Government inaction is hindering EV uptake

A lack of action by the federal government, high purchase costs and limited availability are among the reasons Australian vehicle fleet buyers have little interest in purchasing electrified vehicles.

That’s the conclusion of a recent study by the Australian Fleet Managers Association (AFMA) that surveyed 177 business and government organisations in control of almost 70,000 vehicles.

Of those vehicles, just 3255 were hybrids and 1161 were plug-in electric vehicles or hybrids, indicating how low the take-up among fleets of electrified vehicles currently is.

According to calendar year 2019 VFACTS numbers, sales of new vehicles to Australian businesses, governments and rental companies totalled 548,405. That’s more than half the total 1.024 million sales recorded.

That is a pretty clear indicator of the importance of electrified vehicle uptake by fleets if Australia is to reduce its carbon footprint. All up, transport contributes almost 18 per cent of Australia’s total emissions.

According to the survey, challenges stopping fleets from implementing EVs earlier were purchase cost (60 per cent), the cost of setting up workplace infrastructure (45 per cent) and limited choice (34 per cent).

Less than a third of the survey’s respondents were operating electric vehicles, but half the respondents intend to add EVs to their fleets in the next 24 months.

However, high purchase prices are limiting opportunities for transition more than any other factor.

Australia's cheapest EV is the Hyundai IONIQ Electric ($48,970 plus ORCs) -- much more than in markets like China, Europe and the US. Chinese car-maker MG is expected to lower that mark with a battery-powered version of its ZS small SUV later this month and, further afield, a new small electric car.

Subsidies and public charging infrastructure consistently emerged as the most desired areas of government intervention.

Businesses in the services industry also called for more specific incentives such as the removal of the luxury car tax. Large fleets urged the removal of fringe benefits tax.

Another major factor limiting the electrified vehicles shift is the lack of electrified light commercial options such as pick-up trucks. Some of Australia's most popular (mid-size) utes are expected to become available with hybrid powertrains in their next generations, but many of the full-size all-electric pick-ups now emerging in the US (like the R1T pictured here) are even further away from Aussie showrooms -- if they come here at all.

“While we see many private and public sector organisations choosing to ‘go green’ by reducing vehicle emissions, their underlying motivations can vary significantly,” said Mace Hartley, the executive director of AFMA.

“ASX listed organisations are driven by corporate social responsibility, including the influence of large investors such as superannuation funds, who are in turn driven by their members.

“Local governments are driven by the demands and expectations of their rate payers.

“State governments are driven by the need to provide leadership, although this can take multiple forms - establishing policy frameworks to facilitate the uptake of zero emission vehicles, setting their own zero emissions targets, and leading the transition.

“While the federal government can in theory be motivated by each of these, their approach to date has been to advocate for a market-led solution, with limited active involvement and no policy announcements to drive a transition to zero emission vehicles.”

This is not the first time the Morrison government has been chastised for little interest in electrification. The EV council recently graded it an F.

The survey was provided funding support by the NSW government and AGL. The survey was conducted by ACA Research.