Electric car plans spark showdown

Josh Frydenberg has stared down opposition from the Coalition backbench over backing for the electric car industry.

Minister for Energy Josh Frydenberg.

Energy Minister Josh Frydenberg has stared down opposition from the Coalition backbench over government support to the electric car industry, declaring the government would continue to support the “very exciting” sector.

Mr Frydenberg restated his claim that electric cars could be to the transport sector “what the iPhone has been to the communication sector” despite claims from his colleagues they produce more carbon emissions than normal cars.

“This is a very exciting space, we are living in the decade of disruption, there is global momentum around electric vehicles and I think they will be to the transport sector what the iPhone has been to the communication sector,” Mr Fyrdenberg told ABC radio.

The Australian reported this morning Liberal MP Craig Kelly, backed by Nationals MPs Andrew Broad and John Williams, would raise government support for electric cars at the next partyroom meeting and argue there should be no further subsidies given to the sector.

Mr Frydenberg this morning said the government would continue to support the industry.

“But what we will need to see is some of the infrastructure issues solved because when people come to make a decision about the vehicle they purchase they want to make sure that if they do purchase an electric vehicle that they can plug it in when they go on a long road trip and the infrastructure is consistent throughout the country,” he said.

“So there are some logistical issues that we will cooperate closely with state and local governments on to ensure more reliability and connectivity in the grid.”

The Energy Minister is facing a partyroom showdown over his support for electric ­vehicles in Australia, amid industry calls for $7000 tax breaks and concerns the vehicles could have a bigger carbon footprint than ­internal combustion vehicles.

Mr Frydenberg came under ­attack from conservative colleagues yesterday after predicting the number of electric vehicles would grow from 4000 to 230,000 within seven years, and to one million by 2030.

He also foreshadowed more support for the electric vehicle ­industry, working towards “better co-ordination of existing and ­future activities to support low emissions vehicles”.

Mr Frydenberg’s comments sparked a backlash from several Coalition backbenchers who warned against new tax breaks for electric cars, arguing that they were no greener than equivalent petrol or diesel vehicles.

The issue now threatens to reignite last year’s debate within the government over clean ­energy targets and the role of coal in Australia’s energy future.

Craig Kelly, who chairs the Coalition’s environment and energy committee, said he would raise the issue in the party­room after parliament resumed next month.

Mr Kelly warned that the government would have to develop a ­policy on electric vehicles before the next election, and the ­Coalition should resist calls to support the industry.

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Electric cars made up less than 0.1 per cent of last year’s car sales, and can cost tens of thousands of dollars more than an equivalent internal combustion vehicle.

Electric Vehicle Council chief executive Behyad Jafari called for a package of measures to reduce electric vehicle prices by up to $7000, including fringe benefits and luxury car tax exemptions, and the axing of stamp duty and registration charges by the states.

“We need in Australia a ­nationally co-ordinated plan to support the transition from internal combustion vehicles to electric vehicles,” he said.

Opponents say the environmental benefits of electric cars are overstated, given Australia’s energy mix.

A study for the Department of Infrastructure and Regional ­Dev­elop­ment more than a year ago found the high reliance on coal-fired power in Victoria, NSW and Queensland meant electric vehicles charged on the grid in those states “have a higher CO2 output than those emitted from the tailpipes of comparative petrol cars”.

“We need to be very careful that any subsidies or concessions we give to electric cars in Australia will not increase CO2 emissions rather than decrease them,’’ Mr Kelly said.

“The risk here is you’ll have the rich person in Balmain buying a Tesla, subsidised by a bloke in Penrith who’s driving a Corolla.

“And the Tesla will have more carbon emissions than the Corolla.”

Support for electric vehicles is currently modest in Australia compared with nations such as France, Britain and Norway, where consumers can receive ­rebates of up to $15,000.

Buyers in Australia benefit from a higher threshold before they pay the 33 per cent luxury car tax ($75,526 against $65,094 for other vehicles).

Some states and territories offer discounts on stamp duty and registration.

Owners of EVs also avoid the 40c/litre fuel excise, which pays for the nation’s roads, alarming transport planners.

Mr Frydenberg indicated new concessions could be introduced in time to support what he says will be a transport “revolution”.

“The Turnbull government looks forward to continuing to work with all state and territory governments, along with consumer groups and industry, on better co-ordination of existing and future activities to support low emissions vehicles,” he said.

The minister said the carbon footprint of electric vehicles in Australia would improve as more renewable energy sources came on line.

Australia committed at the Paris climate change conference to reducing its carbon emissions by 26 to 28 per cent on 2005 levels by 2030. The transport sector ­accounts for about 18 per of Australia’s emissions.

The government is considering how to reduce the carbon intensity of passenger vehicles through the Ministerial Forum on Vehicle Emissions, but the forum, which was convened in 2015, is yet to release its recommendations.

Mr Broad, who was a fierce ­opponent of the Clean Energy Target and moves away from ­reliable baseload energy, said the jury was still out on whether electric vehicles, hybrids, or some other technology — such as ­hydrogen — would emerge as the best way to lower transport ­emissions.

“Historically, governments always get it wrong when they try to pick winners,” the Victorian ­Nationals MP said.

Senator Williams said electric vehicles should have to “stand on their own two feet”.

The NSW Nationals senator also cautioned against European-style measures to take petrol and diesel cars off the road.

“What’s the farmer supposed to do? Stand around all day charging their vehicle?” he said.

Labor energy and climate change spokesman Mark Butler said the government must “take their own advice and finally adopt vehicle emission standards for Australia”.

“Vehicle emissions standards would boost the supply and ­demand for electric vehicles.

“Australia is the only advanced country without such standards in place,” Mr Butler said.

“The government has sat on advice about the need for vehicle emissions standards for over three years, and they still haven’t committed to implementing ­standards.”

Flagging an election showdown on the issue, Mr Butler said Labor would soon announce a ­detailed policy to cut carbon pollution from transport.

“Ultimately, to achieve the greatest pollution cuts from ­moving to (electric vehicle), we need to transition our energy system to low pollution sources like renewables.”

Greens transport spokes­woman Janet Rice said the government should help make electric vehicles more affordable in the short term until they ­became competitive with petrol or diesel cars.

But it was crucial that they ran on renewable power to ensure they reduced the transport sector’s carbon footprint, she said.

“If Josh Frydenberg is as enthusiastic about electric vehicles as he claims to be, he should be maximising their potential by forcibly retiring coal-fired power stations and replacing them with clean, reliable and cheap renewable energy,” she said.

Petrol and diesel SUVs overtook passenger vehicles last year as Australians’ cars of choice, hitting more than 465,000 in sales.

The car industry said if the government wanted to counter this trend and increase the number of electric vehicles on the road, it would need to make them more attractive to consumers.

“There is a cost differential at the moment that is quite considerable,” Federal Chamber of Automotive Industries chief executive Tony Weber said.

Australian Automobile Association chief executive Michael Bradley said sales would be largely influenced by the rollout of charging infrastructure, improvement in battery technology and ­financial incentives to consumers.