New Government, New Plan for Electric Vehicles
With victory in the federal election held on May 21, the Labor Party and its leader and our new Prime Minister, Anthony Albanese, now have the chance to implement the plans, pledges, and ideas they championed in the lead-up to the election showdown. Amongst these are several that will have some impact on the automotive industry.
Key to the overall plan is a $15 billion National Reconstruction Fund, the aim of which is, in part, to ‘Develop our capabilities in transport manufacturing and supply chains including for cars, trains and shipbuilding.’
Amongst the many initiatives the Fund will be used for is a Powering Australia plan – a plan ‘to create jobs, cut power bills and reduce emissions by boosting renewable energy.’
Labor says that Powering Australia will be allocated billions from the National Reconstruction Fund and work on developing all manner of energy initiatives and projects – from electricity grid upgrades to solar banks and community batteries – and aim at reducing Australia’s emissions by 43 per cent by 2030 – a considerable difference to the previous government’s target of 26 to 28 per cent.
According to Labor, Powering Australia could create as many as 604,000 jobs – with most of those created in the regions – and encourage many billions of dollars in investment.
Electric vehicles (EV) are, naturally enough, part of the plan, and the new government intends to introduce an electric car discount and develop and implement a National Electric Vehicle Strategy.
That strategy will consider measures to make electric vehicles cheaper, increase electric vehicles sales and infrastructure; consider policies to encourage Australian manufacturing of electric car components (especially batteries) and, possibly, cars themselves.
Increasing EV sales may get a boost through a new electric car discount, due to kick in on July 1, which will see import tariffs and fringe benefits tax (FBT) removed on all electric cars that fall below the luxury car tax threshold of $79,659 for fuel efficient vehicles.
This discount is aimed at encouraging car manufacturers to import more affordable electric models – something that would certainly please many Australians who, in this time of cost-of-living pressures and the rising fuel prices, are more interested than ever in the benefits of owning an electrified vehicle.
Labor offers an example of the potential savings under this scenario, with a $50,000 electric model being more than $2,000 cheaper with the import tariff removed, and employers saving up to $9000 via the FBT exemption.
Labor says that, according to its modelling, EV sales are expected to soar, with as much as 89 per cent of new car sales being electrified vehicles by 2030 and EVs making up 15 per cent of all vehicles on Australian roads also by 2030.
Labor has also said it will establish what it calls a Driving the Nation Fund to ‘reduce costs, emissions and Australia’s reliance on foreign oil.’ The investment of $500 million will include funds to create a National EV Charging Network – adding 117 fast charging stations to the nation’s highways – and expand the nation’s hydrogen vehicle infrastructure by matching any funds committed by individual states and territories. This could lead, Labor says, to 16 hydrogen refuelling stations on Australia’s busiest freight routes.
There’s also a commitment to invest $100 million to support 10,000 apprentice positions in ‘new energy’ industries.
Examples of eligible industries include rooftop solar installation and maintenance, large-scale renewable projects, energy efficiency upgrades to homes and businesses, green hydrogen, renewable manufacturing, and relevant agricultural activities. While not specifically automotive, there is likely some crossover here.
In the days following their election victory, members of the new Labor government stated that the Australian economy it inherited is not, perhaps, in quite the robust condition it had expected. This may mean some hurdles appear as it chases its pre-election goals. Let’s hope it is able to clear them.
6 June 2022