Teslas are going to get cheaper, but not because of the government Media Man Int

Teslas are going to get cheaper, but not because of the government - 24th January 2018

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Minister for Urban Infrastructure Paul Fletcher and Minister for Environment and Energy Josh Frydenberg during an electric car event on the front lawn of Parliament House in Canberra in May last year. Photo: Alex Ellinghausen

by John McDuling

Australia's energy culture wars have become so poisonous that even the slightest hint of government support for electric vehicles (EVs) is met with knee-jerk hostility.

Earlier this month, in these pages, federal Energy Minister Josh Frydenberg gently suggested that an electric vehicle car revolution was imminent and that Australian consumers will benefit.

He didn't make any concrete proposals on the issue, just a vague call for more co-ordination between various arms of government to promote EV uptake.

Yet Frydenberg's thought-bubble triggered anguish in climate sceptic circles.

Tesla CEO Elon Musk at the wind and solar battery plant outside of Jamestown, South Australia. Photo: AAP

It's worth pointing out right here, right now, that it's extremely unlikely the government will move to directly subsidise electric cars anytime soon.

As things stand, these vehicles are pretty expensive. As Frydenberg pointed out, 13 of the 16 models on sale in Australia have a sticker price north of $60,000. Subsidising sportscars for the wealthy is never going to fly politically.

If anything, there is a chance that in the short term, EVs might actually be taxed even more. At least, that's what Tesla, the most famous EV maker is worried about.

An upcoming review by Urban Infrastructure minister Paul Fletcher could consider a road user tax on EV drivers (who don't use petrol, or pay taxes at the pump that are used for road funding).

Tesla points out its owners already pay the luxury car tax - a tax designed to protect manufacturing jobs that no longer exist - as well as GST on electricity.

It seems extremely unlikely the government would want to pick a fight with Tesla's billionaire chief executive Elon Musk, the greatest corporate showman since Steve Jobs, over an issue like this. But the politics of energy in this country are so fraught and weird that maybe nothing can be ruled out.

At any rate, the mini-kerfuffle over electric cars does raise an important question: should Australia - an early adopter of most consumer technologies, but a laggard on EVs - be doing more to promote uptake of them?

Arguments against the idea seem to rely on claims that electric cars might actually emit more pollution than traditional ones.

Since electric cars are powered by electricity, and since electricty in this country still mostly comes from coal, this argument might seem plausible.

Yet at least one academic, Gail Broadbent, a researcher at the University of New South Wales, rejects it out of hand.

Her analysis of 11 high emissions countries found that only in places where coal powers upwards of 90 per cent of electricity, such as South Africa, would EVs emit more carbon dioxide per kilometre than traditional cars, when driven.

It feels weird to even have to write this in 2018, but there are other benefits in moving away from a technology entirely dependent on fossil fuels (the internal combustion engine), which accounts for a significant chunk of world pollution, to one that can, in theory and in practice, be powered by renewable energy sources that do less harm to the environment.

These include reducing reliance on imported oil, improving public health and, according to the Finkel review, boosting electricity grid stability and reliability.

That said, since prices might not be the biggest factor inhibiting EV uptake, even Broadbent doesn't support direct subsidies for them.

Instead, she favours more modest initatives, such as some funding for charging stations in regional areas and small towns, education to lift trust, and changes to procurement policies to allow EVs to be added to government fleets.

It feels like you would have to be pretty far down the rabbit hole of the energy debate to be violently opposed to things like that?

The rise of EVs over the next few decades seems inevitable.

Bloomberg New Energy Finance forecasts that electric cars will account for more half of global new car sales by 2040.

Analysts from investment bank Morgan Stanley (notoriously ebullient on this topic) forecast that there will be 1 billion battery-powered EVs on the world's roads by 2050 - 57 per cent of all of the earth's cars at that point.

This will be driven by a confluence of factors: mostly declines in the prices of batteries, increased competition, and stricter standards on conventional cars, but also subsidies for EV in some countries.

In any case, the whole debate around EVs might seem moot in the context of an even more transformative technology change on the horizon: the rise of autonomous vehicles.

Self-driving cars could be on the roads in major cities in the United States as soon as this year. And, according to some (admittedly utopian) forecasts, they could have pretty significant presence on the roads within two decades.

This could affect society in all sorts of dramatic ways - rendering some jobs obsolete, reducing (or increasing) road congestion, potentially even transforming real estate markets like the automobile (which underpinned a flight to the suburbs) did.

These sorts of issues will pose a much greater challenge to policymakers than the underlining energy that powers them.

Which, as it turns out, will mostly be electricity.

(The Sydney Morning Herald)