EV and Australian policy

Transport contributes nearly 20% of Australia’s CO2 emissions (Australian Government, 2022) with cars responsible for about half of those emissions, roughly the same as Queensland’s entire coal and gas-fired electricity supply (Climate Council, 2017), yet Australia has made minimum progress towards decarbonising transport.  This essay focuses on the importance of developing an Electric Vehicle (or EV) strategy to jumpstart the decarbonisation of the transport industry in Australia and increase Australia's energy security. The dispute is largely between the Federal Government, which has failed to develop an EV strategy, and consumers, environmental activists and the automotive industry who are calling for a government-led strategy to electrify transport and ultimately increase the availability of EVs in Australia at an affordable price.

This essay draws on the 'orders of worth' (OOW) framework developed by Luc Boltanski and Laurent Thévenot (2006) to understand the motivations and the perspectives of the various stakeholders as they relate to this issue and assess how their opinions have changed over time as they seek to legitimise their positions. The discussion looks at how supply and demand for EVs in Australia have been affected by the lack of political action in the context of changing public opinion regarding EVs and how Australia has failed to follow successful international actions that have stimulated other EV markets. We conclude that the recent ‘climate led’ election results prove a shift towards the green OOW for the Australian population. Sustainability is now a powerful driver not only when voting but also as consumers.

Background

Transport emissions are already significant and are expected to continue to grow (Climate Council, 2017). Whilst not a silver bullet, a thriving EV market is necessary to reduce transport emissions. EVs run on electricity and rechargeable batteries instead of petrol and have no tailpipe emissions while the average internal combustion engine (or ICE) car can emit as much as 3 tons of CO2 per year (RACWA, n.d.). Moreover, the lifecycle emissions of an EV are estimated to be about 45% that of an ICE car in Europe (Ricardo Energy & Environment, 2020).

The rest of the world is rapidly moving towards decarbonizing transport. The UK has already banned new sales of ICE cars by 2030 and over 80% of cars sold this year in Norway were EVs.

Mandatory FESs are one of the key policies found to influence the local supply of EVs. A FES is a law requiring car manufacturers to keep their fleet’s CO2 emissions below a certain level. Australia is the only OECD country without such standards (Cranney, 2020). This encourages carmakers to sell higher emitting and higher profit petrol and diesel cars to Australia. A car manufacturer will appeal to the market OOW and choose to sell their available EV’s in regions with mandatory standards, where failure to meet them would result in penalties. According to Beyhad Jafari, the chief executive of the Electric Vehicle Council, “if Australia continues to be one of the only developed nations without FESs then we will continue to be a dumping ground for the world’s dirtiest vehicles.” (Electric Vehicle Council, 2022). The Federal government has argued against mandatory FESs through the market OOW, claiming that car prices for the average Australian will go up if the standards were put in place.

Consumer incentives such as tax rebates and exemptions, on the other hand, are proven to influence the demand for EVs. They appeal to the market OOW by helping to achieve price parity with ICE cars and making EVs more affordable for consumers who tend to prefer short term gains to long term savings. While EVs are cheaper in the long run, bringing down the initial price is key to increased sales.

Stakeholders

There are many stakeholders involved in this dispute, including Local, State and Federal Government, the automotive industry, charging infrastructure providers, consumers, and other organisations, ranging from industry groups to activist groups. Below is a description of the main stakeholders and their position in the dispute. (See the appendix for a full list of stakeholders and their OOW).

Australian Government

The Australian Federal Government has a critical role in decarbonising transport in Australia by setting policies that signal to global manufacturers that Australia is a viable and attractive marketplace for their vehicles. The State Governments have already implemented some incentives, but without federal leadership Australia will continue to lag. This key stakeholder has had a major shift in their OOW in recent months. From viewing any electrification of vehicles as an attack on our domestic OOW and focusing on the market order, the government has bowed to local pressure from voters and international pressure from car makers and world organisations. The recent election highlights the green OOW becoming a vital issue for voters and the new government will have to appeal to this new climate. The rise in green seats and independents will be integral to government policy marrying consumer demands for a greener Australia.

