Ben Selwyn from ACA Research shared his findings on what Fleet Managers think about electric vehicles with Caroline Falls.
FAN: What is the buzz among regulators and industry about EVs?
Ben: The conversation around EVs has shifted significantly over the last six months, driven by an increasing global focus on reducing emissions. Countries such as China, India and England have all set targets around electric vehicle sales, leading manufacturers to ramp up their plans for new EV models, as well as EV variants of existing models. While Australia is still lagging from a regulatory perspective, the increasing number of EVs on general sale will lead to increased numbers becoming available in the local market.
Looking beyond OEMs to the broader automotive industry, Australian manufacturers who were already dealing with the end of local manufacturing are looking at their supply chain investments in the context of the increasing demands of EV manufacturing (e.g. battery technology)
FAN: How viable are they in Australia?
Ben: The main factor currently limiting viability in Australia is access to charging infrastructure. While charging stations are being installed in major cities, and along some highways, they are still limited in number. Recent infrastructure investments by the Queensland government and Blacktown Council are positive steps, but broader government support is likely to be needed to fully overcome this challenge.
Another angle to this is that while manufacturers such as Tesla include the installation of a charging point in the vehicle purchase, there are unresolved questions about how this works in practice for apartment dwellers or those in terrace houses with no driveway. From a regulatory perspective, finding a workable model for on-road charging points, or introducing a requirement for new strata builds to include EV charging points could help ensure segments of the population are not disqualified from ownership through a lack of access.
FAN: What are the impediments to a more meaningful rollout?
Ben: Beyond accessibility, the main other factor limiting demand for EVs in Australia is cost. According to a report from Climateworks and the Electric Vehicle Council of Australia, 13 of the 16 EVs currently on offer in Australia are priced over $60,000. With VFACTS data showing that the bulk of passenger vehicles sales sit under that threshold (and in many cases under $40,000), cost remains a significant barrier to both consideration and purchase. New, cheaper models coming into market will address this to an extent, but a more significant factor at a global level will be falling manufacturing costs, as the underlying technologies (particularly batteries) continue to evolve.
FAN: What role do EVs play in 2030?
Ben: How this future plays out will depend heavily on the calls by the leading OEMs. Volvo’s announcement to stop making ICE powered vehicles by 2019 is significant. If the leading manufacturers take a similar stance by 2030, it is likely that Australian dealerships will only be able to supply electric and hybrid vehicles.
From a consumer perspective, electric vehicles are likely to become more common, but will potentially struggle to gain significant share in the market without some form of government intervention or support. We recently visited the Tesla dealership in central Sydney and their sales rep said range anxiety was the main concern raised by prospective customers. In this context, the news that Shell is introducing electric chargers to its service stations in the UK and Netherlands may help to alleviate these concerns if rolled out to Australia, and other fuel companies follow suit.
FAN: What would you like to see happen as quickly as possible to advance that position?
Ben: In June this year, we attended an auto analyst briefing with Renault Nissan Alliance chairman Carlos Ghosn, where he said that “It’s very difficult to make an EV an attractive car without government subsidy, and people will say, ‘how can you support EVs if they’re going to depend on subsidies?’ But we need them, not for an infinite period of time, but just to jump start the sales, and when you get the scale you need then you can be on your own.” This reflects comments from other OEMs such as Mercedes, who feel that some form of government incentive or subsidy will be key to drive sales volumes, at least initially.