Freedom to choose is the right plan for electric cars

The Morrison government has stuck to its principles on free choice and technology first, and has ruled out banning petrol and diesel cars or using big subsidies to encourage motorists to make the switch to electric vehicles. Carmakers are disappointed and the federal opposition says Australia risks being left behind in the global transition to low-emissions vehicles.

But the government insists it is not anti-electric cars. It expects there will be 1.7 million low- and zero-emissions cars on the nation’s roads by 2030 as prices come down and choice expands. This means 30 per cent of car sales will be electric or plug-in hybrid by the end of the decade. The government is banking on advances in battery technology reducing the cost of electric vehicles to be equivalent with existing cars, something that is expected to happen by about 2025. But it also is setting up an election fight on the rights of Australians to stick with the big-engine dual-cab utes and SUVs that currently dominate the list of bestsellers. Scott Morrison fought the 2019 election claiming Labor’s plans to go electric would put an end to the Aussie long weekend.

Industry, Energy and Emissions Reduction Minister Angus Taylor has made it clear that freedom of choice will continue to be the default position for government when it comes to consumers. Recognising that low-emissions vehicles are the way the global industry is moving, however, the government priority is to ensure the infrastructure needed to protect the electricity grid and make recharging possible is in place. It also must find a way to replace the billions of dollars that will be lost in fuel excise. Under the Future Fuels plan, rather than using taxpayer funds to make electric vehicles cheaper for those who want to buy them, the federal government will partner with industry to roll out charging infrastructure for battery-powered and hydrogen fuel cell vehicles.

With Australia already heavily invested in creating a world-scale hydrogen industry, it makes sense to keep our options open when it comes to transforming the nation’s vehicle fleet. Hydrogen fuel cell vehicles have many benefits over battery-powered cars, including shorter refuelling times and a greater range. They also purify the air as they drive, helping to remove harmful particulates produced by petrol and diesel vehicles. It is significant that the Prime Minister used a Toyota hydrogen refuelling facility to launch the federal government’s green car plan. By refusing to pick a winner on the future of personal transport, Mr Morrison has disappointed the electric vehicle industry, which had wanted the federal government to adopt policies similar to those used overseas. These include tax and levy exemptions that can be worth tens of thousands of dollars per vehicle and tougher emissions targets to effectively force carmakers to prioritise electric vehicles over popular SUVs in a bid to lower the average emissions of cars sold.

But the government has decided that reducing the total cost of ownership of electric vehicles through subsidies would not represent value for the taxpayer. This was particularly so given that industry rapidly was working through technological developments to make battery-powered electric vehicles cheaper. There is also a range of incentives already offered by state governments to encourage the take-up and use of low-emissions cars.

Anthony Albanese has said the ALP will exempt electric vehicles from import tariffs and fringe benefits tax for employers. The Morrison government will ask the Australian Taxation Office to investigate issuing updated guidance for businesses on the tax treatment of low-emissions vehicles to provide clarity for fleet purchasing.

Encouraging the use of new technologies to enhance mobility and improve air quality is a worthwhile objective for government. If refuelled using renewable sources of energy such as wind or solar, a switch to electric vehicles can contribute to the nation’s decarbonisation effort. But, given that most of Australia’s electricity supply will continue to come from fossil fuel sources for years to come, adding high numbers of electric vehicles now will not make much difference.

The real issue is a stand-off that exists with carmakers, which are not yet providing the range of features or number of low-priced models to the Australian market. It is fair to assume electric vehicles will suit many but not all Australian motorists. Building confidence that infrastructure exists for electric vehicles to be refuelled easily and quickly is the first hurdle. In the end, it is up to carmakers to deliver the sort of vehicles that consumers want to drive at the price they are willing to pay.