Report claims Aussies could save $10K with an EV
EV Council commissions report on the importance of fuel-efficiency standards and how electric vehicles will make driving cheaperAustralian drivers could save up to $10,000 by driving an electric vehicle if the federal government’s proposed fuel-efficiency standards are implemented, according to new research jointly commissioned by the Electric Vehicle Council and Climate Council.
The Raising Standards, Cutting Costs report, produced by independent research firm Mandala, investigates the potential economic, environmental and consumer benefits that could be generated by the introduction of fuel-efficiency standards that would restrict car-makers from selling new passenger cars and light commercial vehicles in Australia that produce more than a prescribed level of toxic emissions.
Naturally, these restrictions will encourage a greater uptake of zero-emission vehicles, such as battery-electric vehicles (EVs) and hydrogen fuel-cell vehicles (FCEVs), while also lowering the fuel consumption of vehicles with an internal combustion engine.
Australia is one of only a handful of countries around the globe with a developed automotive market that has yet to implement standards designed to lower emissions through more fuel-efficient vehicles.
The European Union has announced tough restrictions that will effectively outlaw the internal combustion engine (ICE) in Europe by 2035, when all new vehicles sold must produce zero emissions.
The federal government has proposed the introduction of a national fuel-efficiency standard as part of its commitment to reduce emissions by 43 per cent before 2030 and become net zero by 2050.
It is currently in the process of consultation with key stakeholders and public submissions before tabling a formal bill to parliament for approval.
The EVC report claims Australia could fall significantly behind its global peers without the introduction of a fuel-efficiency standard, which could put a $13.6 billion dent in the local economy and leave consumers without access to the latest in automotive technologies.
“A well-designed new vehicle efficiency standard is crucial if we want to end Australia's reputation as the dumping ground for dated, high-emission vehicles,” said Behyad Jafari, CEO of the Electric Vehicle Council.
“A strong standard will let us catch up to the rest of the developed world where we can finally embrace greener, cheaper, more efficient cars.
“Sticking with the status quo would not only be environmentally destructive but also expensive. This research proves the simple truth, that a globally competitive efficiency standard for cars will save motorists money.”
The Mandala report examines the benefits of three pathways for the introduction of a fuel-efficiency standard: a ‘Globally Competitive Case’ with an aggressive solution that catches up to the US by 2027 and the EU by 2030; a ‘Fast Follower Case’ where the targets decrease at a linear rate from 2023 to match the EU by 2035; and a ‘Slow Follower Case’ where Australia matches the US by 2032 and then gradually reduces to meet the EU by 2035.
It claims that, in all three scenarios, Australia will be economically and environmentally better off and consumers will save thousands of dollars in vehicle ownership through reduced fuel and maintenance costs.
In the best case, the report says consumers will benefit to the tune of $13.6 billion via savings of $12.9 billion in fossil fuels and $4.7 billion in lower servicing costs, while producing 31 million tonnes less carbon dioxide.
But it also warns that consumers will be initially forced to pay more for newer, more fuel-efficient technologies, with prices for ICE vehicles expected to increase by 0.3 per cent per annum.
It claims that EVs will continue to command a price premium over comparable ICE vehicles until 2028, but prices will fall an average of 2.8 per cent each year as further developments in large-scale battery production and greater competition in the marketplace will provide price parity.
The report uses a hypothetical between two consumers to highlight the potential savings when buying an electric vehicle and an ICE vehicle from 2027.
In both cases, the purchase price is higher than today (by $2100 and $500 respectively), but the lifetime savings ($12,000 and $800 respectively) provide considerable compensation, with EV owners recouping the additional spend more quickly (1.8 years compared to 6.3 years).
“Under a new vehicle efficiency standard, lower running costs and increased competition would drive a reduction in the overall cost of both electric and efficient internal combustion engine vehicles by up to thousands of dollars,” said Jafari.
“It’s clear that a strong standard will improve the efficiency of new vehicles, increase the supply of electric vehicles, reduce CO2 emissions, bring health benefits by reducing air pollutants, and save motorists money. We encourage the federal government to build a compulsory, competitive efficiency standard so that Australians can reap these benefits as soon as possible.”
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Related: Confirmed: Europe to ban sales of petrol and diesel cars from 2035
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