New rules could save EV drivers $10,000: report
High-polluting internal combustion cars will peak in Australia by 2027 under federal Labor’s planned fuel efficiency standards, with industry research showing electric vehicles are set to make up as much as two-thirds of new sales by the end of the decade.
The federal government is preparing legislation to speed up the shift to more environmentally friendly transport in Australia by putting mandatory pollution caps on fleets of new vehicles sold by carmakers.
The policy is designed to encourage automotive brands to sell a greater range of electric vehicles into Australia, and could save consumers up to $10,000 over a car’s lifetime, according to research commissioned by the Electric Vehicle Council and the Climate Council
The research by Mandala Partners shows that strong fuel efficiency standards will help Australia catch up to economies including the US, EU and New Zealand on EV use, significantly boosting supply into the market.
Currently, about 8 per cent of new vehicles delivered to Australia are EVs
Under an ambitious model for the new rules, the report finds Australia could catch up to the US by 2027, followed by the EU three years later. It recommends Australia’s new standards match the EU until 2035, when all new vehicles will be required to be zero emissions.
The price for EVs would fall by an average of 2.8 per cent per year once the new standards come into force, driven by the falling cost of batteries, the report says, suggesting an effective standard would save consumers up to $10,000 over a vehicle’s lifetime.
The wider economic benefit would be up to $13.6 billion nationally by 2035.
Currently, Australian passenger vehicles emit as much as 50 per cent more carbon dioxide emissions than cars in similar countries overseas, primarily because older, less efficient cars not sold overseas are still driven on Australian roads.
More than 200 EV models are available for sale in Europe, compared with just over 50 in Australia. The disparity is described as “a significant market gap between Australia and our global peers” in the report.
Author and Mandala Partners managing director Amit Singh said the lack of compulsory and competitive standards was costing drivers.
“Australian motorists are paying more to drive our cars than we should have to because we don’t have strong standards in place,” he said.
“The argument that a strong fuel efficiency standard would make cars more expensive is a falsehood, as our research exposes. The numbers are clear – the savings consumers make on lower running costs more than outweigh any modest and temporary increase in the sticker price of a fuel-efficient car.”
He welcomed moves by the Albanese government to introduce Australia’s first fuel efficiency standard for new vehicles.
“This research should give them confidence to make sure the standard is compulsory and globally competitive, because that’s the best outcome for consumers.”
Passenger cars make up almost 10 per cent of total national emissions, which are legislated to fall by 43 per cent by 2030 on 2005 levels.
Transport is also the third-largest source of emissions in Australia, with the new strategy expected to help cut at least 3 million tonnes of carbon by 2030 and more than 10 million tonnes to 2035, according to the government.
Overseas, the transition to EV transport is speeding up. The US Environmental Protection Agency looks set to put in place pollution limits that could mean EVs account for up to two-thirds of passenger vehicle sales by 2032.
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