The Federal Chamber of Automotive Industries (FCAI) said that without targets, OEMs could ignore marketing their EVs in Australia and prefer to sell into markets that encourage the take up of low-emission vehicles. 

It said this would lead to a reduced uptake of EVs in Australia and a resulting impact being the reduction in transport emissions.

Backed by research from S&P Global, the FCAI said EVs would make up only 18 per cent of all vehicles sold in Australia in 2030 if the government does not move to encourage OEMs to sell into this market.

FCAI chief executive Tony Weber told GoAutoNews Premium that if Australia has a CO2 target “then you send a clear signal to the OEMs to provide low-emission vehicle technology to the Australian marketplace”.

“That will drive a reduction in CO2 outcomes because Australia would then be able to access a range of technologies that meet the needs of consumers.”

Mr Weber is convinced that OEMs will increase the supply of EVs to Australia if there are emission targets.

But he said that uptake will be unavoidably slowed by battery production limitations and the cost of vehicles and these factors make any proposal for a blanket ban on internal-combustion engined (IC) vehicles – as proposed by the ACT government – impossible to achieve in the short term.

“Proposals to reach net zero emissions across the economy by 2050 assume you need zero sales of ICEs in 2035,” he said.

“These proposals do not take into account the capacity to build EVs, the price at which they can be built, the range of models which will be available. There will be customers who will not be able to afford EVs in 2035. 

“There will also be vehicles such as utes that will not be available in full battery electric in 2035 in Australia.

“There’s another issue at play here and that is the question about the capacity of the world to produce 100 million batteries. 

“There’s no guarantee that in 2030, or 2033, or 2035, that the global markets will have the capacity to make that amount of batteries.

“Until we get to that capacity point, not everyone can have a battery electric vehicle.”

But the FCAI believes that emission targets should be implemented as soon as possible to encourage OEMs to put Australia on the shopping list and promote EVs and other low-emission vehicle technology uptake.

 “Our message to the government is simple – give us a CO2 target that recognises market realities and we will give you the technology to meet that target,” Mr Weber said.

He said OEMs respond to markets with strong policies when allocating vehicle supply, particularly with the current supply issues in relation to EVs.

“At the moment, Australia isn’t sending any signals to manufacturers that say we are ready to do business,” he said.

“Car-makers are more ­likely to respond to markets where there is a carrot and a stick – CO2 target, incentives, tax offsets or potential penalties.

“Setting vehicle CO2 emissions will get Australia on the vehicle supply map internationally.”

That done, Mr Weber said there were issues that affected sales of EVs in the short term. These, he said, had to be taken into account before states and territories decided to mandate the banning of ICEs.

For example, he said the S&P research showed that there was a strong bias to sales of expensive EVs.

“It says that in 2030, overall battery-electric vehicle sales are estimated to be 18 per cent of the Australian market. Of this, 61 per cent of premium brand sales in Australia will be battery electric. But for the volume brands, it’s only 14 per cent of their sales.

“Premium brands only represented 12 per cent of the Australian market in 2021, while the volume brands were 88 per cent. Using this ratio, only 18 per cent of the market will be battery electric vehicles in 2030.

“These are the kinds of issues that need to be taken into account rather than just purely going out and banning ICEs.”

Mr Weber said that Australia’s ability to increase its EV sales would also be affected by our current buying preferences.

“One problem is that one in four vehicle sales in Australia are utes,” he said.

“By 2030, S&P estimate that only 1.18 per cent of utes will be battery electric.

“The reason for this is that utes in Australia are sourced primarily from Thailand and S&P do not believe that those factories in Thailand will be electrified in 2030. 

“That is because those factories also supply other countries, including South East Asia, where there is no regulatory requirement to have electrified vehicles.”

By Neil Dowling