Subsidies for new car buyers who opt to go electric look set to become a major sticking point ahead of the 2018-19 Federal budget.
Minister for the Environment and Energy, Josh Frydenberg, has suggested the Turnbull Government could provide additional incentives for electric cars, citing a massive rise in the uptakes of EVs as a possible outcome.
In 2017 battery-powered vehicles made up less than 0.1 percent of Australia’s 1.1 million new car sales, with the popularity of conventional-engined overtaking passenger cars in Australia for the first time.
But Mr Frydenberg has suggested as many as one million electric cars could hit the road by 2030, telling ABC Radio electric cars will revolutionise transport in Australia.
“This is a very exciting space, we are living the decade of disruption,” he said.
“There is global momentum around electric vehicles and I think they will be to the transportation sector what the iPhone has been to the communication sector”.
Mr Frydenberg suggested there may be room for “future activities to support low emissions vehicles” and described the government’s existing support as “significant”.
Under current guidelines Australia buyers are able to save up to $3442 as part of a low-emissions threshold applied to vehicles that would normally luxury car tax added, federally funded finance available through the Clean Energy Finance Corporation.
The Energy Minister told the ABC that sales of electric cars were held back by a lack of accessible charging infrastructure in Australia.
“We will continue to talk to the industry, but what we need to see is some of the infrastructure issues resolved because when people come to make a decision about the vehicle they purchase, they want to be sure that if they do purchase an electric vehicle, that they can plug it in when they go on a long road trip and the infrastructure is consistent through the country,” he said.
The Australian reported on Monday that Frydenberg faces a backlash from coalition colleagues who do not share his views on electric car subsidies.
NSM Craig Kelly told the newspaper “the risk here is you’ll have the rich person in Balmain buying a Tesla, subsidised by a bloke in Penrith who’s driving a Corolla”.
Victorian MP Tim Wilson told Sky News Australia he believes subsidies are not the answer.
“Technology is going to make the future awesome but I don’t believe in subsidies,” he said.
“The government isn’t arguing for massive subsidies that underlie the profits of massive multinational companies.
“We want business to stand on its own two feet, particularly in an area as disruptive as electric cars.
“We shouldn’t be backing winners, particularly when we are not even sure they are going to go to market in a way that we want.”
Senator Janet Rice, Australian Greens transport spokesperson, said it is “time for real action to drive the uptake of electric vehicles”.
“Forward-looking countries like Norway, the Netherlands and India are aiming for 100 percent of new car sales being electric by 2030, while Turnbull Government MPs bicker about the need for policy action on clean cars,” she said.
“It’s time for the Minister to get us on track, and show those pulling the handbrake within the Coalition that we can be a global leader in clean, smart transport policy.”
A Greens spokesman told TMR the party’s policy surrounding cars is being updated.
Greens Leader Richard Di Natale sought to establish a $151 fund for electric vehicle infrastructure, and to waive registration costs for the first five years of electric vehicle ownership as part of an election campaign in 2016.
Electric car subsidies came to the fore this week following the emergence of reports that British industrialist Sanjeev Gupta was considering using part of Holden’s former manufacturing site in Elizabeth, South Australia to build electric cars.
Frydenberg says he has spoken with Gupta, who has previously invested in South Australia’s industrial sector, about a number of issues, but wasn’t able to confirm what plans Gupta had for the Elizabeth site.
“He has got a lot of plans,” Frydenberg said, “I don’t know how advanced a lot of those plans are.”