“Reflection on reality”: Labor wants small business to make the switch to electric vehicles

Federal Labor wants half of all Australian vehicles to be electric by 2030 and will help small business make the switch by offering immediate depreciation deductions on vehicles valued at more than $20,000.

Unveiling his long-awaited climate change policy on Monday, Opposition Leader Bill Shorten threw down the gauntlet to the coalition ahead of the budget tomorrow, saying they’ve failed to develop any “serious” climate change policies.

Labor wants the Australian economy to be 50% renewable by 2030 and has set an electric vehicle target to tackle the 20% of emissions currently attributed to transport.

“The global transition to EVs [electic vehicles] is well underway, but Australia lags behind other countries in EV take-up due to the Government’s failure to put in place credible climate change and EV policies,” Labor said on Monday.

“Australia is now last among western countries for electric vehicle take-up, and New Zealand has more electric vehicles than Australia.”

Analysis conducted by Energia in 2018 found electric vehicle market share in Australia is less than 1%, compared to almost 5% in New Zealand and more than 15% in Norway.

Moving to 50% over the next 11 years would have a significant effect on most industries, particularly mechanics, freight businesses and sharing-economy companies.

Under the plan, Labor will introduce a vehicle emission standard, forcing car retailers to sell light vehicles which create a maximum of 105 grams of carbon dioxide per kilometre.

The policy won’t apply a “blanket mandatory standard” and will allow retailers to offset high emission car sales with low or zero emission sales, Labor said.

Labor did not specify a standard for heavy vehicles, conceding “there is currently no commercially viable alternative” to combustion engines for trucks and other similar vehicles, but did say it will encourage trucking operators to upgrade to modern, less-polluting vehicles.

In Norway, electric vehicles make up about half of all new car sales, prompting Labor to cite PwC research that a similar uptake rate in Australia could generate $2.9 billion in economic activity.

Electric Vehicles Council data indicates electric vehicles can deliver more than $2,000 in annual cost reductions for businesses through reduced fuel and maintenance costs, however, a lack of charging and parking infrastructure in Australia is holding back market development.

Labor wants to address this and says it will require all federally funded road upgrades to incorporate charging infrastructure while pressuring states to follow suit with their own projects via COAG.

A used electric-vehicle market will also be supported by a swathe of publicly owned vehicles if Labor gets its way, with plans to target 50% of new government vehicles to be electric by 2025.

Businesses in Australia have already started moving on electric vehicles, with IKEA Australia revealing a plan to roll out electric trucks over the next decade.

Overseas companies such as Pepsi, Walmart and FedEx have all invested in pre-orders for Tesla electric and autonomous semi-trucks, which will go into production later this year.

Tom Davey, chief executive of car share business GoGet, says electric vehicles are the future but to date haven’t been viable for his business.

“Our 3,000 vehicles take more than 30,000 private vehicles off the road reducing congestion and emissions,” Davey tells SmartCompany.

“We believe this focus does more for the environment and congestion than simply replacing the petrol car with the EV on a one-to-one basis.

“For EVs to work for car share, there needs to be mainstream market adoption that makes them competitively priced and widely accepted.”

The NRMA’s Peter Khoury says Australian businesses don’t really have a choice when it comes to adopting electric vehicles in the coming years.

“It’s just a reflection on reality. What we’re seeing globally is more and more countries announcing bans on petrol and diesel cars,” he tells SmartCompany.

“A lot of those countries manufacture cars Australians like to buy — we don’t build cars here.”

Khoury says business will benefit as well, with demonstrably cheaper costs and an ability to build their own charging stations.

However, Australian Automotive Dealerships Australia, the lobby group representing independent car dealers, is worried the emissions standard will hurt small business.

“We accept the Opposition’s invitation to consult on the timeline and coverage of vehicle emissions standards, but are concerned over the reference to these standards applying to car retailers,” chief executive David Blackhall said in a statement circulated on Monday.

“In the US and the EU, it is the manufacturer, not the retailer, that needs to adhere to vehicle emissions standards,” he said.

“Dealers have limited influence over the product mix and the decision as to what cars are imported into Australia is entirely at the discretion of the manufacturers. In the end, dealers can only sell the cars that are supplied to them.”

Council of Small Businesses of Australia chief Peter Strong says moving to 50% electric vehicles would create opportunities for small business, but needs to be managed appropriately.

“If it is done without deep planning and assessment of risks and impact upon the way businesses operate it could have a detrimental effect on the economy,” he tells SmartCompany.

“It will cause a major change for the automotive industry and there will probably be the need for an industry restructuring program.”

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