The Federal Chamber of Automotive Industries (FCAI) and the Australian Automobile Association (AAA) have cautiously welcomed the Victoria state government’s plan to incentivise zero emission vehicle (ZEV) purchases, support infrastructure investment and set CO2 emissions targets for public and private vehicle fleets.
The Victoria government has announced it will invest more than $100 million to transform the state’s transport sector, offering up to $3000 for Victorians who buy ZEVs – electric vehicles or fuel cell hydrogen vehicles – and setting a ZEV target of 50 per cent of new car sales by 2030. The subsidy is initially capped at 4,000 places, but the government said it will announce further phases of the programme at a later date. The government also announced $19 million to build charging infrastructure and $10 million to add ZEVs to its own vehicle fleet.
Paradoxically, the programme is being funded by the state’s new zero and low-emissions road user charge that Victoria described as replacing the fuel excise, which is in fact a federal government tax. The charge will see Victoria-registered electric vehicles taxed 2.5 cents per kilometre driven and plug-in hybrid vehicles 2 cents per kilometre driven, leading to widespread criticism that the programme will subsidise electric vehicles only to then collect the subsidy back from their owners through the road user charge.
According to the FCAI, the incentives package for electric vehicles is consistent with actions being taken by governments across the world, but the chamber questioned Victoria’s decision to introduce the road user charge.
“Road user charging decisions should not be based around specific technologies and particularly those that are in their relative infancy in the Australian market,” said FCAI Chief Executive Tony Weber. “An efficient road user charging scheme can address all vehicle users regardless of the type of vehicle they drive, how often it is driven, and the purpose of the travel.
The FCAI also showed concern about the Victoria state government’s 50 per cent ZEV target, saying that governments should focus on CO2 emissions targets rather than mandating specific technologies. Weber said the chamber supported “sensible and achievable” CO2 emissions targets that allowed customers to choose the vehicles and technology they wanted to suit their personal and commercial needs.
“The aim is to reduce CO2 emissions from vehicles. Governments should focus on targets, not technologies. If governments set the targets, the car makers will deliver the range of vehicles into the market that achieve environmental outcomes and meet the needs of Australian motorists,” said Weber.
The AAA said Victoria’s plan will make ZEVs more affordable for businesses and families.
“The incentive package announced by the Victorian government, coupled with a new distance-based road-user charge for electric vehicles, is an important step as governments look to make reforms that ensure all drivers pay their fair share of road funding without deterring the uptake of zero-emissions vehicles,” said AAA Managing Director, Michael Bradley.
However, the association said efforts by individual state governments to set vehicle sales and emissions targets are a “major concern and the direct result of ongoing failure of the federal government to deliver a coherent, coordinated, nationally consistent approach to vehicle emissions reduction”.
“Drivers don’t want a patchwork of different policies that deliver different vehicles and differing car prices into different states. The AAA has long called for national, technology-agnostic, market-based policies that deliver Australians cleaner cars at the least cost to families and businesses,” said Bradley.
“The time has come for the federal government to deliver a comprehensive national policy, to avoid the many risks associated with an array of state-based vehicle sales and emissions targets,” he added.
According to Weber, the federal government risked missing an opportunity to provide zero and low emissions vehicle (ZLEV) leadership and policy direction.
“The FCAI has consistently advocated for a national approach to these issues that ideally would be federally-led to avoid the prospect of individual state governments introducing their own standards and incentive programmes in support of ZLEVs,” said Weber. “Consistency is the critical element for Australian customers. If other states introduce their own programmes, they must align. Otherwise, the result will be another disjointed and chaotic system like the introduction of different rail gauges across the country.”