With rising gas prices and the impact of climate change, many people are likely to wonder if their next car shouldn’t be all-electric. Yes, the initial costs are usually higher, but what does the future hold for us? Will prices go down over the next few years, and what costs do you need to consider when making your decision? The unfortunate truth is that, unless policies change in Australia, we should not expect a significant increase in the number of electric vehicles (EVs) available to Australians over the next few years. It is important that we all start moving towards this cleaner technology, but unfortunately, this option is not available to many Australian families and businesses due to a lack of local support policies.
Electric vehicles in Australia currently cost A$15,000-20,000 more than petrol or diesel vehicles. But in some market segments, such as sub-premium sedans ranging from $60,000 to $75,000, they are already at par. Several manufacturers have promised to bring more deliveries to the Australian market in 2022, but many of these vehicles were due here in 2021 (with delayed arrivals). With petrol prices currently in excess of $2 a litre, many Australians will have to pay over $2,000 a year for every car they own.
Electric vehicles can be recharged for about $0.20 per litre, or even less if you use home solar power. These savings add up to more than $20,000 over the life of the vehicle. Electric vehicles are cheaper to maintain and in some cases require no maintenance costs. This is equivalent to potentially thousands of dollars saved over the life of the car.
Wherever you have access to a standard socket, you can charge your electric vehicle. Since cars are parked 90% of the time and mostly drive less than 50 kilometres a day, a couple of hours of charging is sufficient for most people. If you need faster charging, you can install a wall charger in your garage. And if you’re parking on the street, you can use the growing list of public fast-charging stations around the country, or ask for a charger to be installed at your workplace.
However, the reality is that unless the policy environment changes, we can expect the Australian EV market to remain the same this year and for many years to come. This means many Australians will have no choice but to keep buying expensive imported fuel instead of using cheap Australian energy to power our cars. One of the downsides of Australia is that we are a right-hand drive market, and many European and American electric cars are not made that way. The UK is also a right-hand drive market, and people have the same average income and quality of life as Australia. But the EV market is quite different, with more than 160 EV models, compared to about 50 in Australia.
The key difference is that in the UK, the (conservative) government has embraced the technology and understands the wider economic benefits of making it easier to buy and use electric vehicles. Yes, Australia has upgraded its EV charging infrastructure, but it’s not enough to encourage manufacturers to bring more models to the country (which will help bring more affordable EVs to market). What would the Australian market look like if we had supportive policies?
Well, about 80 million cars are sold every year in the world, of which about 1 million are in Australia. Thus, we occupy about 1.3% of the global automotive market. In 2021, about 6.6 million electric vehicles were sold worldwide. So 6.6 million x 1.3% equals about 85,000 vehicles.
If our market followed global trends, 85,000 EVs should have been sold here last year. But in reality, just over 21,000 EVs will be sold here in 2021. So we are about a quarter less than we should be. There is a lot of demand for electric vehicles in Australia and we can’t supply enough because we don’t have the right policy settings.
Some say it’s to subsidise the wealthy, but sound policies will support jobs in Australia’s energy market. It is estimated that we spend more than $30 billion a year on foreign fuel for our cars. Repurposing the money to power electric vehicles will help keep billions of dollars in the country and support local energy jobs in Australia.
That’s why people say that Australia is a dumping ground for illegal cars that are sold overseas. Markets that have fuel efficiency standards receive all EV deliveries.
So, what are the prospects for the market? In Australia, little will change unless policies change. We are competing with markets that have the right policies to encourage sales of electric vehicles.
Manufacturers, of course, will give priority to deliveries there. Australia will see a slight increase in electric vehicle sales each year. But it will take several years for the supply of these new cars to increase.