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ELECTRIC vehicles have been given a kickstart with a federal government finance authority partnering with Macquarie Group to subsidise the vehicle financing.

In effect, the $100 million agreement between Macquarie’s leasing arm and the government’s Clean Energy Finance Corporation will subsidise EVs – something the federal government wouldn’t previously commit itself to.

The goal, said federal energy minister Josh Frydenberg, was to put Australia one step closer to meeting its Paris Agreement signed in April 2016 to reduce carbon-dioxide levels by 28 per cent from 2005 levels by 2030.

In Australia, transport is the fastest growing source of CO2 emissions. It accounts for 93 million tonnes or 18 per cent of the national total.

The Macquarie and CEFC initiative will reduce CO2 emissions by about 200,000 tonnes – or 0.2 per cent of the total transport emissions – but it is hoped to be a catalyst for more EV sales. In 2016, Australia sold only 219 car and truck EVs compared with 1108 in 2015.

BMW i3

Electric vehicles comprised only 0.02 per cent of the vehicle market in 2016. However, in the eight months of this year, 724 EVs have been sold.

CEFC will support Macquarie to reduce the EV leases by a 0.7 percentage point discount to the standard rate. It is expected that about 1200 vehicles will be financed under the arrangement.

The Electric Vehicle Council’s CEO, Behyad Jafari, said: “An agreement such as this provides important support to Australia’s electric vehicle industry.

“The greening of Australia’s vehicle fleet represents extraordinary untapped opportunity to cut carbon emissions.

“Unfortunately, we lag advanced developed nations in the uptake of electric vehicles because we are not providing concessions in areas such as registration charges and fringe benefit tax.

“However, it’s not too late. By getting our tax and investment policies right, Australia can support the development of electric vehicle infrastructure, win a slice of a booming global market and support a cleaner, healthier environment.”

Australian energy supplier AGL Energy this year made a commitment for 10 per cent of its fleet to be EVs and offers concessional loans to staff.

Nissan Leaf

Mr Jafari commended the initiative and said he hoped to see more agreements being offered.

CEFC has $700 million of programs with other financiers for energy-efficient equipment but the Macquarie arrangement is seen at a more targeted approach to the transport CO2 issues.

The program will cover EVs such as the Nissan Leaf, BMW i3 and Tesla, and plug-in hybrid electric vehicles including the Mitsubishi Outlander, BMW hybrids such as the 3 Series 330e, Audi A3 e-tron, and Mercedes-Benz 350e.

Macquarie’s involvement in the EV program follows its purchase of the Green Investment Bank from the UK government for $A4 billion.

The acquisition means Macquarie will oversee about $A7 billion worth of green infrastructure assets and projects. It will also establish three new investment vehicles – an offshore wind investment vehicle, a low carbon leading platform, and a green infrastructure investment platform.

The UK’s Green Investment Bank has already backed 99 green infrastructure projects and seven funds, and directly committed $A5.8 billion into transactions worth $A20 billion since it was founded in 2012.

By Neil Dowling

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