‘It’s been a challenge’: Bowen admits drivers slow to switch to EVs

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Accelerating the take-up of electric vehicles to the rate needed to meet Australia’s emissions reduction target will be a challenge, Climate Change and Energy Minister Chris Bowen has admitted, conceding that drivers have been slow to switch.

Electric vehicles need to make up 85 per cent of car purchases in 2035 for Australia to meet even the lower end of its new emissions target, putting pressure on the Albanese government to maintain costly incentives for EV adoption and drastically increase investment in charging infrastructure.

“It’s been a challenge, because you can institute a reform now, with the average length of service of an Australian car being, you know, well into a second decade,” Bowen told the ABC’s 730 Report.

“So you buy a car today and it’s operating for 15 or more years and so it takes time to turn that around.”

Bowen argued the government’s vehicle efficiency standards meant a far greater range of EVs were coming onto the Australian market.

“That range is increasing dramatically,” he said.

“Also, our electric vehicle tax cut has been really driving high take-up but, of course, I’m not here to pretend to you that that has all of a sudden impacted on emissions. It is going to take quite a while for it to have the full impact on our emissions.”

The Albanese government on Thursday committed to reducing national greenhouse gas emissions by 62 to 70 per cent on 2005 levels by 2035, in line with the recommendation put forward by the Climate Change Authority last week.

Electric vehicles make up just under 10 per cent of new cars sold in Australia.

But the published advice from the independent authority, chaired by former NSW Liberal energy minister Matt Kean, states even the lower end can only be achieved if half the light vehicles – cars, motorcycles, SUVs, vans and utes – sold in the next decade are electric.

Electric vehicles – including battery EVs and plug-in hybrids – are just over 10 per cent of the light vehicle market today, the Electric Vehicle Council says. Australia would require EV purchases to ramp up to 85 per cent in 2035 to match the authority’s calculations.

That is in tension with the government’s plan to introduce some form of road user charge for EV drivers, who do not have to pay the petrol excise tax that other motorists endure, and calls for generous tax benefits for leasing electric vehicles to be wound back.

The transport sector is the nation’s fastest-growing source of emissions and is set to become the largest by 2030.

Bowen told reporters earlier on Thursday the government had no EV sales target, but said Labor would support choice through its vehicle efficiency standards and investments in charging infrastructure.

“We want Australia to have more choices, and our new vehicle efficiency standard is driving that very well,” Bowen said.

“The number of EVs that will be available to Australians over the next 12 months is about to explode.”

The government announced $40 million to support public charging infrastructure on power poles, and said it would review the vehicle efficiency standard in 2026.

Alison Reeve, energy and climate program director at think-tank Grattan Institute, said the vehicle efficiency standard worked on a fleet average. A car manufacturer had to achieve a certain standard across all its vehicles, so to bring in a gas-guzzling utility truck it would either have to sell enough hybrids and electric vehicles to compensate or buy credits from a competitor.

She said the goal for EVs was high but achievable, pointing out that EVs’ market share had already more than doubled from 2022, when it was about 4 per cent, to 2024.

“As long as you get the logistical side sorted so that you don’t have too many people who are facing that charging barrier, then, yeah, I think you can do it,” she said.

Reeve said the charging infrastructure announcement was a good plan to encourage EV adoption by people living in houses and apartments without off-street parking, including renters.

Rewiring Australia chief executive Francis Vierboom said the government should consider extending its successful Cheaper Home Batteries program to electric vehicles because vehicle-to-grid charging capacity would mean the family car could be used as a solar battery in the same way as a household battery.

“The subsidy scheme that’s being applied to home batteries, you’d get even more bang for buck when you apply that to the battery on wheels,” Vierboom said.

“It’s not usually environmentalists who are running around telling everyone to go and buy a new car, but it’s one of the important environmental steps people can take over the next couple of decades.”

The Climate Change Authority anticipates that 85 per cent of passenger sales of light vehicles will be fully electric by 2035, and 75 per cent of commercial vehicles. The rest would be a mix of internal combustion engine, conventional hybrid and plug-in hybrids. This would result in more than 5 million EVs that would otherwise have been petrol and diesel vehicles by 2035, the report says.

The authority’s advice to the government said the cost of EVs was expected to be comparable with internal combustion engine vehicles late this decade or early in the 2030s.

One of the biggest incentives for EV adoption has been an exemption from fringe benefits tax for novated leasing, which The Australian Financial Review has reported could cost more than $23 billion – far more than originally budgeted – over the coming decade. Shadow treasurer Ted O’Brien has campaigned against it, while Productivity Commission chairwoman Danielle Wood told the Press Club in August it should be wound back.

Modelling released on Monday, commissioned by the Electric Vehicle Council, the National Automotive Leasing and Salary Packaging Association and the Australian Finance Industry Association found carbon emissions would be 50 per cent lower by 2035 if the exemption was maintained.

The nation’s treasurers agreed earlier this month to charge EV drivers for their use of the country’s roads but claimed it would be done in a way that would not discourage purchases.

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