Australian consumers are right to be confused as the global car industry is at odds with itself this week in the wake of the new vehicle efficiency standard (NVES) proposed by the federal government.
Australia has not updated its standards since 2009 and this one will bring Australia into line with 85% of the rest of the world. The standard essentially works as a limit on the average annual carbon emissions the cars sold by each car manufacturer can emit. If they meet the standard, they receive credits and, if they don’t, they receive penalties unless they buy credits.
Due to transport emissions, it’s estimated that 11,000 people are dying early each year in Australia, with almost twice this number ending up in hospital with heart and lung issues.
Nationally, transport is now the third largest source of carbon emissions, which are a key driver behind the changing climate and the increasing frequency and intensity of extreme weather events. Australia has been identified as one of the countries most at risk from the worst effects of the changing climate. Emissions from transport have been rising steadily over decades and transport is set to overtake power generation as the biggest source as that sector accelerates its decarbonisation with renewables.
The Federal Chamber of Automotive Industries (FCAI) is the peak body representing manufacturers of passenger, light commercial vehicles and motorbikes. It commissioned modelling that says that the new standards will cost consumers up to $15,000 more for the larger, heavier, more polluting models.
While the FCAI represents the car manufacturing industry (although there is clearly a split in what they should be advocating for), consumer groups are more forthright on who they think EVs will benefit.
Motorist and road user advocacy group the AAA is a supporter of EVs and has been for a decade. Its constituent clubs (such as the NRMA and RAA) are emerging as innovative leaders for helping their members on this journey. The NRMA’s website states that it supports EVs because they “reduce noxious emissions, meaning healthier and greener communities … cost less to run …[and] mean increasing our fuel security by focusing our efforts to produce the energy to power EVs right here in Australia …”
Energy Consumers Australia, which represents residential and small business energy consumers nationally, stated in its submission to the federal government’s consultation on a national EV strategy that it supports policy that leads to increased EV adoption with benefits to EV owners as well as all energy consumers. It points to its own recent modelling which shows consumers on average can be several hundred dollars better off a year with EVs and some households could be over $1,400 better off.
EVs are still relatively early in their development and prices remain high, with many models being launched in premium brackets with a lack of affordable options in most markets outside China. The EV sector is highly dynamic and the industry is still young on a global scale. No one really knows how the market will evolve in terms of future prices, dominant technology, identity of the market leaders or who of the incumbent carmakers will survive.
Instead of swimming against the tide, Australia can seek to embrace some of the things that give us a competitive edge due to our unique geography, climate and economy. Some of the best wind and solar resources in the world means we can rely less on imported fuels through charging EVs with locally generated electricity, avoiding price shocks caused by geopolitical events on the other side of the world.
With abundant minerals and a mining sector that can produce much of the resources that are needed to make an electric vehicle, Australia has much to benefit from in the global growth in transport electrification.
Given the multitude of different voices on the NVES, even within the car industry itself, it is hard for Australian consumers to know who to believe. But Australian consumers shouldn’t be scared or blackmailed into rejecting good policy that will benefit society and public health, and support our economy in the midst of transitioning energy and transport systems. The new vehicle efficiency standard will encourage carmakers to bring a growing number of efficient models into the country and increase choice for consumers.
The availability of low-cost electric vehicles, especially ones that can benefit all those who rely on transport, is needed in a modern economy. This means not just electrifying passenger vehicles but also bikes, buses, delivery vehicles, ride shares and taxis. This will be needed if the electrification of transport is really to be equitable and fair.
Policy such as the NVES doesn’t exist in a vacuum and a range of other economic, social and technology measures will be needed as part of a strong partnership between our best minds from industry, government, communities and academia to ensure the transition to a cleaner mode of transport doesn’t leave anyone behind.
Dr Scott Dwyer is research director at the Institute for Sustainable Futures, University of Technology Sydney
