November 16, 2022

Take me on – How governments can help the electric car revolution

The world is in the middle of an electric vehicle revolution, so why is Australia lagging behind?

By Nicholas D’Alonzo

It really does feel like we are in the middle of an electric car revolution, where it seems automakers are announcing new models every day. Many people will point to the success of Tesla as starting this trend but the history of electric cars is far longer. With cars like the Chevrolet Bolt and the Nissan Leaf having existed before Tesla became the juggernaut it is now. Governments around the world are looking for ways to encourage people to buy electric cars to help reduce carbon emissions. However, some governments have been more proactive than others. 

In Norway in 2021, 65 per cent of car sales were electric (1) and that figure has only increased in 2022; petrol only cars have all but completely disappeared from the sales figures. (2) We will explore how they have achieved this feat even as electric cars are still in their infancy and often very expensive. Norway is not alone; we are also seeing a push from the UK (3) and European union (4) to phase out petrol cars. While China has been at the forefront of electric car manufacturing (5) and has some of the best electric car infrastructure in the world. (6) We will discuss what lessons Australia can learn from them.

Norway’s path to the electrification of transport starts 30 years ago, when members of the pop group A-ha best known for the song “Take On Me” bought an electrically converted Fiat Panda in Switzerland. (7) They imported it illegally to Norway, partially because Norway didn’t have the option to register electric cars. (7) They then proceeded to ignore regulations around car registration and toll roads. (7) This was obviously met with resistance by the government who confiscated the car on several occasions. (7) The car would then be put up for auction and the band would always buy it back again, mainly because it was a small two-seater car with a 46 km range and no one else wanted it. (7) Through this act of activist defiance, they changed the way Norway treated electric cars and paved the way for Norway’s path to electrification decades later.

The Government eventually gave into the antics of A-ha and removed import tariffs, car registration, and toll road charges on electric cars. (7) In 1996 this would have been a quirky, mostly unused law as the number of electric cars at that time was effectively non-existent, just a very small locally built city car called a Think City. (8) That changed 15 years later with the release of the Nissan Leaf and from there the number of electric cars in Norway exploded. To the credit of the Norwegian government they expanded the perks given to EV users instead of restricting them. They were given free city parking, often with priority EV parking, access to bus lanes and reduced company car tax. (7) The exemptions from the government chargers were large enough to close the gap between petrol and EV versions of cars, which were typically about $20,000 more. (2) This made the electric versions more popular than their petrol versions.

While Norway’s success is certainly creating headlines, they are not the only country that has been effective in generating momentum for the electric transport revolution. Due to China’s rapid economic rise and the growth of its middle class, private car ownership exploded in popularity. (9) However, that brought with it the downsides of congested cities and horrific pollution. (10) To deal with this, city governments put extreme restrictions on car registration, which are either very expensive or on a lottery system. (11) To encourage the uptake of electric cars, electric cars get exemptions from these restrictions. (12) There are also subsidies to help people afford electric cars, although China did plan to phase those out. (12) This has resulted in car companies producing electric city cars, with short ranges and low power, basically enclosed golf carts, but extremely useful in crowded Chinese cities. They are cheap to make and with subsidies were very cheap to buy as well. These cheap cars broke from the idea that electric cars are only for the rich. (12)

However, there is more to preparing a country for electric cars than just making them affordable for people. There is a whole lot of infrastructure you need to build to support them as well. When we are talking about a country with as many people as China that means a lot of electric chargers, 65 per cent of all public EV charging stations worldwide even. (13) There are also rules around apartments providing chargers for all car spaces. Quite simply there is no range anxiety or charger anxiety in China, because they put down the money to build the charger network that was needed and they have done so in advance of the electric car completely taking over. (14)

The final piece of China’s electric car strategy is the manufacture of electric cars in China. China has long lagged behind east Asian neighbours in car sales with even Chinese buyers preferring foreign cars. (6) The electric vehicle revolution has given the Chinese manufacturing of cars the chance to leapfrog their neighbours. To support this, China has an incentive program for electric car sales that falls onto the manufacturers rather than buyers. (15) (16) Manufacturers have to reach a certain number of EV sales each year and if they can’t, they must pay their rivals for EV Credits. (15) (16) Those credits at first went to Tesla which helped it to reach the level of global dominance it has today. (16) However, Chinese manufacturers such as start-up rivals Xpeng and Nio or government owned companies like SAIC (MG and LDL) and JAIC, to existing car companies Great Wall Motors (HAVAL and ORA), BYD and Geely (Polestar and Volvo) and many more have all stepped up to the plate to provide affordable EVs to Chinese customers funded by this credit system. (16)

