Bowen speeding up a blind alley with electric vehicles

The Albanese government’s green agenda to cut greenhouse gas emissions by 43 per cent by 2030 is in tatters as motorists switch to electric vehicles at less than a third of the rate Labor predicted before last year’s federal election.

During the campaign, Labor forecast that nearly 90 per cent of new cars bought in Australia would be electric by the end of this decade. During an estimates hearing last month, officials from the Department of Infrastructure, Transport, Regional Development, Communications and the Arts revealed their latest forecasts found electric vehicles were on track to make up only 27 per cent of new vehicle sales by 2030. The shortfall between what was predicted pre-election and what is happening on the shop floor of car dealers has cast doubt on Labor’s modelling that underpinned its green and emissions reduction agenda, as Jess Malcolm and Greg Brown report on Tuesday. That slower-than-expected uptake has occurred as prices at the petrol pump have risen sharply.

Car aficionados and those who closely follow the politics of climate change will not be surprised. A similar pattern has emerged overseas, including in the US, where surveys show that between a third and half of EV owners invest in cars with internal combustion engines when buying subsequent vehicles. In September, British Prime Minister Rishi Sunak drew the wrath of climate campaigners when he announced a five-year delay of the previously announced ban on the sale of new petrol and diesel-powered cars from 2030 to 2035.

What is highly embarrassing for the Albanese government is that economic agency RepuTex – which modelled Labor’s $24bn Powering Australia plan for last year’s federal election – has revealed the government workshopped its policies to get to an emissions target that was politically saleable. The modelling also underpinned other Labor policies, such as 82 per cent of electricity to come from renewable sources by 2030 and a promise to cut power bills by $275 – in many households, bills have risen by at least that amount.

In opposition, Anthony Albanese claimed the plan would create 604,000 jobs as well as cut the price of a $70,000 electric vehicle by $12,000. Models that work on paper, however, do not necessarily appeal to customers in the real world, many of whom remain wary about the ability of EVs to cover the distances they need and the availability of chargers. Batteries in EVs also have emerged as a problem. EV batteries can be compromised in even minor vehicle accidents and that is when they become dangerous in terms of fire risk. Repairers say fixing batteries is extremely difficult and insurers are tending to write off even new cars if there is even slight damage to the battery, as Chris Mitchell wrote in his Media column last month. The problem is driving soaring car insurance premiums in Britain, where both left and right-leaning newspapers have reported that EV insurance premiums are set to rise by as much as 1000 per cent.

Climate Change and Energy Minister Chris Bowen is sticking to his political guns on EVs and a spokesman told The Australian on Monday that Labor’s electric vehicle strategy was “off to a flying start” with EVs jumping from 2 per cent of new car sales in May last year to almost 9 per cent. By the end of the year the government is expected to introduce fuel efficiency standards that impose a pollution cap on the average emissions from a fleet of cars sold by a manufacturer to encourage them to sell more EVs. It remains to be seen, however, whether such a cap encourages more consumers to buy.