Automotive Industry

The automotive industry is largely driven by the market OOW.  Since manufacturing discontinued in Australia in 2017, the industry reacts primarily to policy changes and customer incentives that determine the attractiveness of importing EV models in Australia. Michael Bartsch, the Volkswagen Australia chief disclosed in 2021 that “Australia’s clean technology laws were so weak, his German head office would not supply Australians with the company’s top-selling mid-range electric vehicles. Without a clear policy to signal the market for electric vehicles to grow, Volkswagen would instead supply popular models to more welcoming markets such as North America and Europe.” (Posner, 2021)

The Electric Vehicle Council, the national body for the electric vehicle industry in Australia, actively supports the growth of the EV market. Chief Executive, Behyad Jafari, supports FESs as a key policy to drive growth in the market. The council often uses the industry and market OOW to highlight how Australians are being denied the ability to purchase EVs, especially more affordable ones. In 2022 Mr. Jafari said, ‘because the Morrison Government refuses to introduce the same FESs they have in the US and the UK Australians are being denied access to the electric cars they now desperately want, especially at the more affordable end of the market’ (Electric Vehicle Council, 2022).

Customers

Customers clearly want to purchase EV’s in Australia. Research has shown that Australians support the electrification of transport, with 62% of Australians supporting the use of subsidies for the sale of EVs, and 57% supporting a ban on the sale of new fossil fueled cars by the year 2035 (The Australia Institute, 2021).

While the green OOW is one of the main reasons behind customers desire to own an EV, customers are also market driven and will not purchase EVs in the necessary numbers until they are given incentives that will at least equal that of an ICE vehicle.

Energy Companies

Energy companies are stakeholders in this dispute. They view the issue though the market OOW and are preparing to diversify. Many of the large oil companies have interests in renewable energy already and are promoting their green vision. Changing petrol stations over to charging sites is one of the obvious moves (Durkin & MacDonald-Smith, 2021)

Establishing charging networks and using solar at existing service stations are part of the future plan to diversify. Energy companies are not highly critical of the government as they have benefitted from the recent $2.4B oil refinery subsidy (Macmillan, 2021) and the Future Fuels Strategy pledge to boost the charging infrastructure (Australian Government, 2021).

Discussion

Political action lags public opinion on EVs.

Australian government policy has largely valued the domestic and market OOW. Whomever is in power has appealed to the voter’s fear of inflation and increased cost of living. The consumer has had a relatively congruent lens, but recently there has been a shift in consumer attitudes towards the green OOW. A climate poll conducted by the Lowy Institute showed most Australians believe the benefits of climate change policy will outweigh the costs, with three-quarters of Australians saying ‘the benefits of taking further action on climate change will outweigh the cost’ (Kassam, 2021).

In 2017 the EV council called for policies on charging infrastructure and FESs but the government did nothing. Ultimately it was what voters wanted that mattered and until the consumer was desperate for EV’s and climate change policy there was no reason to alter their order of worth. Scott Morrison famously said before the 2019 election the EV would ‘ruin the weekend’ (Remeikis, 2019). He had appealed to the Australian voter’s domestic order of worth and their tradition of driving long distances on the weekend. Australians, while slowly seeing climate change as an issue (Kassam, 2021) were not convinced the EV could last the distance.

Environmental and international catastrophes were to cause a true shift. Australia had endured horrific drought followed by the 2017 floods. Internationally East African droughts, Californian wildfires and cyclones were raging. But it was to be the mega fires of 2019-2020 that would change the OOW for many Australians forever. The BBC wrote ‘Earlier, deputy prime minister Michael McCormack conceded that more had to be done to tackle global warming, after many Australians linked the severity of this year's fires to climate change’ (BBC News, 2019). The green OOW began to override the market order for consumers for the first time, even the traditionally conservatist farmers of Australia were now climate activists. ‘Five, 10 years ago, no farmers would've believed in climate change - they were saying these are just weather cycles,’ he says. ‘Now they accept it, they talk about it - and they want action’ said Verity Morgan-Schmidt from Farmers for Climate Action (BBC 2019).

