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According to surveys, Australians want to purchase electric vehicles (EVs), but they account for less than 1% of new car sales. What really is going on?

The response is complicated, and it leads us down a winding road of carbon targets, “mega credits,” and other issues that most people outside the auto industry are unaware of.

However, at the end of this road is an apparent fact: EVs that sell well in Europe, the United States, and the United Kingdom are literally unavailable in Australia.

Volkswagen, on track to become the world’s largest EV manufacturer, delivered 212,000 electric vehicles globally in 2020.

None of them happened to be in Australia.

The Volkswagen ID.3, Europe’s best-selling electric car in 2020, will not be available in Australia until at least 2023, according to its manufacturer.

Automobile manufacturers have stopped releasing new models in Australia, and some have publicly stated that the country is becoming a “Third World dumping ground” for obsolete petrol-engine technology.

Meanwhile, according to the Climate Council’s latest report, 75 percent of new car purchases by 2030 must be electric in order for Australia to reach net zero emissions by 2035.

So, why are electric vehicle manufacturers avoiding Australia, and what else is causing low EV sales?

Australians are Interested in EVs … but Aren’t Buying Them

Consumer interest in electric vehicles isn’t new. It’s been strong for a long time.

According to annual surveys conducted by the Electric Vehicle Council, the proportion of Australians who will consider purchasing an electric vehicle as their next car has remained about 50% since 2018.

However, this enthusiasm isn’t translating into more electric vehicles on the road, with just 6,900 sold in Australia by 2020. This equates to around 0.7% of all new car sales.

EVs have a similar degree of interest in the UK, according to polls, but they account for a much higher proportion of new car sales — around 10%.

EV sales as a proportion of the total of new car sales
Image Source: ABC

Hybrids, which combine gasoline engines and electric motors, are absorbing some of this demand.

In 2020, almost twice as many hybrids were sold as the previous year, according to Australian Automotive Dealers Association (AADA) chief executive officer James Voortman.

“We are seeing changing attitudes towards low emissions cars,” Mr Voortman said.

Hybrids, on the other hand, have been selling well alongside electric vehicles in other countries. In Australia, hybrids outsell electric vehicles by a factor of ten.

What’s more perplexing is that Australia has the highest per-capita rooftop solar adoption rate in the world.

According to Ezra Beeman, managing director of Energeia, a consulting company that has modelled Australia’s electric vehicle market for government agencies, people who invest in rooftop solar are more likely to purchase an EV.

“You’d think the number-one market for rooftop solar PV would be good for EVs as well,” he said.

Instead, among developing countries, Australia has the lowest rate of electric car ownership.

According to Scott Nargar, a senior executive at Hyundai Australia, “something has put the brakes on EV car sales.”

Hyundai’s own research consistently showed “very, very strong” intent to buy an EV within the next five years, he said.

“It’s much higher than 50 per cent. There’s a great market there,” he said.

“But there is something that’s holding back Australia.”

So, why Didn’t Volkswagen Sell a Single EV in Australia in 2020?

Because there were none for sale.

Volkswagen didn’t ship any EVs to Australia in 2020, despite many Australians asking to buy them, said Michael Bartsch, general manager of Volkswagen Group Australia.

“There isn’t a day go by where we’re not answering a query on when we’ll be able to supply an electric vehicle in Australia,” he said.

So why not meet this demand?

Because his global head office, located in Germany, won’t agree to it, Mr Bartsch said.

“Australia has some of the most lax environmental standards in the world.

“We are a Third World dumping ground in terms of automotive technology.

“We’ll put those cars where we get the biggest commercial advantage, and the biggest commercial advantage of the moment, when you overlay the fines for not achieving the CO2 targets, is Europe.”

Each EV Sale is Thousands of Dollars in ‘Super Credits’

We must delve into a very dry subject: EU carbon targets.

The EU has set mandatory carbon quotas for automobile manufacturers, which are imposed with stiff penalties.

Car manufacturers are charged based on the total emissions of all the vehicles they sell in Europe over the course of a year.

A fine of about $150 is imposed for each gram of CO2 per kilometer that exceeds a set target.

The EU’s current CO2 per kilometer goal is 95 grams.

For example, a Volkswagen Golf emits about 120 grams of CO2 per kilometer.

This basically means that any time Volkswagen sells a Golf in the EU, it faces a fine of thousands of dollars (though in practice the fine is calculated according to the average emissions of all the cars sold in the year).

Car manufacturers, on the other hand, can use the “mega credits” they earn from selling EVs to offset the emissions of their CO2-emitting vehicles (which are deemed to emit nothing).

As a result, each electric vehicle sold in Europe represents thousands of dollars in carbon credits. Volkswagen exceeded its CO2 goal by a few grams per kilometer in 2020, resulting in penalties of over $150 million.

According to Jake Whitehead, a transport expert at the University of Queensland, estimating the amount of credits for each EV sold in the EU is difficult, but it may be in the range of $26,000 per EV.

It’s no surprise that Volkswagen will not send any electric vehicles to Australia.

Source: ABC Australia

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