Reinstating EV subsidies key to market’s future: report
More support is needed to boost sales and match adoption rates of other developed nations, according to the peak industry body.
Electric vehicles are gaining a foothold in the market but the government must reintroduce purchase incentives and do more to combat misinformation to push adoption to “critical mass”, the peak EV industry body has urged.
The Electric Vehicle Council’s State of Electric Vehicles 2024 report, released Monday, showed nearly one in 10 vehicles sold this year was electric – a 150 per cent increase on 2022.
The report also said EV sales – battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) – were on track to hit 110,000 units by the end of the year.
It attributed the growth to the availability of several incentive programs, such as the “important and effective” fringe benefits tax exemption.
Chief scientist Jake Whitehead said the numbers showed a growing number of Australians were seeking cleaner, more efficient cars.
“This year’s gradual growth in EV sales and market share builds on the momentum of a blockbuster 2023, further driving the upward trend in BEV and PHEV adoption.”
But while “there are more EVs on our roads today than ever before and that is set to grow”, he said the pace of growth depended on the level of support from governments and industry.
The report said that over the past 18 months, the EV sector faced several setbacks and challenges, including the “premature” withdrawal of purchase incentives for EVs.
NSW, Victoria, Queensland and South Australia had offered a $6,000 rebate on the purchase price of new EVs to boost their adoption. They ended in 2023.
The EV Council warned that abrupt withdrawals risked “shocking the market” and called for them to be reinstated until “critical mass” was achieved – a threshold where the EV market could sustain itself without further government intervention.
According to the report, if current EV policies remained in place, market penetration could rise up to 19 per cent by 2026.
But if sales surpassed 30 per cent of the market or a target of 1 million EVs on the road was achieved, “the EV market is expected to sustain itself without the need for such financial incentives – in part due to the expectation that even greater uptake of EVs will be achieved in comparable markets, over the same time period”.
“To meet sales and carbon emission reduction targets set by these governments, the EVC strongly encourages all Australian governments to actively support EV uptake until at least 30 percent EV sales are achieved nationally and/or our recommended national target of 1 million EVs in the fleet is achieved,” the report said.
“Australian governments need to come back to the table and consider reasonable incentives to continue to drive uptake, including support for Australians to purchase used EVs.”
Aman Gaur, head of legal, policy and advocacy, said: “Australia has made progress, but it still faces a long road to match the EV adoption rates of other developed nations.”
“Governments should come back to the table and consider reintroducing and expanding reasonable purchase incentives to drive EV adoption to a critical mass, including support to purchase second-hand EVs.”
Gaur also called for “stronger efforts” from the government and industry to combat misinformation about EVs.
Persistent misconceptions include concerns about battery life, charging infrastructure and safety, often spread by traditional vehicle and oil companies in their campaigns, according to experts.
“[Misinformation] undermines public support and hinders the transition,” Gaur said.
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