No one is better than Australia at generating solar energy from rooftops. But few in the developed world are worse at using renewable energy to replace the polluting petroleum vehicles on our roads.
We rank 22nd in the world for electric vehicle sales. For context, EVs accounted for 84 per cent of Norway’s new vehicle sales in January of this year. They were 16 per cent of vehicles in California in 2021, and 4 per cent of vehicles in the United States. Australia’s total is just under 2 per cent.
The world faces the greatest energy crisis in half a century and we are forced to keep importing vast volumes of oil for the foreseeable future. On top of the $7 billion in fuel subsidies in the budget, another $3 billion was announced to mitigate rising fuel costs. Almost all of this goes overseas. A smarter country would be running EVs on its cheap rooftop solar.
Nine years of a futile culture war against renewables and EVs from the previous federal government is hitting our hip pockets. Petrol prices regularly exceed $2 a litre, eroding incomes and spurring inflation. Driving a typical vehicle one kilometre with petrol will cost you 20 cents. The same distance in an EV charged from your rooftop would cost two cents. The biggest household energy cost is vehicle fuel, about $2600 in 2021, and headed towards $4000 in 2023. Australia typically spends $32 billion a year on foreign oil, and this year the amount will exceed $40 billion. This creates no jobs. Running our cars on solar would.
So, the new federal Labor government has much to do. The internal combustion engine is last century’s technology. If we design policy for this century, this current energy crisis should be the last time Australians are held hostage by international oil barons and petro-states. We can become the solar Saudi Arabia. And thanks to lithium batteries, solar is the new black gold.
The average Australian home uses more than 13 kilowatt hours of electricity a day. The same average household has 1.8 vehicles that each drive an average of 13,500 kilometres. When those vehicles are electric, roughly 12–20kWh more electricity will be needed at that home to power them, more than doubling the daily electricity use of the household. This is an opportunity for more and larger rooftop solar systems. It is an opportunity for more community solar and storage. It is an opportunity to improve our balance of trade.
To understand the scale of this endeavour you must zoom out. In 2021 Australia needed 270 gigawatt hours of electricity. Electrifying our road vehicles requires an additional 100GWh of capacity. This is a vast market for more clean-energy generation, on homes and in large-scale wind and solar.
Australia has almost 20 million private vehicles. If they go electric, they’ll do more than just transport us – assuming they have 60kWh batteries, they will represent 1200GWh of storage capacity. By comparison, Snowy 2.0 represents less than a third of that storage, at just 350GWh. Our collective cars will be by far the biggest battery in the future energy system. EV owners can sell stored energy back into the grid at opportune moments, meaning their vehicles can provide additional security of supply to their homes and local communities.
Comprehensive EV policy includes thinking about our infrastructure. We need fast chargers everywhere, and we need cars charging during daylight hours to balance what will become a solar-dominant grid. Consider the average parking spot. At about three metres wide and seven metres long, it could accommodate 20 square metres of solar panels. This space alone would produce on average about 16kWh a day, more than enough to cover the typical daily distance travelled by car. If our parking spaces around the country powered our vehicles, they could be charging at schools, workplaces, shopping centres, train stations and bowling clubs.
One criticism of EVs has been the sticker price. But their economics already stack up and are fast becoming more attractive. The price gap between a petrol-fuelled car and the equivalent electric version has already plummeted from about $50,000 five years ago, to $20,000 in 2022. Australia’s two favourite vehicles, the Toyota HiLux and Ford Ranger, have electric equivalents in the US: the Rivian and the Ford F-150 Lightning. Our third and fourth favourite cars, the Toyota Corolla and Hyundai i30, have perfectly decent electric substitutes such as the Nissan Leaf, Hyundai Kona, or MG ZS. Drive these electric vehicles for a decade and you will save more on fuel than the extra cost of purchasing. The future is here and it’s cheaper.
With so much to gain, how do we chart a path to success?
The first practical step is to rethink the use of public money. According to research from the Australia Institute, governments provided $11.6 billion in subsidies to the fossil fuel industry in 2020-21. The largest portion, almost $8 billion, was a fuel excise subsidy, meaning we directly or indirectly supported foreign countries engaged in global heating, some of whom also practice belligerent foreign policy. Imagine if we reoriented our subsidies towards electrifying vehicles. Just 21,000 electric vehicles sold in Australia last year. If we covered the petrol-electric gap of $20,000 a vehicle, $8 billion would subsidise 400,000 purchases – just under half the number of new vehicles Australians buy each year.
