The federal government will partner with the private sector to fund 50,000 charging stations in Australian homes, in a bid to encourage more people to buy electric vehicles.
The long-awaited Future Fuels strategy does not include subsidies, tax incentives, sales targets or minimum fuel emission standards that would make electric vehicles more affordable though, according to industry groups.
“Reducing the total cost of ownership through subsidies would not represent value for the taxpayer, particularly as industry is rapidly working through technological developments to make battery electric vehicles cheaper,” the strategy said.
It instead aligns with the “technology not taxes” mantra that underpins the government’s broader approach to emissions reductions.
The strategy includes expanding the Future Fuels Fund to a total of $250 million of taxpayers’ funds, which the government estimates will create 2,600 jobs over three years.
It does not say exactly how or where those jobs will be created but does point to employment opportunities through supply chains and manufacturing needed to sustain an electric vehicle market.
The government argues its investment will help ensure companies do not concentrate charging stations in inner-city areas, which may dissuade people in outer suburban or rural areas from purchasing an electric vehicle.
The strategy does not set a sales target for electric vehicles such as the 50 per cent by 2030 figure outlined before the last election by Labor, which was criticised by several Coalition ministers “a war on the weekend”.
“We will not be forcing Australians out of the car they want to drive or penalising those who can least afford it through bans or taxes,” Mr Morrison said.
“Instead, the strategy will work to drive down the cost of low and zero-emission vehicles and enhance consumer choice.”
The federal government will ask state and territory energy ministers to incentivise the use of smart chargers in homes and work with energy regulators to ensure the electricity grid can handle more batteries.
How does the strategy compare?
The government’s strategy is notably different when compared to other nations.
More than 80 per cent of the global car market – including Europe and the United States – now require new cars to meet minimum emissions standards before they can be sold.
The strategy released on Monday confirms Australia does not plan to adopt these standards, which would require more stringent restrictions on pollutants in petrol, and require new cars to emit far less particulate matter than currently allowed.
In August, US President Joe Biden outlined a 50 per cent sales target by 2030. Several other nations including Austria, China, Denmark, the Netherlands, Portugal, Korea and Spain have also announced targets.
Many nations have also announced tax concessions or subsidies to lower the price of electric vehicles, which are currently too expensive for many people.
France has one of the most generous schemes, which recently offered a discount of around $18,000 on a new electric vehicle if you traded in a petrol or diesel car.
Federal Labor has pledged to cut government taxes on non-luxury electric vehicles, which is estimated to make a $50,000 car about $2,000 cheaper. The policy would cost $200 million over three years.
Former Labor leader Bill Shorten this morning said the government had copied elements of the policy he took to the 2019 election, which Mr Morrison then derided as threatening to “end the weekend”.
“One of the big drawbacks on electric vehicles is people worry there’s not enough charging stations on our roads,” Mr Shorten said.
“Labor proposed it. Mr Morrison must read my policy book at night time for ideas.”
The Electric Vehicle Council’s CEO Behyad Jafari said the new strategy ignored the most important measures to improve electric vehicle uptake, including subsidies, tax incentives and sales targets.
“Future Fuels is certainly an advance on the government’s rhetoric of the last election,” Mr Jafari said.
“The strategy has identified some of the correct benefits and pathways, but it does little to realise them.”
Industry calls for more regulation
As well as providing incentives to encourage people to go and buy electric vehicles, car manufacturers were also hoping the government would step in and provide stricter emissions regulations for petrol cars.
That would, according to the industry, also help make electric vehicles more competitive against their petrol or diesel counterparts, and in the process make Australia a more appealing market.
Earlier this year, Michael Bartsch, the general manager of Volkswagen Group Australia, said the company’s head office refused to supply electric cars to the Australian market.
“Australia has some of the most lax environmental standards in the world,” he said.
“We’ll put those cars where we get the biggest commercial advantage and the biggest commercial advantage of the moment, when you overlay the fines for not achieving the CO2 targets, is Europe.”
Mr Jafari said fuel efficiency standards would lead to a larger range of vehicles on the market.
“If it contained fuel efficiency standards and rebates, it would give Australians more choice,” he said.
“The best and most affordable EVs manufacturers are producing would make their way swiftly onto our market.
“Fuel efficiency standards are the absolute bare minimum of what you would expect in any 21st century plan.”
The EV industry had also previously called for the government to exempt electric cars from the luxury vehicle tax, in another bid to encourage manufacturers to import a wider range of electric cars.