The federal government is being urged to establish vehicle emissions standards as a priority to drive the uptake of more eco-friendly cars.
Robyn Denholm, who chairs the board of directors for electric vehicle giant Tesla, wants the federal government to position Australia as a global leader in the electric car industry.
Specifically, she said Australia could learn policy lessons from other countries that have increased the numbers of new electric vehicle sales.
In a speech to the National Press Club on Wednesday, Ms Denholm compared Australia to New Zealand, which has successfully lifted the number of new electric car sales from 2.5 per cent to 11 per cent in the past year.
In Australia, electric models make up only two per cent of new car sales.
"I once worked at Toyota, when cars were still being made in Australia, and I believe Australia can have an even bigger car industry in the electric age," she said.
"Where tech skills converge with manufacturing skills to create advanced manufacturing industries ... we have the know-how, we have the skill and an abundance of mineral resources."
Treasurer Jim Chalmers last month introduced incentives for car buyers to purchase electric vehicles by reducing upfront costs.
Proposed reforms include changes to fringe benefits tax and removing the import tariff on electric vehicles to make the cars cheaper for more people.
But Ms Denholm said the single biggest policy change Australia could make would be to introduce vehicle emissions standards.
"It signals to the market that they have to start reducing emissions even from their internal combustion engine vehicles ... if I had a magic wand, we would do that tomorrow," she said.
Last month, Energy Minister Chris Bowen announced the government will take action on dirty car emissions by introducing national fuel standards for manufacturers.
The proposal is currently in a consultation period and Mr Bowen would not put a time frame on when the standards would come into effect.