Australia’s EV and FCEV take-up compared globally

Belatedly, the Australian government has had its EV epiphany and delivered a policy that it claims will see 35 per cent penetration of the zero (local) emission vehicles by 2035.

While much has been made of prime minister Scott Morrison’s about-face on EVs, it was inevitable, given the weight of research, development and new products coming with battery-electric power.

Morrison’s policy in the lead up to the next federal election raises more questions than it answers, and the biggest of all is this: Does it do enough and what else needs to happen?

The advantage a government like ours has is that, without a car industry of its own to protect, it should be able pick and choose from what emissions-reducing vehicle policies have worked around the world.

There are many, many policies that promote a move to zero-emission driving, but then (as readers rightly point out) Australia has its own geographical eccentricities to factor in. We are a big country and people like to travel big miles (though, admittedly, not all the time), unlike those postage-stamp joints in Europe.

Nevertheless, EV policies in other countries can act as signposts for what works and what doesn’t in reducing the carbon footprint from personal transport. And they can also serve to highlight if the proposed measures could work here or not.

And what has worked elsewhere has been a combination of legislation, incentives.

Firstly, the Morrison policy message was clear on one thing: the Coalition would not be “putting mandates [on Australians] and telling them what to do”.

And so, the Morrison government policy would not include any target, much less a mandate, for ending the sale of fossil fuel-powered cars in Australia.

To be clear, the 2019 Labor Party policy on EVs didn’t mandate that, either, but it did set a target of 50 per cent EVs in the new-car sales mix by 2030 that it hoped to hit using a pull, rather than push strategy.

That target figure was 15 per cent higher than the Morrison target, to be arrived at five years earlier.

But neither policy (the Labor Party’s latest EV policy has yet to be released) engaged the end of combustion power, even though there are plenty of roadmaps out there that already do.

The UK will effectively ban the sale of combustion-powered cars (petrol-, diesel- and hybrid-powered) by 2030 (plug-in hybrids will follow five years later), and the EU will do the same thing.

Norway, the world’s most enthusiastic adopter of zero-emission vehicles and the most enthusiastic taxer of combustion powertrains, hopes to be rid of combustion power as early as next year.

South Korea, home to Kia, Hyundai and Genesis, plans to phase out combustion power by 2025 (which is one of the reasons both of its volume brands are pushing both BEVs and FCEVs).

Like Australia, the United States government seems reluctant to impose a sweeping set of rules about moving to zero-emission vehicles, though president Joe Biden has gone on record with his desire to have a 50 per cent EV fleet by 2030.

And, like Australia, the states are moving to do it for them – led, as usual in these things, by California.

There are a couple of reasons California can do this, not the least of which is that, by itself, it would be the world’s fifth biggest new-car market (and far bigger than Australia’s). So it’s worth car-makers’ effort to change for California.

California has proposed an end to the sale of combustion-powered cars by 2035, but if California has the size to ask car companies to change with it, China is the body builder.

By far the world’s biggest car market (it bought two million EVs to the end of October this year alone), China will force car-makers to end the sale of petrol and diesel models by 2035.

And if the world’s car-makers don’t want to meet those rules, China doesn’t care. It has almost 100 car-makers of its own, some of which are at least part owned by foreign car-makers, but many of which (like Geely, Nio and BYD) are homegrown.

Other than rules making them compliant for Australian roads, the Australian government hasn’t done much to funnel the car industry towards the sale of BEVs or FCEVs.

The car-makers themselves have pushed down the plug-in hybrid (PHEV) route and Toyota is the most notable proponent of parallel hybrids that pull petrol-powered consumption down to diesel levels.

That hasn’t been the case in other countries, even though they’ve been lobbied by their own car industries to maintain the status quo – and Australia hasn’t had to be overly concerned about what the car manufacturers think since manufacturing was killed off here.

Originally applied to cars in 2014, the EU (European Union) 6 emissions regulations forced car-makers to pull down the levels of NOx and CO2 from their tailpipes to such a level that some cheated to get around it and others played deviously with the fine print.

That’s why the EU changed its test procedures from the NEDC (New European Driving Cycle) to the WLTP (Worldwide Harmonized Light Vehicle Test Procedure). The strictness of what it measures and how is behind the spate of new-vehicle options being grouped into ‘packs’ at dealerships.

Car-makers now have to do a new WLTP test for every single option that is put on, or taken off, each model, even if it’s just a new seat trim.

But after Dieselgate, it’s hard to blame legislators for taking a tough line and it’s the same for everybody. And there are city-specific rules, too, so even today drivers need an EU6-compliant car to enter central London.

And they’re not new, because the EU1 standard came into effect in 1993 and EU5 chimed in in 2011, hitting the check gates laid down after the Kyoto Accords.

