International interest in electric vehicles (EVs) is constantly increasing, with over three million EVs on the roads internationally and uptake expected to increase year upon year. However, with EVs making up only 0.2 per cent of Australian vehicles, there are clearly some roadblocks that are holding back the growth of EVs Down Under.
Of the 36 countries that make up the Organisation for Economic Cooperation and Development (OECD), 32 countries have higher EV sales than Australia, with the countries that have lower sales all classified as having emerging economies.
As a country of car lovers, and with steady access to the solar energy that generally fuels these vehicles, it’s surprising to many that EV ownership hasn’t risen more quickly in Australia.
While our country’s vast size certainly plays a part in range anxiety and poses challenges for the rollout of charging infrastructure, Australian consumer interest is also being influenced by upfront and ongoing EV costs, Australia’s network capacity, access to charging infrastructure, and barriers to purchase at the point of sale.
The perception of price
Perhaps the single biggest roadblock to EV uptake in Australia remains around price. A total of 1,062,867 new vehicles were purchased in Australia in 2019, while an estimated three million used vehicles are purchased each year – suggesting that upfront vehicle cost is an important consideration for Australians.
With only 30,641 hybrid petrol-electric vehicles and 2,925 EVs sold in 2019 – and with very few second hand or demo EVs available on the Australian market – it pays to consider price as a barrier to uptake.
It’s difficult to put a price on the ongoing environmental and cost benefits of EVs; however, the upfront cost of a base model is undoubtedly more expensive than its petrol engine counterparts, with even the cheapest model available in Australia still costing close to $50,000.
This is compared with the average cost of a new 2019 city car in Australia being only $20,593. While the high upfront cost is a barrier to uptake, the ongoing costs of EVs for Australians are considerably less than the ongoing costs of petrol vehicles.
The average fuel, or charging cost, for an EV in Australia is between $500 and $600 per year1, compared with $1,981 per year for an average petrol engine car in a major city and even higher fuel costs associated with petrol vehicles in regional areas.
With fewer moving parts than petrol vehicles, the cost of servicing EVs is also lower, and to counteract high upfront costs and encourage the uptake of EVs, some state governments have also introduced incentives.
These include an annual registration fee reduction of $100 in Victoria and vehicle stamp duty exemption for EVs purchased in the Australian Capital Territory (ACT).
While price is mostly impacted by EV manufacturers, governments also have a role to play in lowering the overall cost of these vehicles and incentivising their uptake in Australia.
It is currently estimated that electric vehicles will achieve price parity with fuel-combustion engine vehicles by 2022, but BloombergNEF argues that Australia still has a lack of sales incentives that mean Australia may not achieve higher sales of EVs until the 2030s2.
Range anxiety has traditionally been a concern for Australian drivers.
Range anxiety and charging infrastructure
We’ve all heard the term “range anxiety”, but what’s not entirely clear is the reason why this remains a barrier for EV uptake, given the fact that the vast majority of trips in metropolitan cities are well within the range of an EV.
According to a 2019 Nielsen report, a lack of public charging infrastructure for EVs was a major concern for up to 77 per cent of Australians who are concerned that a car’s battery may not last until they either reach their destination, or can conveniently access a charging station.
While the number of electric vehicle charging stations across the country is constantly increasing, long distances can pose difficulties for drivers, with long distance trips requiring extra planning as well as extra time for charging.
Charging on the road
Both state governments and private companies in Australia are working towards bridging the charging infrastructure gap to make long distance EV travel a reality and reduce range anxiety; however, the rate at which EV technology is evolving can make planning for the future uncertain.
Australia is still limited in its public charging facilities. While the adoption of rapid charging stations in locations such as supermarket car parks are increasing in major cities, and work is being done to introduce a broad network of rapid charging sites at locations on major driving routes across the country, there’s still work to be done at a network level to ensure that Australia’s electricity grid will be able to handle mass adoption of EVs.
The rollout of public charging facilities and works to improve the electricity network are largely dependent on government funding.
Some charging facilities are also jointly funded with private companies, such as the $15 million Chargefox Electric Vehicle Charging Network Project which commenced in October 2018.
With $6 million in funding from the Australian Renewable Energy Agency (ARENA), the network spans five states and comprises 21 locations on major driving routes.
The rollout of this network means that drivers of EVs will be able to drive between some major Australian cities without risking an empty battery, and being powered completely by locally-generated renewable energy, it puts minimal pressure on the existing electricity grid.
While overall uptake of EVs in Australia is low, uptake is increasing at a relatively fast rate. Between 2018 and 2019 alone, EV sales increased by over 200 per cent, putting significant pressure on the Australian electricity grid.
One report cited that one charging station with eight vehicle chargers built in Adelaide in 2017 was the equivalent to connecting 100 new homes to the grid3.
Combating a rise in electricity demand relies on both an improved distribution network at a government level, as well as charging technology that uses automatic load management to ensure that if demand gets too high, chargers will throttle back.
In June 2018, Energy Networks Australia (ENA) commenced a collaboration with the Australian Energy Market Operator (AEMO) on the Open Energy Networks Project (OENP), which proposes options to improve the electricity system and ensure that EVs, as well as household solar and storage, can work together to deliver security and value for consumers.
While ENA states that the grid can cope with current demand, an increase in demand from EVs in the coming years can have major implications for the future design and management of the grid.
This energy transformation will likely rely on an increase in the use of renewable energy to charge vehicles, with particular emphasis on household solar and battery storage.
Charging at home
A viable home charging option is crucial for potential buyers of EVs and can be a barrier when considering a vehicle. Household charging infrastructure involves a charging circuit and EV charging outlet.
Prices of home charging outlets vary in price, with a standard wall socket costing as little as $100 and up to $500 for an entry-level pure EV charging outlet. More advanced units can cost as much as $2,500.
While home charging infrastructure can be connected to the grid, uptake of home solar and battery storage is encouraged, and also reduces consumer charging costs long term.
Barriers at the point of sale
Regardless of other limitations, electric vehicles are only accessible to buyers if car dealerships can facilitate sales.
This relies on dealerships not only having stock and demo models, but having vehicles charged and ready to test drive and sales staff being knowledgeable and willing to provide answers to consumer questions.
While there is little data on dealerships’ commitment to selling EVs and having them available and ready to test drive, responses from consumers are varied, suggesting that Australian car dealers may not be ready, interested or equipped with the information necessary to deal with EV enquiries, creating a further barrier to sales in Australia.
Another barrier at the point of sale is the number of vehicles available on the Australian market. As of February 2020, the EV models available in Australia were:
» BMW i3 (2019)
» Hyundai Kona Electric (2019)
» Hyundai Ioniq Electric (2020)
» Nissan Leaf (2019)
» Renault Zoe (2019)
» Tesla Model 3 (2020)
While this range does offer potential EV buyers some choice, it’s a small range compared to countries such as the United States which have more than triple the range offered in Australia, and is no doubt a contributing factor to low uptake.
Lagging, but with solid potential
While Australia lags behind its global counterparts when it comes to EV uptake, the good news is, our potential for growth is strong.
Australians still love their personal cars, as our 2019 sales figures show, and we have a natural advantage when it comes to being able to generate the renewable energy to fuel these cars.
In good news for the sector, the Federal Government’s 2020-21 Budget pledged $74.5 million towards assisting businesses who are keen to look at cleaner vehicles, including hydrogen and electric vehicles, for their fleet requirements.
Uptake of EVs in Australia may currently be low, but the widespread adoption of EVs is a matter of when, not if.
With rising consumer interest, and as these barriers continue to be addressed, Australia will start to move towards a more sustainable vehicle future.
