Electrified for the Future

By David Nguyen, Events Director

Today, we are starting to see more people and households take an interest in electric vehicles (EVs). There is a growing demand[1] for it. The cost of living is at an all time high and people are looking to switch. It appears to be a fitting solution.

While trying to avoid the short term fuel price pains, they are looking for an alternative, perhaps something that will serve them in the long-term; towards a sustainable future.

This is one way the market for sustainable mobility is evolving. Consumers are flocking towards it as the world shifts and sustainable goals are set into motion. It would seem that maybe in a mere decade, almost every vehicle on the road will be electric-fuelled. McKinsey projects EVs will make up 75% of the European new cars market by 2030[2], while aiming for an internal combustion engine (ICE) ban half a decade after. 

If you are starting to visualise this world, it would seem very palpable. But our questions today are, what will it take to get there? What needs to happen? And who will first be involved in this transformation process?

Towards The Electric Future.

What will it take to get there?

Imagine this. For every 4 cars you see in 2030, at least one is an EV. This one seemingly small observation is representative of a huge transformative shift in the mobility industry. McKinsey demonstrates that Europe would need to prepare for a weekly demand of 15,000 chargers and 5% additional electricity demand. It is projected to gap the 2030 transport emissions reduction target by 40%[3].

Current urban issues of emissions, congestion and safety will be intensified with population and GDP growth[4]. This will make the goals aforementioned very challenging.

To expand on electric chargers, more-so publicly accessible ones, the issue would be how to meet the increase in demand.

Before we look to strategies, it is important to consider some risks which could be a bottleneck for growth:

  • Government regulations: EV fast-chargers require permits and thereby construction sites with an alignment to an electrical grid. This can require months to years to plan out

  • Electrical grid: To meet the increase in power demand from EV and its infrastructure, there will need to be upgrades to expand capacity

  • Resources:  EV technicians will need to be trained to create the fast-charging hardware and ensure meeting 100% eco-friendly targets

  • Cost: In the EU, a 350kW charger can cost up to $150,000. This includes hardware, installation and planning[5]

What needs to happen?

Some core strategies that could guide the movement towards EVs include:

  • Implementing stakeholders who’ll run and lead fast-charging networks to scale the EV-charging infrastructure. Part of this scalability should involve players such as real estate providers, utilities and grid operators to broaden the network

  • Governments to subsidise public charging in locations where there is a positive cost-benefit (for example subsidies for capital expenditure on chargers, installations and power distribution). Additionally, they can offer incentives for building private chargers.

  • EV-charging companies to invest in production capacity and upskilling workforce to navigate the EV infrastructure. One such example is adopting data and analytics for network planning of charging stations

  • Education, and publicising infrastructure plans to help reduce range-anxiety for consumers - the limited distance one can travel with a single charge

Where is Australia at in terms of EVs?


There is no question we are seeing more EVs on our roads today, especially if you’re eyeing one for your next purchase. Whether you are in a middle-income family, EV enthusiast, or a future thinker, you’ve probably come across EVs and thought about its benefits. But the reality is, that while most of us are thinking about purchasing an EV, only a few currently own one.

The Labor Government will introduce the Electric Car Discount ‘so that more families who want them can afford them, and to reduce emissions’[6]. It will exempt many electric cars from import tariffs such as a 5% tax reduction. This will be available to electric cars below the luxury car tax threshold for fuel efficient vehicles ($77,565 in 2020-21)[7]. This cut-off will encourage car manufacturers to import and supply more affordable electric cars.

Currently in the Australian market, there are no EVs available for under $40,000 and just five are under $60,000. This pales in comparison to the UK, where there are more than two dozen EVs for under $60,000 and eight that are cheaper than the cheapest EV in Australia[8].

To address this, the Government is engaging with several stakeholder groups including industry and consumers to develop Australia’s first National Electric Vehicle Strategy. It’ll involve considerations to the EV infrastructure, policy settings, and the implications of these policies.

If Australia can follow through with its strategy it will be a healthy market for automotive manufacturers of EVs to exist in.

Australia's key goals in the coming decade or two will be:

  • Demands for EV supply and public fast-charging stations are met without delays

  • Removal of perceived inconveniences for consumers still on the fence about EVs

  • Making a contribution to its CO(2) emission reduction targets through work in the mobility industry

It is still a mile away before we can start to see these goals fully realised on Australian roads. As consumers, you can be excited about what’s to come and even be involved in it. The question is, when?

References

Australasian Fleet Management Association, 2021, Charging infrastructure, rebates, and emission standards key to EV uptake, experts say, IMAGE, URL

[1] A. Hall., 2022., Demand for electric and hybrid vehicles is at an all-time high. Why aren’t more on the roads?., SBSNews Environment., URL

[2] [5] S. Heldmann., F. Nagele. & F. Richter., 2021., Shaping the future of fast-charging EV infrastructure., McKinsey & Company., URL

[3] [4] J. Concede et. al., 2021., Why the automotive future is electric., McKinsey & Company., URL


[6] [7] [8] Labor’s Electric Car Discount., 2021., Australian Labor Party., URL