EVs get backing in Labor’s federal budget

The 2023 federal budget has been a landmark win for electric vehicle industry in Australia, but lobbyists say there is more to be done.

Stephen Corby

3 min read

12:00PMMay 25, 2023.

Updated 2:47PMMay 25, 2023

The BYD Dolphin is expected to cost less than $40,000.

After years of struggling for financial assistance, or even acknowledgment of their existence, lobbyists for the electric vehicle industry in Australia say the 2023 federal budget was a watershed moment – but there is still plenty more that needs to be done.

The budget came hot on the heels of another long-awaited regulatory moment for EVs, with the news that Australia will finally join most of the developed world by introducing fuel-efficiency standards.

The legislation for those standards, and the specific detail on how they would work, was not included in the budget papers, although the government is looking to implement the legislation before the end of this year.

What was included was a spending figure of $7.4m to be put towards the introduction of fuel-efficiency standards, which the government says will “ensure consumers have a better choice of electric vehicles and encourage greater use of cleaner, cheaper-to-run vehicles”.

Viewed by many as the missing link in Australia’s automotive policy, experts say legislated efficiency standards would essentially force global car giants to prioritise production of low- and zero-emission vehicles for our market, or risk missing range-wide efficiency targets, and face fiscal penalties.

“The most common thing coming from our automotive members is that every electric vehicle they can bring to Australia quickly sells out, which is partly because the number of vehicles we’re getting is far fewer than those being sent to countries where efficiency standards are in place,” says Behyad Jafari, chief executive of Australia’s Electric Vehicle Council.

“Their message is that other countries are being prioritised because they have to meet legislated standards, unlike here in Australia. And that means fewer EVs for Australia, fewer affordable electric vehicles, and vehicles that aren’t launched in Australia at all, or that are brought here years later.

“Efficiency standards address that, and mean there’s a business case for car companies to prioritise Australia when it comes to electric vehicles.”

In total the budget included $20.8m towards greening transport, including $7.8m for a Transport and Infrastructure Net Zero Roadmap and Action Plan, and $5.2m over four years for charging infrastructure in housing and public spaces.

Minister for Climate Change and Energy, Chris Bowen. Picture: NCA Newswire / Gaye Gerard

Another $14.8m was allocated over four years to establish the Powering Australia Industry Growth Centre, the job of which is to work on advanced technology and skills as part of the Australian Made Battery Plan.

A far bigger spending figure is the $2bn the government has pledged to spend on making this country a leader in hydrogen generation. Hydrogen has long been pushed as an alternative, zero-emission fuel source for running all kinds of transport, but it has lagged behind electrification, largely due to the expense of implementing hydrogen infrastructure.

While not as widely discussed as a future transport solution, several big companies – Toyota and Hyundai included – are betting big on hydrogen technology playing a key role, especially in long-haul trucking and transport.

Late last year, the US announced a $US7bn ($10bn) program to create “regional clean hydrogen hubs” across America, which would form “a critical arm of America’s future clean energy economy” and help achieve President Joe Biden’s goal of a net-zero carbon economy by 2050.

Becoming a leader in the generation of hydrogen is seen as a massive global opportunity for Australia, which is something the government’s $2bn Hydrogen Headstart program will aim to capitalise on.

Treasurer Jim Chalmers is joined by Minister for Climate Change and Energy, Chris Bowen, Member for Bennelong, Jerome Laxale and Member for Reid, Sally Sitou. Picture: NCA Newswire / Gaye Gerard

A sure sign of how important this focus is for the Albanese government, is the fact that the budget papers used the phrase “renewable energy superpower” repeatedly.

Other green-energy targets in the budget included a focus on making commercial buildings more energy-efficient as part of Australia’s transition to a system using 82 per cent renewable power by 2030.

Companies with annual turnovers less than $50m that are looking to improve energy efficiency are eligible for a 20 per cent deduction for “assets supporting electrification”.

Up to $100,000 can be spent on these measures, with a maximum deduction of $20,000, and including things like more efficient heating and cooling systems, batteries, or more efficient electrical goods.

But it wasn’t all spending. The government will also bank an estimated $30m by excluding plug-in hybrid electric vehicles (PHEVs) from the fringe benefit tax exemption for electric cars.

Billed as a “stepping stone” technology, PHEVs combine an electric motor and battery with a traditional internal combustion engine, and can be used as an EV, a petrol vehicle, or as a combination of both.

Plug-in hybrids purchased between July 2022 and March 31, 2025 will remain eligible for the fringe benefit tax exemptions, after which they will only apply to battery electric vehicles.

he BYD Dolphin is expected to cost less than $40,000.

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