Why electric cars are good for the economy
Report reveals electric vehicles could be a boon for the Australian economy.
Every electric vehicle sold in Australia in place of a conventional petrol car will deliver economic and social benefits worth more than $10,000 over 10 years, according to a report by consulting firm EY.
The findings are at odds with the widely held belief that EVs are a drain on the public purse due to lost petrol excise. (More: 13 biggest EV myths, busted.)
The Uncovering the Hidden Costs and Benefits from Electric Vehicles report, conducted for the Australian EV Council, calculated that the government loses $5979 in fuel-excise revenue for each EV over a 10-year lifespan, and a further $858 in GST revenue from the sale of liquid fuels.
Australia’s fuel excise is the largest source of road-related government revenue, generating about 41 cents for every litre of petrol or diesel bought, and is used to fund road construction and maintenance.
However, the report revealed that every EV that replaces an internal combustion engine (ICE) vehicle has a net benefit to government and society of $8763 over 10 years, as well as providing an additional $1370 lift to government revenue.
EY calculated the direct and indirect benefits and drawbacks of EVs and ICE vehicles on a cost-per-kilometre basis, considering factors like fuel-excise payments, GST, sales taxes, greenhouse gas emissions, noise pollution, public health and the impact on the electricity market.
The report found EVs deliver significant additional benefits to society over petrol and diesel vehicles by reducing greenhouse gas emissions and particulates, other pollutants and noise. They would also contribute additional income tax by redistributing expenditure to more jobs-intensive industries than fuel retailing, and would negate government spending on fuel reserves.
And according to the analysis it’s not just electric passenger vehicles that offer benefits. Electric buses would contribute a net benefit of $40,051 to government and society if they replaced diesel-powered buses, the report concluded.
Electric Vehicle Council chief executive Behyad Jafari says that if a quarter of Australia’s fleet was converted to electric-powered vehicles, “it would generate an economic benefit of $4.4 billion a year”.
EY Asia Pacific Climate Change and Sustainability leader Dr Matthew Bell says the report clearly highlights the benefits of EVs. “Our analysis shows the significant value that electric vehicles can create for Australia, including to government,” he says.