Consumers and car manufacturers worldwide are phasing out petrol vehicles at pace. Where do Australians stand in this global shift?
Australians are excited to get behind the EV wheel
Giles Parkinson, founder and editor – RenewEconomy and The Driven
I commonly hear that people have a petrol or diesel car and the next one they want to buy is electric. But they want one that suits them in price, utility and shape. The demand for electric is there – a lot of people want to switch.
There’s a lot to learn and a lot of misunderstandings about electric vehicles (EVs). Australia has trailed other countries in establishing charging infrastructure, but people are getting over that. Most people understand now that they can charge at home and that’s where up to 90% of charging is usually done. They are more comfortable with EVs. They see them around.
The fascinating thing about these new vehicles arriving on the market now is that they are so powerful. They’ve got big batteries; many can comfortably drive 450-500km. And they’ve got new features such as vehicle to load, so you can basically power any appliance that you want to take with you. People are starting to see these cars as more than just transport. They think about their car as a really interesting and useful asset.
If we can get all our ducks in a row, it will be quite a rapid transformation. Once the price of EVs comes down a bit further, as we get more supply and the cost of batteries comes down, it’s going to be a no-brainer for people to buy EVs. They are much more fun to drive, they’re cleaner, quieter and less expensive to run. And the other big factor, of course, is that most of the major car makers have vowed to stop making petrol and diesel cars.
Once you start driving an EV, I don’t think there’s any going back. The interest is there. It’s just huge. It’s all grown beyond our own expectations.
EVs offer enormous opportunities for the economy
Mathew Nelson, Oceania chief sustainability officer – EY
What’s necessary for us to achieve net zero is a general push to electrification across our economy. Obviously, EVs are critical to that.
Any transformation creates disruption, which creates opportunity. EY has recently done some analysis that tells us that in order for us to decarbonise, we need to electrify as an economy. To do this across all of Australia, we would need an electricity sector that’s potentially five times bigger than it is today. If you think about what that means in terms of opportunity, it’s enormous.
Overall, in terms of the economic opportunity, there is a risk mitigation factor – our export market is significantly exposed to greenhouse gas emissions and countries across the world are transitioning to electrification. If we don’t look at ways to replace those more traditional industries, it is going to affect our economy on the downside. Decarbonising our own economy is more of an economic reason than an environmental one.
My argument as to why we should be pushing in a rollout is not necessarily environmental – it’s actually economic. If we don’t really think about how we play these things, and build these economies, then we will find ourselves losing on every front as this transformation occurs.
EV uptake is inevitable but there is more to be done
Ingrid Burfurd, senior associate – Grattan Institute’s Transport and Cities Program
Australia has committed to net zero carbon emissions by 2050. I can’t see a path forward that doesn’t involve a transition to EVs. Despite early concerns, Australians are ready for this transition.
Driving an EV is better than the alternative. We would see, through time, a reduction in the carbon emissions that cars emit, and the airborne pollutants as well. We have to remember cars spit out nitrogen oxides and particulate matter, and that they’re very bad for people’s health, particularly in cities, where airborne pollution settles and aggregates and where there’s a high population of people who breathe it in. So we would also expect to see environmental and health benefits driven by a shift from internal combustion cars to EVs.
To meet the goal of net-zero by 2050 The Grattan Institute recommends a ‘carbon ceiling’, or emissions standard, for new vehicle sales. A ceiling requires manufacturers to meet emission targets across the mix of vehicles that they sell every year, measured in grams of carbon per kilometre. That annual target needs to be ratcheted down through time. Cars are on the road for about 15 years, which means that the cars that we sell in 2035 need to be almost exclusively zero-emission.
Australia is actually very well positioned to use EVs for day-to-day driving. About 90% of households that drive are in houses that are well set up to charge EVs. People are understandably worried about longer trips, but there’s good news there, too, because the network of publicly accessible chargers has expanded dramatically.
Consumer interest and enthusiasm is great, and it reflects the many advantages that EVs have. Every new survey demonstrates a higher level of interest in EVs and, at the same time, decreased resistance to the shift from internal combustion. Those two things are slightly different, but they move us in the same direction. We’re more ready than we’ve been at any other point for that transition.
Australia’s EV market can grow rapidly
Peter Durante, head of technology and innovation – Macquarie Asset Management
From our perspective, we look at the Australian market as nascent, but set to expand very rapidly as the cost of EVs comes down, the model availability goes up, and auto companies and energy companies build up this experience around the rest of the world.
From a pure sales perspective, the passenger market in Australia is ripe for EVs. Australia has drivers for EVs that many other markets have: oil import dependency; an abundance of domestic electricity production capability, both fossil fuel and clean energy; air, noise and water pollution; and greenhouse gases.
If 100% of passenger vehicles were electric, you wouldn’t have massive multiples of power generation – you would need somewhere between 20% and 30% more terawatt hours of electricity, and commensurately a massive reduction in oil. That’s encouraging for a lot of power companies and renewable power developers that see EVs as a growth industry for clean electricity.
A 100% electric vehicle future also means batteries are cheaper, and if batteries are cheaper, by definition, you’re going to be able to have three to four to five times as much renewable power generation capacity.
The positive feedback loop is a concept we talk about a lot. You have all these different drivers for governments to support the deployment of EVs: energy issues, balance of payments, industrial strategy, and so on. And as they support the deployment of vehicles that creates demand, with demand comes supply. As supply scales up, the costs come down. And as costs come down, demand goes up.
Market forces are such now that getting to that 100% in a market like Australia is far from science fiction. Economically it’s starting to look not just possible, but compelling.
Find out how Macquarie can help you transition to an electric vehicle.
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