Australia is an ideal market for electric vehicles, yet sales on our island country are well below the benchmarks of Europe and the United States. Why? What has slowed the inevitable flow of electric vehicles into Australia and what can be done to open the flood gates?
We need to understand the benefits behind electric vehicles and the unique ways that those benefits play out in the Australian landscape. Amongst the environmental benefits of increased electric vehicle adoption is a long-term reduction to household living expenses. An Australian driving just 10,000km per year would save around $2,000 in running costs when switching to an electric car. Additionally, Australia is a country well suited to solar energy production so an increase in electric vehicle adoption would help ensure fuel security across the nation. Overall, electric vehicles come with a suite of immense commercial benefits as well as the known environment benefit.
All this on the table and adoption of electric vehicles in Australia is still behind. Evident barriers of adoption include:
Barrier #1 - High upfront cost
With a minimal second hand market for electric vehicles and a mid-range market upfront cost of around $55,000 per vehicle the price gap in Australia is still too high. Compare a petrol Mazda 3 G20 Pure at $29,668 and an electric Tesla Model 3 Standard Range Plus at $59,900 and you'll quickly notice the size of the gap.
The price difference is not as dark as it sounds though. Whilst the upfront cost of an electric vehicle is higher than a petrol vehicle the long-term savings are abundant. An electric vehicle is far cheaper to run and Vyro's electric vehicle savings calculator demonstrates just that. In addition to the lower running costs Governments around Australia are starting (albeit it was wanted earlier) to provide incentives to EV buyers. Residents in NSW can apply for up to $5,540 in incentives for new electric vehicles purchased from September 1, 2021. Additionally, the ACT and South Australia are well and truely underway with a range of incentives to promote EV adoption.
Barrier #2 - Availability
In 1997 the Toyota Prius became Australia's first electric-drive product. Whilst not a pure electric vehicle the Prius paved the way for a future of Australian hybrid and electric vehicles to come. Today, Australian's can choose from a humble range of electric vehicles but stock limitations often result in long delivery timeframes and limitations on what a customer can customise.
Fleet adoption has been sighted as a key way to unblock the demand for electric vehicles in Australia. Over 50% of new vehicles purchased in Australia each year are for business purposes. Increasing the adoption of electric vehicles amongst business owners in Australia will likely have a positive impact by incentivising manufacturers to increase the range available down under.
Barrier #3 - Charging infrastructure
"Range anxiety" is a common theme amongst consumers when considering to adopt an electric vehicle. It's a simple problem to understand, petrol stations are abundant but charging infrastructure is not.
Major highways are well and truely on their way to supporting consistent charging infrastructure with the NRMA setting a goal to have every highway in NSW and the ACT well equiped with publicly available charging infrastructure.
Additionally, Australian's are driving less. In May 2020, the total kilometres driven by Australians dropped by an unprecedented 70% with the impacts of COVID19 and work locations amongst the key contributors.
The time is right for Australian adoption of electric vehicles. Charging infrastructure and range anxiety are well on their way to being a none problem. Availability is growing and demand is naturally knocking down this barrier. What's left is affordability and more must be done to lessen the blow of the upfront cost of an electric vehicle. Finance options which help spread the cost over a period of several years are likely to support this by allowing the running cost savings to take their full effect whilst Government incentives and an inevitable second hand market sweeten the deal.