While it didn’t tell Europeans what to do, it did tell the car-makers what not to do. And what they couldn’t do, according to European Union Directive number 443/2009, was to exceed 130 grams per kilometre of CO2 across their entire new-vehicle fleet.

It worked. After failing to meet their own voluntary proposals in the 2000s, car-makers met EU6 so quickly that a tighter set of EU6 rules (EU6d) released in 2014 (to be mandated by 2020) pulled the maximum target down to 95g/km.

That figure alone mandated that every car-maker had to have at least one BEV in their range to meet the target, but it coincided with the boom in SUVs, so weight ballooned and car-makers also moved en-masse to plug-in hybrids to counter it.

Regulation (EU) 2019/631 came into life last year, mandating a 15 per cent reduction from 2020 CO2 emission levels by 2025 and a 37.5 per cent reduction by 2030.

Effectively, this rule can only be met by saturating model ranges with BEVs and PHEVs, which is why we are seeing such a surge in the number of BEV models being released from all over the world.

Without BEVs, car-maker can’t sell cars in Europe anymore, and Europe’s regulations are adopted around the world – including in Australia.

However, Australia doesn’t back its rules with the enormous fines for missing CO2 targets that Europe does. A fine of €95 per gram over the target per vehicle sold it can run into billions, and you can thank that for most of the BEVs we’re about to get.

In China, legislation demanded 10 per cent BEV penetration of all new vehicles sold by 2019, increasing to 12 per cent by 2020.

An overbearing central government can lean on car-makers to not build new plants for combustion cars, too, and half of all Chinese government fleet vehicle purchases are mandated to be BEVs.

New technologies are expensive and the rest of the developed world understood that people wouldn’t race to embrace an entirely new way of driving without some help.

For most countries, that help has been to throw subsidies, or incentives, at the purchase price of EVs. Europe, the US and China account for about three quarters of the world’s passenger vehicle sales, so we’ll start there.

For the US, it has come to a federal tax credit to car-makers of between $2500 and $7500 for the first 200,000 BEVs they sell. Mostly, this has been passed on to buyers.

China also has generous subsidies on BEVs, and its sales rose from 1.1 million in 2018 to two million for the first 10 months of this year.

Its incentives go further into the local culture than just a tax cut. Local governments will approve licence plates for BEVs quickly and cheaply. In Shanghai, BEV licence plates are free, but cost $US12,000 for each combustion car. There are free or preferential parking places for BEVs and FCEVs, and BEVs are exempt from periodic bans on cars entering city centres.

Any electric car with more than 400km of range attracted an RMB25,000 ($A5300) subsidy in 2019, while cars with between 250km and 400km came with an RMB18,000 ($A3800) subsidy.

BEVs and PHEVs are also exempt from sales and consumption taxes in China, and even with subsidies of RMB200,000 ($A43,000) on FCEVs, there isn’t much sales movement on them there.

Norway, with the world’s highest BEV penetration, went its own way, with no purchase tax, no GST and no road tax on EVs, drivers of which were only charged half price for any toll road or bridge and could freely use bus and taxi lanes.

The Morrison policy on electrification of the car fleet will not include incentives of any kind, but if the goal is to move people from combustion power to battery power, the numbers suggest incentives work.

That’s probably why the states took it into their own hands. The state-by-state breakdown currently looks like this.

NSW: a $490 million package as part of an Electric Vehicle Strategy, with rebates on BEVs sold for less than $68,750. It’s the largest scheme in the country so far. There will also be support to fleets to switch to BEVs and FCEVs.

Victoria: The Government has a target that far exceeds the Morrison figure, with 50 per cent of cars to be zero-emissions by 2030. To do this it will give $3000 subsidies to qualified customers.

Queensland: It has reduced stamp duty to $2 per $100 for cars up to $100,000 and to $4 per $100 for more expensive cars. (It’s $6 per $100 for combustion-powered cars).

ACT: BEVs are given an exemption from stamp duty, and any BEV or FCEV bought before the end of June 2024 will receive two years of free registration.

South Australia: The Festival State has announced a $3000 subsidy for 6000 EV buyers, plus a commitment to build 110 fast-chargers on highways and 350 in city centres by 2030.

Tasmania: It waives stamp duty for all new and used BEVS and FCEVs and that’s expected to last for at least two years. The double gain here is that Tasmania has by far the highest percentage of renewable energy in its electricity grid.

Northern Territory: The land of big distances will deliver free registration and a $1500 stamp-duty discount on BEVs, FCEVs and PHEVs from July next year, but only if they’re priced below $50,000.

Western Australia: Thought we’d forgotten you, as usual? No, it’s just that there has been no action from the government, other than a plan to invest in charging infrastructure.