The analysis does not predict the cost of each model. The likely cost is highly contested after revelations last month that the Federal Chamber of Automotive Industries “over-egged” its modelling when it said some models would cost $25,000 more – an untested claim repeated by Dutton.
Prime Minister Anthony Albanese responded to Dutton’s claims about a “ute tax” by arguing that Australia and Russia were the only industrialised countries without the standards.
“Vladimir Putin isn’t my role model for any policy, let alone the standards of vehicles,” Albanese said on Tuesday.
The automobile association’s managing director, Michael Bradley, has argued for fuel emission standards over several years but said the new findings highlighted the challenge in driving sales of electric cars in a short period.
“Early adopters have already seen EVs constitute 7 per cent of 2023 new car sales, but these were the easiest people to shift away from internal combustion engines, and every additional EV buyer will be increasingly more difficult to incentivise than the one before,” he said. “The AAA supports targets that balance ambition and achievability.”
The government wants to give carmakers financial credits on models that beat the fuel standards, an approach that could cut the cost of EVs, but the economic analysis for the association says the targets would require a huge shift to electric models.
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“Modelling from the CIE commissioned by the AAA shows that the government’s preferred new vehicle efficiency standard would require more than 40 per cent of new passenger vehicles and around 50 per cent of new light commercial vehicles to be electric vehicles in 2029,” the submission says.
Highlighting the scale of that challenge, the association pointed to consumer surveys that suggest many car buyers do not yet see enough value in an EV compared to a petrol or diesel vehicle on factors like reliability and range, which means they would expect a lower price for the electric option.
The modelling predicts the prices required to hit the targets in 2029 would be $27,900 for an EV passenger vehicle and $58,600 for an equivalent petrol or diesel vehicle, measuring the theoretical incentive for a customer to make the shift.
The prices required in the SUV market would be $33,600 for an EV and $80,800 for a petrol or diesel model, mainly because the modelling assumes buyers put great value on range and reliability and are not yet convinced that electric models can match an existing Ford Ranger, Toyota HiLux or Isuzu D-MAX.
“It is important to note that the CIE’s work is not a prediction of price changes that will flow from the government’s preferred approach,” the motoring group says.
“Rather, it is analysis that shows the relative price changes for different technologies required to make the government’s preferred targets achievable.
“The analysis suggests the targets will be unlikely to be met without additional consumer and/or
producer subsidies, as well as significant enhancements to Australia’s EV recharging network.”
The auto industry has split on the policy because carmakers like Tesla and Polestar stand to gain from the credits on their electric vehicles while Isuzu, Ford, Toyota and others would have to buy credits to sell utes and SUVs that failed the new standards.
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In another sign of that split, Volkswagen is speaking up for the federal plan despite the fierce objections from the Federal Chamber of Automotive Industries. Unlike Tesla and Polestar, which plan to quit the peak group because they disagree with its stance, the German carmaker will remain a member while disagreeing with the group’s policy argument.
“Volkswagen Group Australia has long been among the voices calling for the introduction of binding auto industry standards,” said a company spokesman.
The Greens back the fuel standards but will warn on Wednesday that they cannot accept a separate law Labor is seeking to pass with Liberal support to streamline environmental approvals, a change that might clear obstacles for new gas projects.
Bandt will argue on Wednesday that the Greens would be willing to pass the fuel standards without amendment if Labor drops the plan to change the environmental approval law.
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Source Agencies
