EV summit signals countdown to petrol and diesel car ban

A talk-fest on Friday in Canberra is expected to take the first steps towards a ban on the sale of new petrol and diesel vehicles in Australia.

But even before it commences the National Electric Vehicle Summit has confirmed a growing rupture in the local auto industry over the speed of the transition from combustion to electric vehicles.

To be opened by the new federal Labor government’s climate change and energy minister Chris Bowen, the summit has been organised by the Electric Vehicle Council, the Smart Energy Council, the Australia Institute and Boundless, a not-for-profit established by high-profile eco-billionaire Mike Cannon-Brookes.

Bowen is expected to commit to developing a mandatory vehicles emissions reduction scheme at the event. Australia is one of the globe’s few developed economies not to have such a scheme, which will essentially penalise big polluters and reward zero emissions.

The end goal of such schemes is usually the eventual phase-out of sales of new internal combustion engine (ICE) vehicles.

But notably absent from the invite list for the summit is the peak body representing most auto brands sold in Australia, the Federal Chamber of Automotive Industries (FCAI).

While individual brands have been invited and both Volkswagen and Polestar reportedly have speaking roles, the decision not to invite the FCAI emphasises conflicts it has both internally and externally.

The EV Council and other environmental action groups are coalescing around a 2035 end-date for the sale of new ICE vehicles in Australia.

The ACT government is the first in Australia to also adopt that 2035 target, which now also appears likely to be mandated in Europe.

The 2035 date is important because the International Energy Agency says that phase-out is needed to hit net zero CO2 emissions by 2050.

But the FCAI is urging a slower transition that includes fuel-efficient and hybrid vehicles as well as zero-emissions EVs in the mix.

To back its argument the FCAI commissioned a report by the financial forecaster S&P Global that argues a 2035 transition to EVs in Australia would be too soon.

The report finds EVs would still be more expensive than equivalent ICE vehicles and key segments such as utes would still be dominated by diesel engine demand.

The report and the slower EV transition it argues for has its detractors (as well as supporters) within the car industry, let alone the environmental lobby.

The Australian Financial Review reported this week that the report was leaked to the media by FCAI membership unhappy with its content.

Subsequently, Nine Newspapers reported the FCAI is developing “a wide-ranging secret campaign that would delay Australia’s transition to electric vehicles and hamper a key part of the nation’s climate change plan”.

The Guardian followed up with an article that quoted climate lead at the Australasian centre for corporate responsibility, Harriet Kater, urging car manufacturers to break with the FCAI over the report.

The FCAI has undoubtedly frustrated the likes of the EV Council for its arguments in favour of a slower transition. It is seen to be supporting its biggest member Toyota, which provides double the funding to the chamber compared to any other brand because of its huge sales volumes. The Japanese giant is yet to sell an EV in Australia and earns big profits on diesel SUV and utes.

“The FCAI is known as the Toyota Canberra office to some of us,” an auto industry insider told carsales.

The FCAI’s voluntary emissions scheme for its members, which was introduced in 2020 in the absence of mandatory CO2 limits, also awards credits in its structure to hybrids, in which Toyota is the market leader.

No other such emissions scheme globally credits hybrids.

The FCAI is putting forward this scheme as a potential model for the federal government’s mandatory emissions framework, but opponents see it as being too lax in its CO2 limits.

In a recent interview with carsales, EV Council CEO Behyad Jafari was scathing about the FCAI’s position.

“This has been an organisation that has historically done everything they can to block and then water down emission reductions or the transition to electric vehicles,” he said.

“It is 2022 and this [S&P report] is the first time they’ve had anything addressing electric vehicles.

“For them it’s reading the tea leaves that there is a federal government that is very bullish on this issue and their first entrance into is ‘we can’t move as fast as the rest of the world can’.

“None of that is surprising.”

But FCAI CEO Tony Weber told carsales Australia’s transition had to be based on local circumstances.

“It needs to be done in the Australian context,” he said. “I am absolutely fed up with people quoting what happens in Norway, what happens in the UK and what happens in the US.

“Australia is not Norway. We can’t subsidise it by North Sea oil and it’s a very different population and a much smaller country; we are 32 times the size of the land mass of the UK and that creates charging infrastructure challenges and we are bigger than continental USA bit we don’t have 332 million people here.”

Norway has an ICE sales ban in place from 2025 and the UK from 2030. Some US states have announced ICE bans starting in 2035 – the same date expected to be adopted in Europe.

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