The RACQ motoring club says it “largely supports” the government’s proposed vehicle standards, saying they are needed despite the fact that EVs on novated leases are already cheaper than petrol cars, and that falling battery prices should deliver cost parity for EVs within a few years.
The RACQ submission says  it “largely supports” the federal government’s favoured Option B in the New Vehicle Efficiency Standard (NVES), saying it should lead to lower prices for utes generally, although it says that such Light Commercial Vehicles (LCVs) “should receive more flexibility.”
In its submission, the RACQ says the new standard is needed because it will send a strong signal to the global car industry, which is currently not allocating enough electric vehicle models to Australian because of the absence of a NVES.
“EV production is expected to grow to 14 million in 2023 and total light vehicle production is expected to be 86 million. Australia saw 1.2 million vehicles sold in 2023, which is about 1.4% of the global market,” says the RACQ.
“If that was translated to EV sales, then 2023 EV sales in Australia should be 195,000 and not 87,000.
“The fact that Australians are only driving half the number of EVs than we should is concerning to RACQ because we see low emission vehicles as playing a critical role in our net zero journey, cost of living pressures and also improving road safety in Australia. The implementation of the NVES would address this supply problem.”
The RACQ says that in addition to the NEVS, countries around the world are implementing a suite of policies aimed at increasing EV uptake including incentives to by new EVs, government funding for fast charging infrastructure, and industry support to assist OEMs to scale up manufacture of EVs and battery production.
Option B for passenger vehicles “realistic and achievable”
The RACQ submission says modelling from The Centre for International Economics (CIE), and commissioned by the AAA, estimates the Government’s preferred NVES would require 45 per cent of new passenger vehicles in 2029 to be EVs.
“RACQ believes the evidence supports Option B being realistic and achievable, with an increase in supply of affordable low emission vehicles and consumer acceptance.”
The RACQ says most industry predictions agree that light passenger EVs globally will meet broad market purchase parity with ICE vehicles within the next decade without subsidies. In fact a recent study by the ICCT predicts electric SUVs will hit price parity with their ICE equivalents as soon as next year.
“Vehicle cost and ownership research conducted by RACQ is already showing that light passenger EVs in the Australian market are becoming increasingly more affordable in terms of both upfront purchase and total cost of ownership.”
The RACQ says many new EVs are competitive with their ICE equivalent and often cheaper when purchased on a novated lease.
“In the small car category, RACQ’s vehicle cost report found the GWM Ora (Standard Range) and the MG ZS Excite (Standard Range) in the small SUV category, and the BYD Atto 3 (Standard Range) in the medium SUV category were all cost competitive with their ICE equivalent using a conventional finance model.”
The RACQ submission also provides forecasts of declining battery costs to support their case.
“Battery pack prices, according to Goldman Sachs, are now expected to fall by an average of 11% per year from 2023 to 2030.”
RACQ says this means cost parity between EVs and ICE vehicles, without subsidies, will be achieved globally within this decade, and as soon as this year with higher global oil prices.
Running cost of Light Commercial Vehicles (utes) heading down with electricifcation
RACQ says the proposed NVES rightly treats light commercial vehicles differently to passenger vehicles.
“RACQ strongly supports this distinction as any targets universally applied across the whole market would significantly impact on many Queenslanders who require utes and 4WDs for work or to live in their community in the case of regional and remote Queensland.”
In its submission the RACQ points out that the driving cost of utes in Queensland has been in consistent decline over the past 50 years and that the introduction of electric utes via a “robust” standard will see that cost decline further.
“The cost of current best sellers is set out for 2023 and the projected cost for 2025 to 2030 reflects electrified utes entering the U.S. market. The 2025-2030 shows the benefit of having a robust standard.”
Daniel Bleakley is a clean technology researcher and advocate with a background in engineering and business. He has a strong interest in electric vehicles, renewable energy, manufacturing and public policy.