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Analysis of ALP’s EV related 2019 election promises

In the run-up to a federal election mid-year, the ALP have announced a range of policies to spur adoption of EVs in Australia – if they win the election. Let’s go through the announcement (page 9 in this PDF) and try rinse the political spin off their ideas.

These EV policies are part of an overall climate change policy. The aim of these policies isn’t to give us all fancy new cars, but to reduce the amount of CO2 and other toxic chemicals in the atmosphere as a result of burning fossil fuels. Australia has the worst overall fleet emissions in the OECD and light vehicle emissions count for roughly 10.5% of Australia’s overall CO2 emissions. Reducing emissions from vehicles is a crucial step in reducing the country’s overall CO2 footprint, let alone all the other benefits EVs bring.

National EV target of 50 per cent new car sales by 2030
Labor’s national EV target will send a strong signal to car makers to ship a greater range of more affordable EVs to the relatively small Australian market. It will reduce the cost of EVs, create thousands of jobs and substantially cut pollution.

The headline policy is probably the least influential in getting EVs on the road. A “target” like this has no hard enforcement. It’s not as if the government will start fining people or businesses if the 50% target isn’t met. It’s merely a government’s vision statement and is designed to give car makers a bit of confidence that if they bring EVs here, the government isn’t going to screw them over with anti-EV policies.

Government EV target of 50 per cent of new purchases and leases of passenger motor vehicles by 2025
A Shorten Labor Government will be a leader in the transition to EVs. This government fleet target will send a strong signal that we expect cost competitive vehicles to be available for fleet purchases and leases. Government EV fleets will also be important in developing a second hand market. Labor will work towards requiring all Commonwealth owned and leased office buildings to include the provision of charging infrastructure where appropriate.

Unlike the national target, a government target can be enforced. The federal government buys thousands of cars a year and there’s selection criteria for cars that will be considered for purchase. By setting a target of 50% of government cars to be EVs, the bean counters that buy cars for government departments will be required to buy a certain amount of EVs, which means car manufacturers will bring them to Australia as they know there’s a captive market (the government) to sell to.

This will also flow on to new car sales (they’re selling to government anyways, may as well sell to other fleets and private owners), as well as used car sales in 2-3 years time when the government turns over their fleet.

Growing private EV fleets
The Australian Investment Guarantee will allow businesses to immediately deduct 20 per cent off any new EV valued at more than $20,000.

This is an existing policy announcement from the ALP, applied to EVs. The Australian Investment Guarantee is a 20% tax deduction for businesses on any “assets that lower energy use and improve energy efficiency” that are worth over $20,000. So if you buy an EV worth $60,000 for your business, 20% of that ($12,000) can be claimed as a tax deduction. If your tax bill for the year is $25,000 for example, a $12,000 tax deduction reduces that to $13,000. Not bad! Shame it’s only for businesses though, and not like the USA’s $7,500 tax credit.

Regulatory reforms and COAG agenda
Labor will require all federally funded road upgrades to incorporate EV charging infrastructure, work with states to ensure new and refurbished commercial and residential developments include EV charging capacity, promote national standards for EV charging infrastructure and ensure investment in public charging stations meet these standards. Labor will establish an EV COAG agenda to improve coordination of EV take-up and related infrastructure planning.

Requiring federally funded road upgrades to include EV infrastructure is interesting. Does this mean, for example, if a section of highway is expanded with federal money, that an EV charging point will be mandatory? States and local councils have control over planning schedules, so if the federal government can lean on them to mandate charging infrastructure in certain developments (e.g: mutli-dwelling units, office blocks & new shopping centers), it’ll be a big help.

The states could do this stuff tomorrow, regardless if the ALP get elected though. We already have a charging standard in Australia (Type 2 & CCS2), but if it can be put into the Australian Design Rules (which is a federal thing), that’ll go a long way to making sure every car entering Australia has the same plugs going forward.

EV Innovation and Manufacturing Strategy
Labor will work with Industry, State Governments and the Research sector to implement an EV innovation and manufacturing strategy. The strategy will support the establishment of manufacturing, assembly and retrofitting capability in EV vehicles, transportation and supporting infrastructure and services.

Yep, cool. Companies like Tritium and SEA Electric would love this. Of course, we need way more details in order to determine if they’re effective. It’s hard to argue against investment in local manufacturing jobs though!

Introduction of vehicle emission standards
Labor will introduce vehicle emissions standards to reduce pollution and make the cost of driving a car cheaper for consumers. Labor will aim to deliver standards in line with 105g CO2/km for light vehicles, consistent with the US standards and Climate Change Authority advice, but will consult on the phase-in timeline and coverage to maximise savings for motorists. Standards will be applied to car retailers to meet average emissions standards, rather than imposing blanket mandatory standards on manufacturers. This will allow retailers to meet the standards by offsetting high emissions car sales with low or zero emissions car sales.

In my opinion, this is the silver bullet to really get more EVs on our roads. Australa’s light vehicle fleet emissions suck and are some of the worst in the developed world. By mandating 105g CO2/km, it will turn us into a world leader instead of a laggard.

I’m going to assume the 105g CO2/km figure applies to a car dealership’s quarterly or annual sales. So for example, a dealership will still sell SUVs and utes that output 180-200g of CO2/km, but will need to sell more hybrids and EVs in order to bring the average of all the cars they’ve sold down below 105g of CO2/km.

This will then force manufacturers to bring EVs to Australia so their dealers can meet the fleet targets. There’s no mention of the incentives or punishments for not meeting the regulations. Hopefully they’re strict enough to make sure the auto industry complies.

These types of targets have been used in Europe and the USA (particularly in California) to force manufacturers to sell low emissions vehicles, or they’ll be fined. It’s a major reason why Volkswagen are going full steam ahead with battery electric vehicles.

What’s unique here is that the ALP will be placing the onus on car dealers, not manufacturers, to meet fleet emissions standards. I guess the ALP thinks simply offering the cars for sale isn’t enough – they actually need to put effort into selling them – a common complaint from prospective EV buyers in the USA.

To support this target, Labor will invest $100 million in the rollout of charging stations as across the country. This will be in the form of a grant program to match industry as well as state and local government proposals – building up to $200 million fund in total – to deliver around 200 fast charging stations.

https://www.dropbox.com/s/ihmhocso971imrg/091W1765.PDF?dl=0

This announcement has gone un-reported for some reason, but it was sent as a press release and announced at a press conference on the same day as the other EV policies. It isn’t included in the ALP’s climate policy document however. Smells a bit like on-the-run planning, but it’s exactly what EV owners have been asking for. 200 rapid chargers across the Australia. $200m of funding (a mix of federal, state and local) will ensure chargers are placed in areas that may not be commercially viable.

Overall, the ALP’s plans for EVs are solid. It’s what Australian EV enthusiasts have been crying out for and it’s a solid step in reducing our country’s carbon footprint. There’s plenty of other things I think a government could do to spur on EVs in Australia, but I’ll save that for another article. Compared to the Liberal party’s total lack of any EV planning, it’s clear that if you care about EVs and the impact transport has on our environment, the ALP have that policy area covered – if they win the federal election.

Anthony also produces The Sizzle - a daily email newsletter covering all aspects of technology with an Australian point of view.

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