• A new report outlines the factors that could enable Australia to reach a “turning point” in the uptake of electric vehicles.
• Evidence shows that increasing access to technology like electric charging stations “is much more effective than subsidising consumer purchases to promote EV sales,” the report says.
• Australian state governments have proposed taxes on EVs that advocates in the sector say are holding the country back from catching up to the rest of the world.
• Visit Business Insider Australia’s homepage for more stories.

If technology accelerates, Australia could reach a “revolutionary turning point” in its transition to zero-emission vehicles, according to a new report.

The report from the Motor Trades Association of Australia (MTAA) outlines the challenges facing the country’s automotive industry, amid significant roadblocks from proposed state EV taxes.

Bucking the global trends toward quickening uptake of zero emission vehicles, Australia’s ability to purchase and use electric vehicles continues to be hamstrung by high prices and proposed taxes by the states and territories.

Australia lags significantly behind the rest of the world’s EV uptake, with only 0.75% of new cars sold in Australia in 2020 electric vehicles. This is compared to 8.1% in the state of California alone, and 10.7% in the UK.

The Victorian government recently put forward a plan that will make electric vehicle drivers pay by the kilometre, a measure critics have said will kill the market — the take-up of electric vehicles in Victoria is currently a miniscule 0.7% — before it has the chance to become established. NSW has also flagged it was considering imposing a distance-based tax on electric vehicles.

In its first major review of the industry in four years, the MTAA said that looking beyond the disruptions of the pandemic, structural change was already emerging.

It reported that while Australia’s electric vehicle uptake is low, “ongoing technological advancements and economies of scale may bring about a quicker-than-expected price advantage for electric vehicles.”

If technology advances, “this may sway many consumers towards purchasing EVs very quickly.”

The association also reported that the shift towards electric cars will bring structural change and pose significant challenges to the sector, however government intervention could have a major impact on outcomes.

It found that the shift to electric cars would require “significant investment from dealers and automotive workshops in both equipment and skills training.”

“Governments have a duty and obligation to understand the major changes and impacts that electric vehicles will have on Australia’s automotive industry and broader community,” the report reads.

“This would allow for long-term planning that oversees the transition of the industry and mitigate any employment and business losses within the community.”

The report cited recent analysis on the uptake of electric vehicles in China, Norway and the United States that show from the perspective of cost effectiveness, investing in technology that encourages EV uptake like electric charging stations “is much more effective than subsidising consumer purchases to promote EV sales.”

It also found that apprehension among consumers and businesses about whether the Federal Government would impose its own tax regime on low emission vehicles on top of the state levies already being designed was hurting confidence.

“If double dipping occurs,” the report said, referring to federal and state taxes, “this will create a major disincentive for the purchase of electric vehicles.”

The report reiterated messaging already coming from EV advocates and industry groups that “the automotive industry has a key role to play in the sustainability of our environment through reductions in greenhouse gas emissions.”

It suggested that by 2030, battery electric vehicles could comprise up to 26% of new vehicle sales in Australia — a factor that should shape future policy.

The report also suggests electric vehicles could be “the catalyst that significantly alters or dispenses with the existing dealership network in Australia,” with the supply of electric vehicles directly from the manufacturer to the consumer.

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