Business fleets to drive our switch to electric cars

Businesses upgrading their fleet cars will be backed to create a second-hand electric vehicle market that cuts costs for motorists.

New modelling shows 26 per cent of all cars purchased by the end of the decade are expected to be electric. Picture: Stock image

Businesses will be backed to drive Australia’s transition to electric vehicles, with the Morrison government hoping regular fleet upgrades will create a second-hand market that cuts costs for motorists.

The government is preparing to pump millions of dollars into businesses willing to trial new vehicle technologies and install charging infrastructure for their staff.

In a discussion paper on its new future fuels strategy, to be released on Friday, it suggests that because commercial fleet vehicles are replaced more regularly, private motorists will be able to access cheaper second-hand electric cars.

But the government will not offer taxpayer-funded subsidies for individual electric vehicle purchases, arguing the “cost of ownership gap” — including upfront prices and maintenance and running costs — between petrol and electric cars remains too high, at up to $8000.

At the last election, Scott Morrison attacked Labor’s target for electric vehicles to make up half of all new car sales by 2030, arguing Bill Shorten wanted to “end the weekend”.

The government is now finalising its own strategy that “enables consumer choice, stimulates industry development and reduces emissions”.

New modelling shows 26 per cent of all cars purchased by the end of the decade are expected to be electric.

“A ‘fleets first’ approach is an effective pathway for early adoption, with businesses accounting for around 40 per cent of new light vehicle sales in 2020,” it said.

“This large proportion of sales will allow more Australians to be familiar with new technologies, increasing acceptance and uptake more widely. Bulk fleet purchasing could also drive vehicle makers to provide a wider range and more affordable new vehicle technology models to Australia.”

Under the plan, the government will also co-ordinate private and public investment in charging stations to increase consumer confidence in switching to electric vehicles.

And it aims to use its $1.3bn manufacturing fund to support onshore electric car design and component production, such as fast charging systems, high performance materials and battery cooling technologies.

Energy and Emissions Reduction Minister Angus Taylor said Australians were already switching to new vehicle technologies, with hybrid vehicle sales doubling in just 12 months to 60,417 last year.

“We are optimistic about how quickly the technology cost will reduce for other electric vehicles compared to traditional cars, making it an easier choice for consumers,” he said.

“Importantly, this discussion paper shows that closing this gap through subsides for new technology vehicles is not value-for-money for taxpayers and is an expensive form of abatement.”

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Originally published as Business fleets to drive our switch to electric cars