Subsidies ruled out for electric vehicles

Rebecca Gredley
·2-min read

Australians won't get subsidies to make electric vehicles more affordable, with the federal government instead flagging support for businesses to help switch company cars.

Energy Minister Angus Taylor on Friday released his long-awaited future fuels strategy, which outlines five priority areas.

It includes helping commercial fleets become electrics and hybrids, given 40 per cent of light vehicles were bought by businesses last year.

The government believes helping firms switch to electric and hybrid vehicles will result in them being sold second-hand, reducing the cost for individuals and increasing uptake.

Subsidies have been ruled out.

Mr Taylor argues the government gets a better deal for taxpayers if companies are paid to reduce their emissions through the Emissions Reduction Fund, which has a lower price on carbon.

"We have to focus here on the main game, which is to get emissions down, to reach our 2030 targets and at the same time not to do damage to businesses and force consumers to buy something they don't want," he told ABC radio.

The government predicts 26 per cent of new car sales will be electric by 2030.

The paper is open to feedback until April 2.

The transport sector makes up 18 per cent of Australia's total greenhouse gas emissions, and is expected to rise through to 2030.

Another priority area is ensuring there are enough electric vehicle charging and hydrogen refuelling stations.

The automobile association has welcomed the general direction of the paper but says tax reforms need to be looked at to incentivise the uptake of cleaner vehicles.

The Climate Council has warned Australia will be left behind

"No more 'trials', no more 'roadmaps', no more excuses - the government needs to just get on with it," said the council's Tim Baxter.

The Electric Vehicle Council has described the paper as "another flaccid, do-nothing" document.

"Australia's inertia on EV has been noticed by the global auto sector, which now withholds the best and most affordable electric vehicles from our market," the group's chief Behyad Jafari said in a statement.

"Many of the most popular electric vehicles in the US and UK are unavailable to Australian consumers and that trend will rapidly accelerate under Taylor's do-nothing plan."

Think-tank the Australia Institute's Richie Merzian says the government should look at removing import taxes for electric vehicles and lower registration costs and stamp duty, as in the EU and US.

Labor leader Anthony Albanese says he wants more manufacturing to occur in Australia, including electric vehicles.

General Motors closed Holden's local manufacturing in 2017, before deciding to dump the brand entirely last year.

The company is now eyeing an all-electric future, and has jumped aboard new US President Joe Biden's strong support for climate action.