Modern Australian
Men's Weekly

.

Who's holding back electric cars in Australia? We've long known the answer – and it's time to clear the road

  • Written by John Quiggin, Professor, School of Economics, The University of Queensland
Who's holding back electric cars in Australia? We've long known the answer – and it's time to clear the road

New analysis this week found strong fuel efficiency standards would have saved Australia A$5.9 billion in fuel costs and emissions equal to a year’s worth of domestic flights if the policy was adopted in 2015.

The finding, by think-tank the Australia Institute, puts further pressure on the new federal government to bring our fuel efficiency standards in line with Europe and other developed nations.

Unlike other comparable countries, Australia does not have fuel efficiency standards for motor vehicles. On the face of it this is puzzling; aside from lower costs for motorists and fewer emissions, the policy would also decrease our reliance on imported oil.

But opposition from vested interests – including oil refineries and the car dealership industry – has held Australia back. The onus is now on the Albanese government to enact this obvious and long overdue policy which is crucial to the electric vehicle transition.

smoke blows from tailpipe
Unlike other comparable countries, Australia does not have fuel efficiency standards for motor vehicles. ALEXANDER RUESCHE/AP

Long road, little progress

So how would a fuel efficiency standard work?

Under a likely model, the government would set a national limit, averaged across all new cars sold, stipulating grams of CO₂ that can be emitted for each kilometre driven. This measure depends on fuel-efficiency: that is, the amount of fuel burnt per kilometre.

The limit would not apply to individual cars. Instead, each supplier of new light vehicles to Australia would have to make sure the mix of vehicles does not exceed the limit. Low-efficiency vehicles could still be sold, but car dealers would have to balance this out by selling enough high-efficiency vehicles.

Because electric vehicles don’t use fuel (or use less, in the case of hybrids), a fuel efficiency standard would give suppliers an incentive to include electric vehicles in the mix of vehicles they supply.

The prospect of fuel efficiency standards on light vehicles has regularly hit the national agenda in recent years.

In 2014, the Climate Change Authority prepared a detailed plan for a standard and estimated the likely economic savings. The plan seemed well timed. Australia has traditionally produced large, fuel-guzzling cars like the Holden Commodore and Ford Falcon. At the time of the plan’s release, however, the last remaining domestic car manufacturers had just announced plans to close, removing the most likely source of political resistance.

But the Coalition government sat on the idea. It ran a string of reviews before ultimately letting the issue drop.

In 2019, then-Opposition Leader Bill Shorten pledged fuel efficiency standards, as well as a target for electric vehicles to comprise half of new car sales by 2030. But he soon ran into Scott Morrison’s jibe that Labor wanted to “end the weekend” and take away people’s utes.

Labor, of course, lost that election and Anthony Albanese dumped the fuel standards idea on becoming party leader.

Read more: Transport is letting Australia down in the race to cut emissions

two smiling men sit in car
The Coalition government failed to progress fuel efficiency standards. William West/AAP

But what about the benefits?

A fuel efficiency standard would deliver significant benefits to Australia.

The first is economic. The report released this week is just the latest of many studies showing motorists would have been slugged far less at the bowser if our cars used fuel more efficiently.

The second benefit is tackling climate change. Transport accounts for nearly 20% of Australia’s emissions and this share is increasing.

And while lab tests suggest cars sold in Australia are becoming somewhat more efficient, real world testing shows the opposite. If we are to achieve emissions cuts consistent with the goals of the Paris agreement, cutting emissions from transport is essential.

Third, Australia is almost entirely dependent on foreign fuel. So new efficiency standards would decrease overall liquid fuel consumption, leaving us less reliant on imports.

Read more: We thought Australian cars were using less fuel. New research shows we were wrong

woman fills white car with petrol
Fuel efficiency standards could have saved Australian motorists billions. James Gourley/AAP

What’s holding us back

So why hasn’t Australia introduced this clearly beneficial policy? In short, because fuel inefficiency is deeply embedded in Australia’s automotive sector.

The strongest initial resistance to fuel efficiency standards came from the operators of refineries. Fuel-efficient cars require high-quality fuel. But Australia has long had among the dirtiest petrol in the developed world in terms of sulphur content.

Australian refiners resisted fuel efficiency standards because they said the cost of upgrading their plants would put them out of business. But the Morrison government last year funded upgrades at Australia’s last two oil refineries, removing one obstacle.

Further resistance has come from car dealers. From a dealership perspective, it’s easier to sell a car with a low sticker price even if lifetime running costs are higher.

Fuel efficiency standards, and the subsequent large-scale shift to electric vehicles, would fundamentally undermine the business model of the Australian car dealership industry. Much of its profitability comes from after-sales services required to maintain warranty protection, such as oil changes, transmission fluid and tune-ups.

