation of ICEs, due in 2026, would be its last.
It's clear the world and manufacturers
are transitioning. This transition must be embraced by current and future
The most significant policy
decision the Government could pursue is prohibiting the import and sale of new
vehicles with ICEs. While a prohibition appears to be a dramatic position to
take, it has some key advantages.
Prohibiting the import and sale
of new vehicles with ICEs sends a clear message that Australia recognises that
the world is in transition and is embracing a future where EVs are commonplace.
A prohibition of ICEs, rather than setting targets for the uptake of EVs, is
the most effective way of addressing the risks and challenges associated with
the transition to EVs.
should legislate to prohibit the sale and import of new internal combustion
engines in motor vehicles by 2035.
Luddite Policies Must be Overcome
The Government must abandon its
Luddite approach to Australia's inevitable transition from ICE Vehicles to EVs.
The Government must accept and implement the Committee's, the Chair's and my
recommendations as a matter of urgency.
Senator Rex Patrick
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