Oz Report Touts Alternatively Fueled Vehicles

Almost 1 million electric- and natural gas-powered vehicles could be on Australian roads in 10 years with the introduction of cost-effective policies.

An analysis commissioned by the Energy Supply Assn. of Australia says by 2035, alternatively fueled vehicles will account for 18% of the country's fleet, or 3.4 million vehicles.

But this all depends on government support and the report by research-advisory-services provider Energeia finds Australia does not have a comprehensive AFV policy framework federally and is lagging behind many international peers.

Suggested government measures include giving AFVs priority lanes in peak times, access to parking and requiring automakers to increase the range of vehicles on offer.

The report says such measures would increase the AFV fleet by a further 600,000 units to 4 million in 20 years' time.

“Increasing the number of vehicles manufacturers are required to sell into Australia would increase model availability to international levels and bring their availability into Australia forward by three years,” it says.

“The direct costs of such a policy would be close to zero, although there may be modest indirect costs to consumers as the increased sales requirement is subsidized across the fleet.”

Australia has among the lowest shares of both NGVs and EVs among all Organization Economic Cooperation and Development member countries. Battery-electric vehicles accounted for only 0.03% of new-car sales in 2014 and hybrid-electric vehicles accounted for less than 2%.

NGVs have been adopted only on a small scale within Australia’s commercial fleet, mainly in taxis, with no natural-gas-fueled cars from OEMs available in the country.

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Association CEO Matthew Warren says Energeia’s report gives an independent assessment of the benefits of an optimal take-up of alternative-fuel vehicles through to 2035. He also says the study underlines the economic benefits of encouraging more electric and natural-gas vehicles on Australian roads.

“There’s a lot to like about AFVs and what they offer,” he says in a statement. “Apart from the broader economic benefits of the cars of the 21st century, they are cleaner, safer, better-performing and cheaper to drive. And they can reduce our dependence on oil imports.”

Warren says the association expects the technology to perform the same way as solar power, which, after a slow start, has accelerated significantly over the past decade to a point where Australia now has the highest penetration rates in the world with 1.4 million homes with solar panels on the roof.

“In the same way, once there is a critical mass in the domestic market for alternative-fuel vehicles it will bring down costs, support widespread development of charging stations, increase the level of aftersales support and create a resale market that will encourage more drivers to buy one,” Warren says.

The report says if action is not taken now, Australia will miss out on many benefits.

It says a “do-nothing” approach on EVs by government over a 20-year period would result in a net economic cost of A$368 million ($268.5 million) to the Australian economy as well as the loss of a potential additional A$878 million ($640.5 million) gross value added.

It also would result in an additional 132 million gallons (499 million L) of imported fuel, an additional 2.5 million tons of carbon dioxide equivalent greenhouse gases and an additional A$16.3 million ($11.9 million) in health-related costs as a result of local air pollution.

For NGVs it estimates a net economic cost of A$113 million ($82.4 million) to the economy over the 20 years and the loss of a potential additional A$202 million ($147.3 million) GVA.

The report concludes the economically efficient level of AFV adoption over the next two decades is 4 million EVs with interim targets of 900,000 units by 2025 and 2.3 million by 2030.

The economically efficient target for NGVs is 2 million, or just over 11% of Australia’s light-vehicle fleet by 2035 with interim targets of 85,000 by 2025 and 525,000 by 2030.