The current war in Ukraine has created uncertainty and volatility in fuel markets. Australia fuel prices are now above the $2 mark. Eradicating the cost of petrol from the cost of living is another incentive for EV purchases and shows the market OOW aligning with the green OOW (Petrovsky, 2022).

The Eastern Australia floods of 2022 may well have been the climate disaster that truly cemented the green OOW as a dominant lens for Australians to view their world. This can be seen by an increase in demand where sales in Australia tripled from 2021 to 2022 (see Figure 1 below). The recent increase in petrol prices has seen a surge in demand with wait lists for EVs extending into 2023 (Misoyannis, 2022). Professor Bräunl from the Renewable Energy Vehicle project at the University of WA said ‘unless the federal government intervened in the market, consumers were likely to have to wait another five years before EVs became widely available and cost-competitive’(Mercer, 2022).

Australia Lags International Action.

Demand for EVs is growing significantly in Australia but supply is severely limited. There is consensus amongst most stakeholders, apart from the former Federal Government, that a national EV strategy, including FESs and consumer incentives as its primary components (Hagon, 2022; Posner, 2021; J. Taylor, 2022), would be key to helping car manufacturers develop a business case to increase supply to the Australian market. Leading EV countries have had these policies in place for many years, and in this section, we will explore how Australia compares.

Australia is considered one of world’s biggest laggards in EV adoption and is also the only OECD country to not have mandatory FESs (Cranney, 2020). Australia’s position on vehicle emissions is largely a hang-up from the former local automotive manufacturing industry which ceased to operate in 2017 (Corcoran, 2020). To protect the relatively inefficient industry, Australia’s emissions standards were maintained well behind those in Europe, as a move to better standards would have resulted in significant costs for the manufacturing industry.

Australian environmental groups have been calling for mandatory FESs for many years as the industry has consistently failed to meet existing voluntary standards. In 2009 Gail Brodbent from the Australian Conservation Foundation (ACF) described ‘the Australian car industry's failure to meet voluntary efficiency targets in 1983, 1987 and 2000 as concerning, and said that the industry is again unlikely to meet a 2010 agreement to achieve an average fuel efficiency of 6.8 l/100km’(Stevens, 2009).

Both Labor and Coalition governments have reviewed the need for mandatory standards in the past decade but have never committed to them. In 2015 the Liberal party began the review process with a Ministerial Forum to review emissions standards, but it never eventuated. In 2016 the Turnbull government proposed new FESs for vehicles appealing to the industrial and market order, promising more efficient vehicles with estimated savings of over $28 billion on fuel by 2040 (Quiggin, 2016).

Other countries have taken a significantly greener view of the world, with Boris Johnson announcing in late 2020 a ban on new petrol and diesel cars sold in the UK from 3030. This was part of Johnson’s plan for a ‘green industrial revolution’ to tackle climate change (Harrabin, 2020).

After several years of inaction, the Coalition Government released the much-anticipated Future Fuels Strategy in 2021 (Australian Government, 2021) which included some support for developing charging infrastructure but was primarily a technology driven strategy. As Scott Morrison said at the time, playing on the civic OOW and focusing on the community’s right to choose, ‘our Plan promised technology not taxes, choices not mandates and driving down the cost of new technologies’ (A. Taylor, 2021). In addition, the Minister for Industry, Energy and Emissions Reduction, Angus Taylor, focused on the market OOW by saying that ‘We will not be forcing Australians out of the car they want to drive or penalising those who can least afford it through bans or taxes’ (Taylor, 2021).

Industry groups disagreed with the Government’s strategy, as is highlighted by Jafari from the Electric Vehicle Council who said ‘the government’s new Future Fuels strategy was virtually custom-designed to tell global EV makers we’re not enthusiastic about their product’ (Jafari, 2021), and Richie Merzian, climate & energy program director at the Australia Institute, who said ‘The Federal Government’s new Future Fuels Strategy will struggle to drive up electric vehicles sales and drive down transport emissions. Norway, the global leader on EVs, has driven the transition to cheaper, faster, and cleaner vehicles through credible policies and regulations,’ said (The Australia Institute, 2021).

