The Australian Federal Government recently published its long-promised National Electric Vehicle Strategy, with a core focus on encouraging more supply of the latest EVs and thereby making them cheaper.
The 56-page strategy document builds on what’s been demonstrated by existing legislation such as the fringe-benefits tax exemption scheme for EVs under $85,000 – namely that pulling the right levers can increase demand for greener cars.
Supply is the current handbrake on EV take-up in Australia, which sits at around 6% of the new light vehicle retail market in 2023, rather than any obvious lack of demand.
The prospect of more EVs on the ground suggests opportunities for light vehicle fleets and their partners looking to switch to zero tailpipe emissions vehicles sooner rather than later, so it’s a policy framework worth brushing up on.
At the core is confirmation that Australia will adopt fuel efficiency standards like those found in the majority of advanced economies including the European Union, US, UK, China, Japan, Brazil, India, Canada, South Korea, New Zealand, and Mexico.
This is something most of the 500 submissions to the consultation paper suggested, including the one from the National Automotive Leasing and Salary Packaging Association.
Obliging Australia’s brands to keep their new vehicle average tailpipe CO2 emissions below an imposed level (measured in grams of CO2 per kilometre) pushes their global parent companies to divert more green cars here.
The alternative would be to pay fines, or import fewer cars and lose market share.
The report flags more Federal engagement with New Zealand, and states and territories, to aggregate government fleet vehicle purchasing, with the goal being a net zero Australian Public Service by 2030 and a 75% low emissions fleet by 2025.
Fleet procurement programs of this type at scale can also give car manufacturers greater confidence to commit EVs to the Australian market, and speed-up the growth of a second-hand EV market at the other end.
It also highlights the obvious need to fund EV charging infrastructure across regional Australia to achieve a comprehensive network, in other words plugging gaps not serviced by the demand-led private market.
Given most charging takes place at home overnight, the government says it plans to cut red tape slowing the rollout of wall box style chargers into existing multi-residential buildings. This could also expand into policies around fitting chargers at workplaces.
Updates to the National Construction Code, agreed by Commonwealth, State and Territory Building Ministers in October 2022, require new buildings be designed, constructed and fitted out to enable the installation of renewable energy and EV charging.
There are some further things flagged in the report such as the expected introduction of a mandatory Acoustic Vehicle Alerting Systems for light EVs to reduce potential pedestrian collisions, the creation of consistent national standards for people living with a disability, and interoperability standards for charging infrastructure.
There are also provisions to support businesses devoted to the eventual recycling and repurposing of batteries, and encouraging a local battery industry to value-add on Australia’s vast reserves of nickel, manganese, cobalt, graphite and lithium.
“The Australian Made Battery Plan will help support globally competitive Australian battery industries and signal to international partners that Australia is open for investment and ready to play a role in diversifying concentrated global supply chains,” the report claims.
What comes next? The government must design the fuel efficiency standards, in other words decide on what average CO2 caps to impose and how to gradually tighten them. It is once again taking submissions from the industry on this.
All told, between this set of national standards and plans designed to improve supply and reduce prices, the FBT exemption scheme, and the rebates or tax cuts available in each state and territory, there’s probably never been a better time to be considering some EVs for your fleet, on opting for one on your next novated lease.
