Labor hatches plan to revive car manufacturing industry

The Labor government will reportedly unveil a multi-million dollar plan to fund a revival of the car manufacturing sector in Australia based on the construction of electric and hydrogen-powered vehicles.

However, the economies of scale still present a major challenge to car-makers. carsales.com.au understands Labor 's discussions haven't involved Ford or Holden, while Tesla declined to comment.

Labor is pledging an election promise for 50 per cent of Australia’s new vehicle sales to go be electric from 2030, and believes many of them should be built in Australia using repurposed factories in South Australia and Victoria – the remaining remnants of Holden, Ford and Toyota’s respective car-making closures in 2016 and 2017.

According to the ABC, Labor leader Bill Shorten has hinted at his plan for a car industry renaissance in recent days, saying he wants Australia to be a "manufacturing nation".

The rhetoric was particularly evident in Shorten’s Budget reply speech, where he promoted the concept of battery-making in Australia.

"So instead of the usual trope of shipping the minerals overseas and buying back the finished product at vastly inflated prices, let's make the batteries here," he said.

"And let's do this with electric vehicles and charging equipment and stations too."

The Coalition has criticised Labor’s electric vehicle policy in recent days, however Department of Environment and Energy analysis has found both parties appear to be on a similar trajectory of pledging 50 per cent of EV sales in Australia by 2030.

While car-making formally ceased in Australia with the closure of Holden’s Elizabeth facility in 2017, the industry continues to employ thousands of skilled workers across the engineering and design divisions of Holden, Ford and Toyota, not to mention the assembly operations of several truck-makers.

Then there’s an active global supply chain which continues to feed some of the biggest names in the business, thanks to companies such as Bosch, Nissan Casting and Carbon Revolution wheels.

This isn't the first time calls have been made to revive in the industry. In 2018, Holden and its parent General Motors rejected UK billionaire businessman Sanjeev Gupta's bid to build electric cars using assets from its old Adelaide assembly plant.

While electric vehicles comprise less than 1 per cent of new car sales in Australia, that hasn’t precluded small start-ups from manufacturing them here.

Queensland-based ACE EV group launched its first commercial vehicle, a $40,000 van, in Sydney last week. The car-maker also has plans for a small ute called the ACE Yewt and a city car dubbed the ACE Cargo.

Elsewhere, Adelaide firm Voltra supplies mining companies including BHP with electric utes converted from Toyota LandCruiser 70 Series.

Labor reportedly plans to fund its electric manufacturing bid with the $1 billion Automotive Transformation Scheme, of which there are 65 firms still registered.