Smart Energy Council submission to the National Electric Vehicle Strategy Consultation Paper

The Smart Energy Council welcomes the opportunity to provide a submission on the National Electric Vehicle Strategy (the Strategy) Consultation Paper.

The Smart Energy Council (SEC) is the peak independent body for Australia’s smart energy industry, representing around 1000 household, commercial and large-scale renewable energy, renewable hydrogen, and smart transport companies.

The SEC believes we can have a strong economy and a safe climate. Electric vehicles will play a critical role in achieving that vision. With the right policy settings, we can almost eliminate transport emissions, whilst creating employment and economic opportunities through a strong electric vehicle industry.

Electric vehicles will play a critical role in the energy grid of the future, operating as batteries on wheels and providing critical grid support.

Context

The SEC strongly supports the Australian Government’s draft National Electric Vehicle Strategy, noting it can be improved through amendments suggested below.

The SEC is heartened to see the pace with which this strategy consultation was released so soon after the National Electric Vehicle Summit, hosted by the Smart Energy Council, Electric Vehicle Council, The Australia Institute and Boundless in August 2022. We’ve been looking forward to this paper and to the Government’s proposal for introducing fuel emissions standards.

This work is a key piece of SEC’s broader agenda to electrify everything with renewable energy and other smart energy systems, and of course support genuinely renewable hydrogen for use in industry, some transport and other areas of the economy where electric storage is not yet feasible.

Scope

The SEC has provided comments on the Strategy’s discussion points where these

• Impact on the commerciality of our members’ provision of goods and services
• Have relevance to SEC’s national agenda of smart energy advocacy
• Impact on SEC’s achieving its stated mission – to better environmental protection outcomes.

Key Points

Critical to the success of the Strategy must be strong national fuel efficiency standards. These must be consistent with leading fuel efficiency standards such as those set by the European Union.

The Australian Government must work with state, territory, city and key regional local governments to ensure a coordinated rollout of a comprehensive charging network for cars, trucks and buses, ensuring that no-one is left behind.

The SEC also believes the Australian Government should set a target of 1 million electric vehicles on Australian roads by 2027.

The SEC has classified our additional feedback into four priority areas.

1. Broaden goals and objectives

To be consistent with our nation’s climate action, energy security and energy performance agendas, we need this Strategy to prioritise EV (batteries on wheels) grid connection. We recommend revising the goals and objectives to ensure the Strategy explicitly aims to provide essential energy storage infrastructure for Australia’s energy system through enabling the rapid uptake of EVs and their useful and coordinated connection to the grid.

Smart transport – the integration of electric vehicles into the energy grid of the future – must be at the heart of the Strategy.

Given the rapidly changing pace of the EV and smart energy systems marketplace, it’s important that performance against this Strategy is regularly measured and the goals and objectives revised.

2. Drive affordability and accessibility

There are a number of complementary measures that when executed in a coordinated fashion shall deliver least cost and effective national strategy. These include:

I. Ambitious and effective vehicle fuel efficiency standards for light vehicles operationalised no later than January 2024, that create a level playing field at home for new and used cars and improve supply of EVs to the Australian market.

II. Government backed finance solutions to address complex areas such as EV charging for low income earners that are renting or residing in public/community housing, to co-invest alongside private investors and help to de-risk early stage commercialisation or to address large capex barriers that exist with the purchase of a new EV. Incentives should be temporary and be applied mindful of the principles of inclusive access for all and long-term sustainability of the industry.

III. Clear targets for all vehicle categories – although not binding, they provide a common understanding of the direction and pace of public policy and facilitates smoother investment and business decision making. Targets for passenger vehicles may be more ambitious than those for heavy vehicles and this is necessary because the market conditions for these differ across vehicle categories.

IV. Government fleet procurement targets such as those proposed by the Commonwealth, except that eligible vehicles must only include battery only electric vehicles (BEVs) to help increase the supply of second hand vehicles and establish existing import arrangements and relationships.

V. Incentivise commercial fleets to go electric including through tax concessions and/or revised accounting rules.

VI. Support for second-hand vehicles such that they are considered parallel imports with new BEVs and are subjected to the same import tariff relief measures, and fringe benefits tax concessions for fleets.

VII. Break the hold that original equipment manufacturers (OEMs) have on maintenance and servicing, and ensure charging and APIs (Application Programming Interfaces) are fungible to support accessibility for charging.

3. Strengthen value chain competitiveness

Recent global shocks and strains including the Covid19 pandemic and the impact of war on commodity prices has shown us how vulnerable our nation is when reliant on international value chains. Given Australia’s own EV marketplace is nascent, there is enormous potential for the Government to support a local manufacturing sector. It is also an exciting and enormous opportunity for Australian industry and workforces and provides an opportunity for the Government to revitalize communities where car manufacturing has previously been housed, and also potentially position Australia as an exporter of EV components for the booming EV market internationally.

I. The early investment by governments in downstream supply infrastructure, including local manufacturing of EV, charging and battery components and assembly, is central to supply chain security and reliability.

II. Government co-investment in processing and refining of upstream critical minerals is also a critical priority for economic productivity and international competitiveness.

III. The tax treatment of EVs – import tariffs, fringe benefits tax exemptions for fleets, fast right downs – will play another important role in strengthening value chain competitiveness across new and second hand EVs.

For more information about the full paper, please click here.

Should you wish to discuss these matters further, please contact Wayne Smith, External Affairs Manager, on 0417 141 812 or at wayne@smartenergy.org.au