In practice we couldn’t get 400,000 electric vehicles next year, and certainly not the Rivians, Tesla Cybertrucks and Ford Lightnings that people really want. We could afford to underwrite the development of this market. But we could also afford to pursue manufacturing vehicles in Australia again, perhaps with Toyota, which needs to catch up on EVs globally.
People will complain this is a subsidy for wealthy people to get a Tesla, it doesn’t have to be. It could eliminate the worst emitting vehicles on our roads through an upgrade program of our oldest vehicles with financing to appeal to the lower-income households for whom it would make the biggest difference.
We could and should ratchet up our support for EVs while we ratchet down support for foreign oil. Industry analysts expect that 2025 or 2026 will be the year electric vehicles will be roughly the same price in the showroom as the internal combustion vehicles they are replacing, and subsidies won’t be necessary.
This answers the other big question posed by opponents of EVs: “How do we fund roads?” At 44.2 cents a litre, our fuel excise amounts to about 4-5 cents a kilometre. There will be more than enough savings from EVs to cover this amount. When and how it should be applied is the question. I’d advocate for later, so we firmly establish the EV market and incentivise more manufacturers to bring their vehicles to our market. I’d also advocate charging proportional to vehicle weight and kilometres travelled, which would provide incentives to drive less, in lighter vehicles that do less damage to the roads. That would be a much-needed antidote to the ever-increasing waistlines of our vehicles. Charging infrastructure is the next great priority and we can’t build charging stations fast enough. About 7000 service stations sell fuel today, and conservatively we will need up to 20 fast-charging stations per 1000 vehicles.
Australia doesn’t get many electric vehicles compared with nations that have emissions standards and zero-emissions targets for their vehicles. We should have a zero-emissions policy but it should be designed with an awareness that Australian driving conditions and vehicles are unique, and to unfairly penalise diesel vehicles in the early years of this transition would lead to another culture war. Diesel vehicles are popular in Australia, especially in the bush because they’re tough. Electric vehicles will eventually topple them, but while the rest of our fleet goes electric there is a reasonable argument for a medium-term regional diesel carve out.
The final practical step is to encourage electrified mobility. Electric scooters, electric bikes and even electric golf carts are phenomenally efficient at moving us around, at about 15-, 20- and 40-watt hours a kilometre, respectively. Encouraging these vehicles is a practical way of getting people out of their cars for short trips. Australia has the most egregious electric bike rules in the world, with impractically low speed and power limits. Why can cars have as much power as they want, yet we limit power on small electric vehicles, which slows them travelling uphill, where they need the help? We could even use tax and insurance and registration law to promote smaller neighbourhood vehicles such as the Kei car class of Japan – the origin of many of our favourite small cars, including the Suzuki Swift and Suzuki Jimny.
A clever way to do this would be to lower local speed limits – which will make pedestrians safer and vehicles more efficient, as well as raising the speeds and power limits on bikes and scooters.
Electrification promises so much to Australia. We have all the technology and more than enough sun. For the first time, we can contemplate a future of abundance where the planet remains liveable. We can still drive to see friends and family and return to an airconditioned home to cook a hearty meal. The only thing that changes is the ultimate fuel source comes from above rather than below.
This article was first published in the print edition of The Saturday Paper on June 11, 2022 as "Electric avenues".
For almost a decade, The Saturday Paper has published Australia’s leading writers and thinkers. We have pursued stories that are ignored elsewhere, covering them with sensitivity and depth. We have done this on refugee policy, on government integrity, on robo-debt, on aged care, on climate change, on the pandemic.
All our journalism is fiercely independent. It relies on the support of readers. By subscribing to The Saturday Paper, you are ensuring that we can continue to produce essential, issue-defining coverage, to dig out stories that take time, to doggedly hold to account politicians and the political class.
There are very few titles that have the freedom and the space to produce journalism like this. In a country with a concentration of media ownership unlike anything else in the world, it is vitally important. Your subscription helps make it possible.
Select your digital subscription