None of these are needed in electric vehicles. The lifetime costs of maintaining an electric vehicle engine are about half those for a comparable internal combustion engine. At some point in their lives, an electric vehicle will require a new battery. But this will occur long after the initial sale.

Given all this, it’s not surprising the car industry is reportedly campaigning to limit any new fuel efficiency standards and delay the shift to electric vehicles.

cars and a van pause in from of sign saying 'prepare to stop'
The car industry is reportedly campaigning to limit any new fuel efficiency standards. Dean Lewins/AAP

What now?

The Albanese government has proposed some incentives to encourage a shift towards electric vehicles. But these limited measures won’t drive the dramatic transition that is needed.

Strong fuel efficiency standards would save motorists money, cut emissions and reduce Australia’s dependence on imported fuel. Anyway you look at it, the policy makes sense.

Read more: Government assumes 90% of Australia’s new car sales will be electric by 2050. But it's a destination without a route

Authors: John Quiggin, Professor, School of Economics, The University of Queensland

Read more https://theconversation.com/whos-holding-back-electric-cars-in-australia-weve-long-known-the-answer-and-its-time-to-clear-the-road-188443


The Importance Of Quality Bait Boards For Boats To Enhance Fishing Efficiency And Comfort

Fishing enthusiasts understand that having the right equipment on board makes every trip smoother and more enjoyable. One essential accessory for an...

The Essential Safety Gear Every Tradesman Needs

Across industries like construction, electrical work, plumbing, carpentry, and welding, workers face hazards every single day. For tradesmen, having...

Best POS System Features That Boost Customer Experience

Source: Unsplash Starting and scaling a retail business is unlikely possible without an effective Point of Sale (POS) system. It is the tech heartbe...

Understanding SMSF Setup Online and Why More Australians Are Choosing Digital Fund Establishment

liManaging your own superannuation gives you greater control over investments, retirement planning, and long-term financial decision-making. As inte...

Double Carport: Complete Guide to Design, Cost, and Installation

A double carport provides practical, cost-effective protection for two vehicles whilst adding value and functionality to your property. Whether you're...

How External Blinds and Awnings Improve Comfort, Privacy, and Energy Efficiency

Outdoor comfort and protection are essential for homes and commercial properties, especially in regions with strong sunlight, high UV exposure, and ...

Worksite Comfort Upgrades That Boost Team Productivity

Jobsite productivity doesn’t depend solely on tools, training, or scheduling. It also hinges on something often overlooked: worker comfort. When e...

NDIS Occupational Therapy: Your Complete Guide to Accessing Support and Services

Occupational therapy plays a crucial role in helping NDIS participants achieve their goals and improve their daily living skills. For people with disa...

How to Start Trading Futures in Australia: Markets, Margin and Regulation

Futures trading has become increasingly popular among Australian traders seeking opportunities across global commodities, indices, currencies and ener...

The Importance Of Residential Scaffolding For Safe And Efficient Home Projects

Home construction and renovation projects require reliable access systems that prioritise both worker safety and structural stability. Whether the p...

Understanding All on 4 Dental Implants and Their Benefits for Full Mouth Restoration

Tooth loss can affect daily life in many ways, including chewing difficulties, speech problems, facial changes, and reduced confidence. Modern denti...

Why Removalists Are Essential for a Smooth, Safe, and Hassle-Free Moving Experience

Moving homes or offices can be overwhelming, especially when you’re trying to balance packing, organising, heavy lifting, and time-sensitive deadl...

Understanding Domestic Violence Orders in Queensland

Domestic violence is an issue that affects many households. This article will break down the key aspects of Domestic Violence Orders (DVOs) in Queen...

Why A Smart Lock Is Becoming An Essential Upgrade For Modern Home Security

Homeowners today are placing greater importance on security, convenience and technology in their living spaces. One of the most significant advancem...

Expert-Led Solutions for Clear Complexions

Many people struggle with acne at different stages of their lives, and the journey toward clearer skin often feels overwhelming. Breakouts affect not ...

Is Long-Term Pigmentation Correction Possible?

Many individuals struggle with pigmentation concerns that affect how their skin appears and how they feel about themselves. These darkened patches, sp...

The Value Of Commercial Buyers Agents Melbourne For Smarter And More Strategic Property Purchases

Buying commercial property requires a deep understanding of market conditions, tenancy structures, asset performance and long-term financial impact...

EOR Solutions & Offshore Workforce Arrangements: A Smarter Way to Manage Global Teams

For Australian companies expanding into Asian markets, navigating local employment laws and regulations can be complex. By implementing employer of re...