5 Ways the Electric Vehicle Industry Is Expanding in Australia

Electric Vehicles are growing more than ever before.

 

In fact, since 2018, electric vehicles (EV) have grown from 3.4 million to 5.6 million worldwide. That’s a whopping 64% increase in the total number of EVs.

Let’s look at a few interesting figures on the state of EV in the global market:

– China sold nearly 1.18 million plug-in electric cars in 2019.

– In Germany, electric vehicle sales tripled in 2020.

– Electric cars have a 54% smaller carbon footprint compared to their counterparts.

– Norway is the biggest EV seller market in Europe.

 

In 2019 Australia’s EV sales accounted for 1% of annual car sales, a significant increase from 2,216 to 6,718 compared to 2018.

The biggest year for Australia’s EV market. Despite this hike, Australia is lagging behind the rest of the countries when it comes to EV model range availability, industry development, government support and most importantly, consumer awareness.

From being cheaper to run, maintain and register – there are many advantages to electric cars, but the reason we need to see them grow on a steeper level in Australia is that they are great for the environment.

Electric vehicles play a crucial role in delivering commitments under the Paris agreement to reduce greenhouse emissions.

So, how is the future of electric vehicles looking for Australia?

 

1. Sales are increasing exponentially

Despite the pandemic, the Australian market has shown an upward turn with 3,226 EVs sold in the first half of 2020. Electric vehicles accounted for 0.6% of new vehicles.

And now in 2021, electric vehicles are likely to increase by another 50%. The steady introduction to new models and the curious interest in consumer is likely to grow more market share in Australia.

According to available data – which excludes Tesla sales – private purchases accounted for 51% of electric vehicle sales in 2019 compared to 37% in 2018. However, the percentage of EV sales represented in Australia is only 0.6%.

Breaking it down per state and mentioning only the top two states, ACT leads the uptake market, having sold 83% of EV purchased for every 10,000 sales, followed by SA with 61%.

 

2. Higher consumer interest in EVs

A recent survey suggested that 56% of consumers would consider purchasing an electric car as their next car purchase.

More and more Australians continue to warm towards electric vehicles, and this might be the reason why carmakers remain optimistic about growing sales for electric vehicles in 2021.

The advantages of electric vehicles such as the reduced environmental footprint or low cost running are primary reasons for consumers’ interest. In comparison, there are equal or more discouraging factors that were expressed by the potential consumers such as:

– High purchase cost of electric vehicles

– Limited range of electrical vehicles

– Driving range per charge compared to fuel tank

– Accessibility to charging equipment

When the consumers were asked how far they expected fully electric vehicles to drive per charge, and almost 80% of respondents underestimated the range of EVs currently available in Australia. In fact, most of the current models available in Australia can drive up to 400km but new existing models can drive up to 600km.

 

3. Increase in charging infrastructure

One of the key reasons why EV adoption hasn’t expanded in Australia as much as in Europe, is due to the infrastructure. Many potential consumers are hesitant to purchase an EV because of its limited charging stations.

Since 2018, Australia has seen an increase in charging stations over the past couple of years. As of now, there are approximately 1,950 charging stations  (less than 50kW) at over 1,200 locations. A modest increase of 16% since July 2019.

Australia has also placed 350 fast and ultra-fast charging stations (50kW and over) at over 150 locations, representing a 42% increase since July 2019. Despite this increase, this number of charging stations is barely sufficient to cater to a larger group of consumers.

The more charging points, the more robust the Australian charging infrastructure will be. This would demonstrate to car manufacturers that Australia is physically ready for electric vehicles.

 

4. Variety of Electric vehicle models

With over 28 electric vehicle models available from 11 different carmakers, Australian consumers now have more electric vehicles to choose from than ever before. 8 of these electric vehicles cost under $65,000 and 6 range of models are expected to be launched in Australia by next year.

Some of the newer collections of models are priced below $50,000. Compared to Europe and other countries, the variety of models are significantly fewer in Australia, including other right-hand drive markets.

In comparison, consumers in the United Kingdom have 130 electric vehicles to choose from.

Similar to the US, Europe and China, the government needs to introduce a range of policies to encourage the supply of more electric vehicles to Australia.

Currently, the federal government is working on an electric vehicle policy that will focus on the infrastructure of charging stations and support research and development of new technology.

Furthermore, the government has also included electric vehicles in net zero emissions strategies. Until these policies begin to rollout, Australia is going to be denied access to the full global range of electric vehicles.

 

5. Stronger EV policies

The Majority of vehicle buyers have expressed their concerns over the high cost of purchasing, battery charging infrastructure, lack of awareness and the cost of installing home charging. Hence, the Government is expected to prioritise policies to encourage electric vehicles.

In order to encourage EV purchase, future-proofing cities and homes with better infrastructure are paramount. Countries with government policies that encourage or mandate emissions reductions from vehicles are the markets that are seeing success at attracting electric vehicles.

These policies focus on:

– emissions reductions targets,

– fuel efficiency standards

– average OEM fleet emissions regulations.

 

For advancing electric vehicle policies in Australia, NSW has made the most progress over the last year, bringing it more in line with the same level as ACT and Queensland Governments.

NSW recently announced commitments to further invest in public charging networks, provide co-funding for fleets to transition to electric vehicles, and electrify Sydney’s bus fleet.

Other states such as Victoria, South Australia, Western Australia, and the Northern Territory are all planning a strategic approach to push for electric vehicle expansion this year. strategies coming out this year, so we expect these states to start implementing more electric vehicle policies over the next 12 months.

The Federal Government was due to release an electric vehicle strategy in mid-2020 but has not. There is an expectation to have a final strategy released in the second semester of 2021.

According to Electric Vehicle Council, government needs to focus on setting up policies for:

  • Setting an electric vehicle sales or fleet target
  • Investing in public charging networks
  • Developing and implementing a national electric vehicle strategy
  • Providing electric vehicle purchase incentives and subsidising home charging installations
  • Providing tax incentives for electric vehicle owners
  • Public awareness initiatives
  • Setting electric vehicle targets for government fleets
  • Transitioning to electric bus fleets
  • Mandating electric vehicle readiness requirements for new buildings
  • Developing electric vehicle industry development strategies and incentives

 

It’s not all bad news. Australia is likely to see more policies in favour of EVs to help increase consumer awareness, electric vehicle sales and charging infrastructure. It’s evident that the number of EV users and sales have increased in the past year, and with the government support, Australia is likely to meet its target of reducing carbon emissions significantly by 2050.

The Federal Vehicle strategy in 2021 will unfold what to expect in the growth of the electric vehicle industry in near future.

 

Anávo works with organisations and individuals that are igniting change in the world. If you are looking to build a team of experts within Australia, get in touch!

 

About the Author:

With a Master in Coaching Psychology & HR, Andrea's utilises her skills to match top talent with businesses making a difference.

Read more about Andrea Sanz Rodriguez.

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