Two pioneering manufacturers in the electric vehicle (EV) market, BMW and Nissan, have called on the Australian Federal Government to incentivise buyers of low-emission cars, citing evidence from Europe, Asia and North America.
BMW Australia boss Marc Werner teed off again this week, saying he was sick of carmakers and independent bodies “doing the heavy lifting” on EVs and hybrid vehicles, and calling the government short-sighted for not offering tax breaks to buyers.
The company currently offers a wide-range of plug-in hybrid and electric vehicles, headlined by the i3 and i8. Last year it achieved cost parity between its 530e PHEV and 530i petrol, albeit at the not-inconsiderable sum of $110,500.
It’s promising 25 low- or zero-emissions vehicles by 2025 globally, too. It’ll launch the iNext electric car with a 700km range in 2021 – in fact the Bavarian marque doesn’t call itself a carmaker anymore, preferring ‘technology company’.
In markets as diverse Malaysia and Norway, a majority of its sales are understood to be electrified vehicles.
“Here in Australia we continue to languish in the doldrums as senior government officials concentrate on their private affairs rather than formulating the advancement of our society,” Werner said, clearly seeking a headline.
He did compliment Energy and Environment Minister, Josh Frydenberg, whose January Fairfax op-ed ‘Stand by, Australia, for the electric car revolution’ caused ructions inside his own party, particularly from conservative factions.
Frydenberg has since been backed by Australia’s chief scientist, Dr Alan Finkel.
“I will say it was heartening to see the minister for energy, Josh Frydenberg, write an opinion piece in January citing that he expects to see the EV take up increase dramatically, with one million EVs on roads by 2030,” Werner said.
“While these targets are extremely light compared to other country’s targets, at least the government is thinking about the situation and a policy for lower emissions vehicles, and we commend the minister for his foresight.
“However, thinking about this is not enough, clearly not enough. We need to see some action here or Australia will continue to lag behind the rest of the world.
“If there could be any doubt in the minds of our country's leaders that they need to do something, anything, then they only need to take a look at the global auto industry.
“We need urgently to settle short- and medium-term support options to kickstart our market. Things like strong EV targets, CO2 emissions targets, extended charging infrastructure and tax incentives, all work in other countries, why not Australia?
“This will allow us to catch up, the world has given us 20 years notice that we are transitioning to EV. There’s no excuse for the government to ignore this opportunity.”
Australians get a reduced luxury car tax hit if they buy a low-emissions car over the ($65k base) price threshold but Werner wants to see stamp duty axed on these cars too, at least as a start.
Many countries, led by northern Europe, California and now China, also offer help – often in the form of direct subsidies – to kickstart the expensive technology, the theory being it’ll improve scale and drive down costs.
A United Kingdom scheme reimburses up to £4500 ($7777), while California has spent a reported US$449 million ($573m) on consumer rebates in seven years.
Norway places huge taxes on internal combustion cars but essentially waives them for EVs, essentially delivering the same results in the process.
France and Britain are also pledging to end new diesel and petrol sales by 2040. Norway and the Netherlands are aiming for the same thing by 2025, and China has indicated it will do similarly.
Werner is not alone in his strong sentiments. We spoke last week in Singapore with Nissan marketing and sales VP for Asia and Oceania, Vincent Wijnen, ahead of the local second-generation Leaf EV launch later this year, priced around $50k.
“In terms of adoption, the speed and acceptance is not only up to Nissan, at the same time I’ve seen it in many countries, where we sat there and waited, maybe one city starts and says they’re fed up, put in their own local incentives or regulation…
"You need a trigger, and I think they're very close,” he said.
“In Australia there’s much more talk and you've seen more brands invest, we’re not going to be the only ones, it’ll accelerate, and faster than a lot of people think.
“Previously you had range anxiety on top of affordability, being the purchase price, those things [range anxiety and reliability] are gone. We've sold 350,000 electric cars now and never had any big issues, and the range is close to a conventional engine.
“What are the barriers then? Can people afford the car? We can’t do this initially on our own, we need some level of support from government initially, the volume at the end will get the cost down, but the ignition has to happen in cooperation with other stakeholders.
“I was amazed when I first visited your country for work, last July, I always had this imagination you’re very green, very outdoor-focused, where quality of life is very very important, but this hasn't switched on yet.
“I don't think it’s a consumer issue, its an infrastructural one. If you had the option to choose, many many more people would choose. If you take your main population in metro cities, the willingness to move towards EV is there, it just needs to be made possible.”
We’re slowly getting there on the infrastructure front. The Queensland Government has announced plans to create an electric highway connecting the state’s north and south coasts, in an effort to encourage electric adoption.
The strategy is similar to that driving the ‘Electric Highway’ established by RAC Western Australia. Tesla is also constantly expanding its national Supercharger network.
Heath Walker, communications boss for Tesla Australia, has previously told us that: “I believe we’re the only first world country to have a tax and no incentives on electric vehicles, and despite there being some subsidies on Luxury Car Tax, it truly does hamper the cross-shopping when it comes to a choice between internal combustion engine and an electric vehicle”.
Another stakeholder is the Electric Vehicle Council, which claims to have been working with governments across Australia “to support and grow the market for electric vehicles in Australia”.
In other words, it’s a lobby group for the electric vehicle industry.
“Last year we joined several state and local governments in launching Electric Vehicle Strategies, and signed and delivered a cross-jurisdictional MOU to integrate EVs into government fleets,” Behyad Jafari, CEO, told us.
“Our priority this year is to deliver incentives to encourage Australian motorists to buy electric. As demonstrated around the world, some initial government support is required to deliver the societal, economic and environmental benefits of transitioning to electric vehicles.
“We’re calling on the Federal Government to start by providing tax exemptions to bring down the upfront cost of an electric vehicle. This ‘jump start’ provides certainty for further investment to develop infrastructure, increase model availability and create new businesses and jobs.
“Other incentives such as preferential lane access, free parking and tolls can then provide an additional short-term incentive.”
On the other side of the argument, you have the likes of Volkswagen Australia boss Michael Bartsch, who was quoted in local industry title GoAuto as saying that “I think it’s wrong. I think it’s fundamentally wrong”.
“Why should the public first pay for something? Why distort the market with incentives? I’m really against it. I think what should be allowed to happen is let the entrepreneurs, the capitalists, work it out.”
Vitally, the head of the car industry peak body, the Federal Chamber of Automotive Industries (FCAI), is opposed to what the likes of Werner want.
FCAI chief executive, Tony Weber, recently said direct EV subsidies were not something his organisation would chase.
“I think that the FCAI has a role in actually informing this debate, but I think it’s a technology neutral debate,” he told us.
“I don’t see that one form of propulsion should be subsidised over another, I think that what we need is a holistic approach to this, which the government needs to adopt and that includes fuel quality, when we move to Euro 6, and a CO2 standard.
“I think there’s a number of ways people can be incentivised to move to more efficient vehicles and what we need to do is make that transition so that the Australian lifestyle and the way in which we work, especially on farms and in the mining industry, is not adversely affected.
“So I think it needs to be a much broader approach than just subsidisation of EVs or fuel cells, I think it needs to be a holistic approach.”
We asked the BMW boss what he thought of Weber’s position. The response? A firm “no comment”.
This author’s view? Until the car industry gets its act together and unifies, the government is unlikely to move. Politically, more mainstream affordable electric cars will be required to get the public entirely on side, lest it appear we’re subsiding wealthy people looking for a BMW.
What do you think? Should subsidies or tax cuts on zero-emissions vehicles be applied in Australia? Or should it instead be charging infrastructure we fund? Is it just a case of letting the market equalise?