Written by Josh Clarke
The electric vehicle (EV) market in Australia continues its slow growth in market share as more Australia’s buy into plugging-in.
The Electric Vehicle (EV) share in international markets continues to push to new heights with more companies diversifying the market and in turn bringing down costs. On the other hand, Australia continues its slow growth in EV market share as more Australia’s buy into plugging-in.. Most countries with strong EV markets propagate this with subsidies, advertising, and consumer guarantees over their EVs. It is of note that Australia does not currently have any of these incentives at a federal level.
Comparing Australia and the EU
In 2021, electrical vehicle sales in Australia hit 20,665 units, comprising just two percent of total new cars sales. This is compared with 13 percent of fully electric in the EU and a further 25 percent being plug-in hybrids. Leading this push inside the EU and globally is Norway. The Scandinavian state is set to crush its targets and reach 100% EV sales by 2025 with nine out of every ten cars being sold already being an EV. Growth does not appear to be slowing internationally with a doubling of EV sales worldwide, year-over-year within just the first two months of 2022. Tesla and SAIC-GM dominate the market with the Tesla Models Y and 3 and the Wuling Hongguang Mini EV being the most sold cars by large margins.
The push for EVs is being driven by drastic changes in consumer choices around the world. The environmentally conscious consumers are buying electrical vehicles at larger and larger rates every year. Countries with progressive climate legislation are assisting their citizens to reach these aims.
The domestic situation
Domestically, the ACT remains further ahead than the rest of the country regarding EVs with 5.9% of the Territory’s new vehicle sales being electric. The main complicating factor for most Australians is that of range anxiety. Australia as a giant country needs a large amount of electrical vehicle charging stations to alleviate this anxiety. The Albanese Labor Government has committed to increasing EVs on the road with the Prime Minister’s target of 89% new vehicle sales being electric by 2030. The Minister for Climate Change and Energy Chris Bowen has pledged to match the NRMA’s commitment to more charging stations with them to be placed every 150km alongside the rural road network linking the large nation. The Government intends to remove the 5% import tariff on EVs which will reduce the cost by $2000 and remove them from the fringe benefits tax to encourage companies to buy them for their employees. This move is slated to reduce the costs by an expected $8700 per vehicle.
There is every incentive for Australians to dive into the renewable market for both a greener carbon footprint and a stronger Australia.
Opportunity for government and the mining industry
The electric vehicle market may bear fruit for the new government with the drive for rare earth minerals and further mining to supply the growing EV battery market. The International Energy Agency stipulates that an electric car requires six times the amount of minerals of a conventional petrol car, with lithium, cobalt, nickel, graphite, and manganese all being required in much larger quantities. This requirement is both a challenge and an incentive for the mining industry to support the growing EV industry and support consumer demand.
Without support and growth within the mineral industry this intense demand may make global progress towards the clean energy future slower and more costly. It is critical that the Federal Government and industry provides incentives so that the mining industry can support Australia to meet its EV targets, and also to grow its share of global sales of rare earth minerals.
Australia dominates the global supply chain of lithium with 48% of production, China is the main exporter of graphite, and the Central African country of the Democratic Republic of the Congo supplies the lion’s share of cobalt. Solely within these three minerals, the global scale of EV battery manufacturing becomes clear. Multinational companies and countries with large rare-earth mineral deposits need to be preparing already for the increase in the global demand.
The Vice-President of the European Commission stated that Europe will need 18 times more lithium by 2030 and 60 times more lithium by 2050 for EV batteries and energy storage. Australia is poised to benefit greatly from the increase in demand with 18% of the worlds share of lithium within its borders. However, China, Chile, and Argentina hold 75% of the world’s reserves with 48% in Chile alone. In order to compete and maintain Australia’s market edge in lithium production, government incentive and support of the industry’s growth should be maintained.
Australia has a lot to gain from increased electrical vehicle production from both domestic satisfaction, market growth and to increase Australia’s prominence as a renewable energy hub. Although the growth in market share for EVs has been slow in the past, there is every incentive for Australians to dive into the renewable market for both a greener carbon footprint and a stronger Australia.
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