While the green OOW is the driving force behind the need for electrification of transport, the market OOW is used by most stakeholders as the primary OOW to both promote and oppose the development of the EV market. The former Federal Government believed that FESs would increase the costs of vehicles for the average Australian, whereas advocates for standards believe that without these in place, car manufacturers will not have a financial incentive to supply the Australian market.

Conclusion

Sustainability can no longer be contested. Appeals to the industrial, domestic and market orders of worth can no longer justify a lack of action regarding EV policy. The green OOW has until now sat firmly behind in this discourse. The recent election saw a major paradigm shift with the green OOW valued more than ever before. Consumer’s actions are finally correlating with their belief systems. The new Australian Government will have no choice but to compromise in this dispute. Tradition is less important now than protecting the environment. The driver behind this movement is the unequivocal voice of the people. Their values have been reflected in their actions; they have voted to be greener.

The outcome of this dispute, while currently depicting compromise, is ultimately yet to be seen. Compromise, though, can create a fragile legitimacy (Reinecke et al., 2017). As Reinecke et al (2017) suggest, aligning with multiple orders of worth may result in insincere and unstable conclusions. Rather than compromise the new government must move towards transcendence, i.e., creating a new moral reference point aligning pre-existing point of views. The green OOW and the domestic OOW should merge and become the new normal, where purchasing an EV is considered as natural as purchasing any other vehicle. Sustainability will exist as a dominant order and will become quite literally, indisputable.

Appendix B – Relevant Timeline

2008 – Tesla sells first car

2009 – Euro 5 Emissions Standard introduced on 1st September 2009

2009 – ‘Black Saturday’ bushfires (VIC, Australia)

2010 – Australian Elections – Julia Gillard wins (Labor)

2011 – Brisbane floods

2011 – Carbon pricing scheme introduced by the Gillard government in Australia

2013 – Australian Elections – Tony Abbott wins (Coalition)

2013 – Australia introduces Euro 5 standards for light-duty vehicles

2014 – Carbon pricing scheme repealed on 17 July 2014

2014 – Euro 6 Standard – introduced on 1st September 2014

2015 – Paris agreement as a reaction to 5th IPCC report – agreed to keep rise in temp to below 2 degrees

2016 – Australian Elections – Malcolm Turnbull wins (Liberal)

2016 – Turnbull government proposes new fuel efficiency standard

2017 – closure of last automotive manufacturing plant in Australia

2017 – MoU – Sub National Collaboration on Electric Vehicles

2017 – Creation of the Electric Vehicle Council

2017 – Lismore floods

2018 – Great Thunberg’s first school strike for climate; also address UN in 2018

2018 – Malcolm Turnbull replaced by Scott Morrison

2019 – NSW bushfires

2019 – Scott Morrison attacks EVs in 2019 federal election campaign, i.e. “end the weekend”

2019 – Australia postpones Euro 6 fuel standards until a 1 July 2027

2019 – Intention to buy EV’s in Australia doubled

2020 – COVID – petrol prices came down, people were driving less; halted some responses to climate change

2020 - Federal Chamber of Automotive Industries announces voluntary CO2 Emissions Standard that aims to reduce CO2 emissions on average by 4% per year for passenger cars and light SUVs

2020 – UK government launched plan to decarbonize transport, banning sales of ICE vehicles frmo 2030

2021 – Australian Government publishes Future Fuels Strategy

2021 – Australian Government agrees to subsidise last remaining oil refineries

2021 – 6th IPCC report

2021 – July, Victorian government introduced a new tax that charges electric vehicle drivers

2021 – NSW and VIC introduce EV incentives

2021 – Scott Morrison backflips on EVs in preparation for election

2022 – NSW/QLD floods

2022 – India’s record heatwaves

2022 – war in Ukraine – petrol prices increased; highlights Australian dependence on foreign fuel; turning point for EV sales in Australia

2022 – QLD and WA introduced EV rebates

2022 – Australian Elections – Anthony Albanese wins (Labor) – Greens and “Teal” Independents win multiple seats, running primarily on a climate platform