Australia has a mixed and fluid relationship with Electric Vehicles. Remember the “War on the Weekend” back in 2019, when the Australian Federal government ran a scare campaign against the opposition’s policy of a 2030 EV target of 50% of all new vehicles sold? By 2021 the government’s position reversed, as they embraced EV’s as part of their net zero carbon by 2050 commitment.
In this article we’ll look at Australia’s EV Charging landscape: what is it going to look like over the next 10 years?
Australia is a big country
It’s hard to really understand how big Australia is until you’ve been there.
We have the largest National Highway system in the world – Highway 1 is 14,500km long (it generally takes about 6 months to travel but can be completed in 3-4 months if you don’t stop much). An overseas relative who once visited for a week and was planning to drive from Cairns to Sydney was a bit disappointed when we told him he wouldn’t have much time for sight-seeing!
We have approximately 7,000 petrol stations nationwide.
Transitioning Australia’s vehicle fleet to EV’s means eventually replacing those 7,000 petrol stations with some combination of home, business, and commercial charging.
Competing technologies
Existing fuel technologies coexist peacefully together, mainly because they’re supplied by the same companies. Petrol wasn’t used as vehicle fuel until 1884 and became the standard once cars were mass-produced in the early 1900’s.
Even while developing hybrid petrol/electric engines, Toyota was exploring Hydrogen as a potential replacement for Petrol/Diesel engines. In 2014 they brought the Mirai to market, but after 9 years have pulled the pin because it’s not commercially viable.
Toyota is instead pivoting towards using that same hydrogen technology in medium to large sized trucks … but wait, if it’s not commercially viable for a small vehicle but is viable for trucks, what’s the difference?
Building out a refueling network is not commercially viable for a single passenger vehicle model.
Trucks can carry more fuel, so a new refueling network requires less nodes. Hydrogen truck technology has also been touted as a solution for long-distance trucking routes in Australia, based on the same argument.
The Critical Mass Chicken and its Egg
Both EV and Hydrogen technology suffer from the same problem as Petrol technology – achieving critical mass for expansion.
Australia's Electric Vehicle Infrastructure
Of the 3 types of EV charging infrastructure, Australia is very well placed to grow Home charging capacity due to its uptake of Solar PV technology. We currently have approximately 33 Gigawatts – and we know that through to 2030 only 5 Gigawatts will be required GLOBALLY to power EV’s.
Business charging capacity is an easy one: of the roughly 13,000 EV’s in Australia, almost two thirds belong to a Business fleet. Businesses with EV’s invest in charging stations at their sites to charge their vehicles, and rely on Home and Commercial charging when not on site.
Commercial charging capacity is the weakest link. There are about 3,000 public charging stations in Australia. While this is a 57% increase on the previous year, that isn’t enough to allow EV users to travel the 14,500km Highway 1.
Creating sufficient charging infrastructure network for a large country like Australia is difficult, but we already have an existing refuelling network for ICE vehicles so we know it’s possible.
Home charging got a big boost from have Solar PV subsidised, while Businesses invest in chargers for their own fleets. Commercial charging is the real Chicken & Egg scenario – it will grow but in the absence of government subsidies of some kind will remain heavily dependent on EV Supply and Demand, at least until the price of oil reaches an inflection point which makes large-scale capital investment worthwhile. At THAT point we’ll see rapid conversion of existing ICE refuelling facilities to EV charging.
Demand for EV vehicles
Australia is in the middle of a vehicle tug-of-war.
On one hand: ICE SUV’s & Utes dominate the market. Contrary to popular belief this is not because we are a big country – it’s because government policy settings have inadvertently popularised big, heavy ICE vehicles:
Australia has the worst vehicle pollution standards of all OECD countries.
Australia is one of only two developed countries with no vehicle fuel efficiency standards (the other is Russia).
Australia heavily subsidies commercial fuel usage via the Fuel Tax Credit. This will cost $9.6 billion in 2023-24, and $41.1 billion over the next 4 years.
On the other hand: EV sales in 2022 more than doubled, and now represent 7.2% of all vehicles sold (16.2% if you include hybrids) – so there is now one EV in the top 10 vehicles, the Tesla Model Y.
Let’s be very clear - this is a deliberate choice made by a succession of Australian governments over the past 50+ years (the worlds first national vehicle emissions standards commenced in 1970). The result is that Australia receives older, less efficient, more polluting vehicles than other countries that have these standards. Less Electric Vehicles are imported, because ICE vehicles are prioritised by government policy.
Supply
So what happens in the rest of the world, where EV supplies are not discouraged?
Supply increases dramatically:
Source: Global EV Outlook 2023
Source: Global EV Outlook 2023
This shows very clearly that supply is not an issue. When government policy settings are adjusted, EV’s can be supplied to meet demand.
Balanced Supply & Demand is good for Infrastructure
It is also important to highlight that governments introduce policies that don’t hinder EV supply, they often also add complementary demand-side policies.
I’ll use The Netherlands as an example because it has one of the largest and fastest growing European EV markets.
The Netherlands has long had a tax on company cars provided to employees for private use (similar to Australia’s FBT), paid for by the employee – the “Bijtelling” - literally the amount added to your salary that you pay tax on, as a percentage of the vehicle value.
When supply-side policies were implemented to improve vehicle fuel efficiency & reduce emissions, the Bijtelling on EV’s was set at 0% - TAX FREE COMPANY CARS!
As demand grew in line with supply, the Bijtelling was increased gradually so that in 2024 it reaches parity with ICE vehicles.
This policy structure aimed to balance demand with supply as the EV market grew.
Why is this essential?
Because stable growth of supply and demand brings reliability, which is EXACTLY WHAT INFRASTRUCTURE INVESTORS NEED.
What will our EV Charging Infrastructure look like?
With reliably growing supply and demand for Electric Vehicles, Investors can justify their investments in EV charging infrastructure.
It’s not yet certain what this will look like across Australia over the next decade, but I think it will look like one (or both) of these:
Existing commercial petrol stations are retrofitted with EV charging infrastructure. By the time EV’s reach 30% of new vehicle sales they’ll look completely different to cater for a mix of fast and slow charging. Corporate collaborations will focus on maximising revenue from charging time, so don’t be surprised to see the regular fast food offerings be augmented by the EV equivalent of frequent flyer lounges.
Australia has a proud history of Public Private Partnerships. Although these are sometimes flawed in execution (looking at you Rozelle Interchange) they do offer a way to share risk and cost on large scale infrastructure projects. If the Australian Federal Government sees EV charging infrastructure on the same scale as Hydroelectric Power, we could see substantial public investment in chargers nationwide, which would be operated by commercial enterprises. As much as I dislike dealing with Linkt, this would be a good way to ensure charging infrastructure actually exists. (although there would be no business lounge, unfortunately)
Summary
Electric Vehicles aren’t just a new product, they’re a new technology that requires building out infrastructure to support its expansion. Australia is now at the cusp of growing all 3 aspects of this technology – supply, demand, and infrastructure.
We’re a bit behind the rest of the developed world, but that’s ok. It means we can learn from what has worked and not worked, and apply it to our unique situation of having dense populations around cities that are geographically very far apart.