National electric vehicle strategy released

The Albanese federal government has released its National Electric Vehicle Strategy that aims to increase the uptake of electric cars and reduce emissions in Australia, where EVs represent only a fraction of new cars sold each year.

A long-awaited mandatory Fuel Efficiency Standard is a core tenet of the strategy, setting an average carbon emissions limit – which gets tougher over time and carries penalties – across all new light vehicles (that is, passenger cars and most SUVs) sold by each vehicle supplier in our market.

Bringing the Australian car industry closer to regulations and emissions-reduction targets seen in virtually all other developed countries (except Russia), these mandatory CO2 limits are still to be finalised.

The federal government is now taking public submissions, which close at the end of next month (May 31), and ministers say they’ll work with industry and the community to finalise details “in the coming months”.

The government has committed to releasing a “proposed standard” by the end of this year.

The car industry currently operates under a voluntary CO2 standard it introduced in 2020 following inaction on mandatory targets by previous governments that has left Australia about a decade behind other markets such as Europe.

This voluntary standard is bringing emissions down for passenger cars and most SUVs, but heavy SUVs (including 4x4 off-roaders) and light commercial vehicles (including utes, the biggest-selling models in Australia) are going backwards.

The extent to which the new Fuel Efficiency Standard will impose penalties on these top-selling heavy vehicles, which are keeping Australia’s overall emissions high relative to other countries, remains to be seen.

But the emphasis from the government today was on “light vehicles”, which indicates that utes and large 4x4s are likely to have their own set of rules and benefit from more relaxed emissions targets.

In a joint statement, federal climate change and energy minister Chris Bowen and transport and infrastructure minister Catherine King said fuel efficiency standards would only apply to new vehicles – and not retrospectively – and that they could save motorists up to $519 a year in fuel costs.

Such savings hinge on overseas manufacturers sending more efficient cars to Australia because it has mandatory CO2 standards in place.

According to the government, the National Electric Vehicle Strategy has three key objectives:

Through a range of initiatives, the government aims to:

There’s no headline-grabbing new subsidies or other incentives to stimulate EV sales under the government’s strategy, which is sticking to current measures such as the Electric Car Discount.

But there are some new initiatives beyond the Fuel Efficiency Standard. These include:

“This strategy delivers on our commitment to provide greater choice for Australians to drive cars that are cleaner and cheaper to run,” Minister Bowen said.

“This strategy provides the co-ordination and leadership to drive down costs and improve infrastructure so that we get more affordable and accessible electric vehicles on the market.”

Minister King added that the new Fuel Efficiency Standard “offers an historic opportunity to develop fuel efficiency standards that learn from international best practice, while recognising the unique needs of Australians”.

“It will send a strong message to the global car industry that when it comes to transport technology, Australia will no longer settle for less,” she said.

“More than 85 per cent of all cars sold in the world are subject to fuel efficiency standards. It’s time Australians were offered the same choice.”

Industry support for change

Car industry representative bodies and interest groups such as the Electric Vehicle Council have welcomed the National Electric Vehicle Strategy, but will continue lobbying the government over specific targets and penalties under the all-important Fuel Efficiency Standard.

“The questions and topics raised in the consultation paper highlight the complexity of the issue and demonstrates the government has done its homework to ensure any future emissions standard is not a simplistic copy of an overseas standard but instead suited to Australia,” said Federal Chamber of Automotive Industries (FCAI) CEO Tony Weber.

“The FCAI and its members [the car-makers] will work alongside the federal, state and territory governments to progress the development of a fuel efficiency standard that reduces carbon emissions and encourages access to the world’s best zero and low emissions vehicle technology.”

Electric Vehicle Council CEO Behyad Jafari said: “There’s a long road ahead for Australia to catch up with the rest of the world on electric vehicle policy, but this strategy can accelerate progress.

“It’s a relief that an Australian government has finally committed to fuel efficiency standards, which have been operational in the US and Europe for decades. But with those jurisdictions now leaping forward in terms of ambition Australia must bring in strong standards that keep pace with the modern world.

“If we squib it on the detail Australia will remain the world’s dumping ground for dated, high-emission vehicles.”

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