The rise of EVs in countries such as Norway and China has not actually been driven completely by huge government subsidies but instead by removing government on-road costs such as registration, import taxes and toll road charges. This was enough to close the gap on the costs of buying and owning an electric car to get the ball rolling. In Australia we are seeing the opposite happening, with states such as Victoria and South Australia enacting EV taxes (18) and Western Australia phasing one in. (19) There is also the importance of preparing the ground with having enough chargers available both publicly and at home, which we are starting to see in WA with the electric highway (20), but it will require far more to match what is required. And finally, there is the EV sales quota. We are unlikely to be able to revive Australia’s car industry but we could attract far more EV models to Australia if we required manufacturers to sell or at least provide the option to buy an EV. These kinds of compliance requirements have been established in California and are also in China. (21) It is time to move Australia from the last place that companies look to sell their EVs to the first place they do.

The story of the defiance of A-ha leading to changes in a government’s policies, to decades later making them a world leader really shows how seemingly small-scale activism can have a knock-on effect resulting in a changed world. I think it is important to remember that as we fight for more action on climate change. 

References:

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  3. Government, UK. Government takes historic step towards net-zero with end of sale of new petrol and diesel cars by 2030 . UK Government. [Online] UK Government, 2020 November 2020. https://www.gov.uk/government/news/government-takes-historic-step-towards-net-zero-with-end-of-sale-of-new-petrol-and-diesel-cars-by-2030.
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  8. Trend, Energy. Electric Vehicle Maker Think Builds 2500th World’s Best-selling City Model. Energy Trend. [Online] Trend Force, 12 october 2010. 
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  10. Zhou, Karen Ho and Youyou. China is beating back traffic in its most congested cities. Quartz. [Online] Go media, 1 March 2018. https://qz.com/1217257/china-is-beating-back-traffic-in-its-most-congested-cities.
  11. Economist, The. Why a licence plate costs more than a car in Shanghai. The Economist. [Online] The Economist, 19 April 2018. https://www.economist.com/china/2018/04/19/why-a-licence-plate-costs-more-than-a-car-in-shanghai.
  12. Baraniuk, Chris. China’s electric car market is booming but can it last? BBC. [Online] BBC, 11 October 2022. https://www.bbc.com/news/business-62825830.
  13. Sickels, David. China has 65% of public EV charging stations worldwide. The Buzz. [Online] AMN, 17 August 2022. https://www.thebuzzevnews.com/china-public-ev-charging-stations/.
  14. Xu, Selina. This Chinese Province Has More EV Chargers Than All of the US. Bloomberg. [Online] Bloomberg, 22 October 2022. https://www.bloomberg.com/news/articles/2022-10-22/this-chinese-province-has-three-times-more-ev-chargers-than-all-of-the-us.
  15. Stauffer, Nancy W. China’s transition to electric vehicles. MIT News. [Online] MIT, 29 April 2021. https://news.mit.edu/2021/chinas-transition-electric-vehicles-0429.
  16. Yang, Zeyi. How China’s quasi-carbon market for electric vehicles works . Protocol. [Online] Protocol, 6 September 2021. 
  17. Tarantola, A. China’s emergence as an EV powerhouse has been a long time coming. Engadget. [Online] Engadget, 23 August 2022. https://www.engadget.com/chinas-emergence-as-an-ev-powerhouse-has-been-a-long-time-coming-145429852.html.
  18. Harmsen, Nick. South Australia adopts electric vehicle tax, joining New South Wales and Victoria. ABC news. [Online] ABC, 28 October 2021. https://www.abc.net.au/news/2021-10-28/sa-adopts-electric-vehicle-tax/100576568.
  19. Davis, William. New electric car taxes and rebates revealed for Western Australia. Drive. [Online] Drive, 11 May 2022. https://www.drive.com.au/news/new-electric-car-taxes-and-rebates-revealed-for-western-australia/.
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  21. IEA. Pollcies to promote electric vehicle deployment. Paris : IEA, 2021.
  22. Photo by CHUTTERSNAP on Unsplash