Alert: Australia must maintain and expand the Electric Car Discount towards 2035

Assessment of the electric car discount in Australia and the path to 2035, focusing on targets, EVs, and policies.

Climate Context and Australia's Targets

Global warming has already reached 1.3 °C above pre-industrial levels, fueling fires, floods, heatwaves, and sea-level rise. To maintain a 67% chance of avoiding warming above 1.9 °C, Australia would need to reach net-zero emissions as soon as possible, ideally by 2035.

The current NDC for 2035 projects reducing emissions by 62% to 70% below 2005 levels. The upper extreme (70%) is closer to what is necessary to protect the population, and every tonne of climate pollution counts. The review of the Electric Car Discount should be understood in this context.

The Role of Rapid Electrification According to the Climate Change Authority

Australia's climate change council states that rapid electrification of the entire economy is essential to align the country on a credible pathway towards carbon neutrality. Analysis shows that deep emissions reductions in transport need to occur well before 2035 to avoid a high build-up of emissions over time.

Pathways to meeting the 2035 target depend on a sharp increase in the adoption of electric vehicles (EVs) in the 2020s and early 2030s, with fossil fuel-powered vehicles being progressively replaced by EVs as the dominant form of new sales. Furthermore, the report highlights the need for a larger and more flexible electricity system, including expanded storage to support a grid dominated by renewables. Electrified vehicles play dual roles: they increase electricity demand but help provide flexible load and distributed storage, strengthening system reliability.

Climate Benefits of Policies Accelerating EVs

Policies that accelerate EV adoption generate compounding climate benefits: they directly reduce transport emissions and help the efficient operation of an energy system with high renewable penetration. Policies that slow down EV adoption increase the risk of emissions and system costs, making 2035 targets more difficult and costly.

Complementary Policies and Risks of Weakening

The Climate Council highlights the importance of maintaining robust demand policies alongside supply measures. Weakening policies like the Electric Car Discount at this critical stage increases the risk of missing climate targets by slowing down the acceleration of EV adoption precisely when acceleration is necessary.

The Climate Council strongly encourages the Government to maintain and expand the Electric Car Discount as a central climate policy instrument.

Key Takeaways

1. The Electric Car Discount has played a significant role in accelerating EV adoption in Australia.
2. It is crucial that the discount continues. Maintaining and strengthening policies that accelerate the transition is necessary, not weakening them.
3. The Climate Council supports the continuation of the discount for Battery Electric Vehicles (BEVs).
4. The discount has helped put Australia on the path to early adoption of Vehicle to Grid (V2G) charging.
5. The EV landscape has changed since the discount was introduced, but this reinforces the need to maintain support.
6. Meeting 2035 targets requires rapid expansion of charging infrastructure alongside increased EV adoption.
7. The cost of the Electric Car Discount should not be evaluated solely by dollars per tonne abated, but as a boost to generate initial momentum during adoption.
8. Consumer acceptance of EVs has increased significantly while the discount has been in force.

In summary, the Electric Car Discount is seen as a tool to create initial momentum in an early adoption phase, contributing to system reliability and the energy transition.

Before concluding, share in the comments: do you believe the Electric Car Discount should remain? If so, how can the policy evolve to further accelerate EV adoption without compromising costs?