Electric Cars - A call for incentives to get more on the road

There has been a veritable explosion of electric vehicle (EV) concepts and market offerings from both the major car makers and new competitors over the last few years.

That growth in EV possibilities has been motivated by two, coincident factors. First the progression of battery technology, making a reasonable operating range possible, and second a generational change in developed market motoring needs combined with consumers’ desire to mitigate environmental impact.

The electric car disruptors

Tesla Motors, as a well-funded and celebrated disruptor, has acted as a further catalyst for global auto companies to jump on the EV train. Today there is not one major car company that does not, at least, have a working electric car concept, if not a range of EV and hybrid models on sale.

In the face of this growing product availability and consumer demand (Australia being regarded as among the earliest adopters of new technologies), our country is almost unique in its absence of any meaningful incentive to take-up zero emission vehicles, let alone support for infrastructure.

Driving range is not the issue for electric cars

The desirability to incentivize for a higher market penetration of electric cars becomes clearer when other factors are taken into account – for example, the greatest concentration of Australian motoring occurs in congested urban situations and most drivers cover less than 40 km per day. Range is generally not an issue, but urban air quality and efficient operation are. A higher mix of EVs would not only improve local air quality but would be a more efficient use of energy too, regardless of the energy source.

Australia lags behind with electric cars

The fact remains Australia lags well behind similar markets in offering any support to change from a dependence on fossil fuels. If we want to motivate a meaningful change in our motoring, we need to look at sensible, affordable and effective incentives.

Markets such as Canada, USA, Japan, Germany, France, New Zealand and even China all offer incentive packages as outlined in the table below.

Accelerated changes in consumer behavior (without a major market disruptor) seldom occur without some external incentive, either financial or operational, or both. The opportunity exists to learn from other markets and create support for a greater move to electric cars in Australia.

Steps we can take to get more people driving electric cars

An easy first step could be LCT; Luxury Car Tax. Currently, zero and low emitting vehicles above an antiquated retail price threshold attract this tax, and although RACV supports LCT’s removal in total, the impact of doing so to affected EVs alone, would send a strong signal to the market that such vehicles are both a socially and environmentally desirable option.

Another relatively easy and cost effective incentive could be an agreement amongst the State and Federal Transport and Environment Ministers, through the COAG process (Council of Australian Governments), to offer significant reductions in State vehicle registration and State stamp duty costs attaching to qualifying EVs.

In addition to cost incentives, there are practical benefits that could be offered to drivers of qualifying vehicles, including the use of transit lanes and preferential parking arrangements.

State and Local Governments could also assist in addressing range anxiety issues by making convenient locations available for the installation of charging points over and above what organisations such as RACV are already doing.

Even really simple changes such as local planning regulations requiring a minimum number of vehicle charge points for new single and multiple occupancy buildings, could help improve take-up and eventually improve our urban environment.

Governments at all levels could also lead by example by amending their procurement guidelines to ensure that the purchase of EVs, assuming they are fit-for-purpose, is a priority. This could help EVs reach critical market mass much faster.

The key questions to be considered are: do we want to see a higher use of EVs for our future motoring needs and what incentives and/or policies will make a material difference to consumer consideration and market penetration?

Many automotive market observers and participants believe there is a necessary role for government in influencing consumer behavior and that the cost of so doing need not cause significant hits to government expenditure. In any case, incurred costs it can be argued, will be offset, by community benefits from improved urban air quality, lower health spending and higher productivity, let alone by a more energy sustainable future.

Call for submissions

In October 2015, the Australian Government established a Ministerial Forum to coordinate a whole-of-government approach to addressing emissions from motor vehicles. As a result of a long consultation process, draft Regulation Impact Statements (including measures to improve the efficiency of new light vehicles) have just been released. Public Submissions on the draft Regulation Impact Statements are being accepted until 10 March 2017 . Details on this, including the full Reports can be found on the Ministerial Forum on Vehicle Emissions’ website:: https://infrastructure.gov.au/roads/environment/forum/index.aspx.  

Country or Region

Australia

NIL

Limited registration and stamp duty (ACT)

NIL

NIL

Canada

$6000 to $10,000 rebates (capped)

$5,000 to $8,500 rebates (volume capped)

$1,000 rebate for charger installation

Up to $2,500 rebate

China

Up to $11,000 purchase incentive

Annual tax exemptions

State based grants

Annual tax exemptions

Germany

Euro 4,000 rebate

State registration, parking, free charging and transit lane access

State Tax concessions

State registration, parking, free charging and transit lane access

Japan

$1,700-$3,500 tax exemption

N/A

$1,700-$3,500 tax exemption

N/A

South Korea

Up to $18,000 purchase incentive

N/A

Tax credit up to $2,500

N/A

UK

Up to Uk 4,500

Congestion charge exempt

Up to UK £2,500 grant

Congestion charge exempt

USA

$2,500-$7,500 tax credit

$1,500-$6,000 state tax rebates + registration, parking, free charging and transit lane access

NIL

$1,500-$3,000 state tax rebates + free charging and transit lane access

New Zealand

Road user chargers exemption

Transit lane access

Government support for roll-out

N/A

Written by Simon Mikedis, Environmental Sustainability Manager
January 12, 2017