Electric vehicle manufacturers push for fuel efficiency standards to increase uptake of cars, hit net zero by 2050

Australia has a new electric vehicle strategy, but experts say there is a long road ahead. (ABC News: Curtis Rodda )

Car manufacturers say Australia needs to urgently adopt fuel efficiency standards in line with other countries to help promote the uptake of electric vehicles, warning it will otherwise be unable to reach net zero emissions by 2050.

The federal government last week announced its EV strategy, which includes plans to legislate fuel efficiency standards by the end of the year.

But electric vehicle manufacturers are concerned the fuel efficiency standards do not align with those set by other countries and will hinder the federal government's aim to reach net zero emissions.

"The concern really is that if Australia doesn't get the fuel efficiency standard quite right, that it will just continue to sort of dwell at the bottom of the pile again," said Laurissa Mirabelli, the spokeswoman for Polestar, Volvo's dedicated EV brand.

"We really need to push forward."

She said Polestar was "cautiously optimistic" about the future fuel efficiency standard.

"The fuel efficiency standard really has to play into the government's own …target to reduce emissions by 43 per cent by 2030," she said.

"But when the transport minister said that it had to be in line with Australia's unique position, that's a little bit of a concern for us, particularly given almost 70 per cent of Australians live in a capital city."

She said to push forward, polluting car manufacturers needed to be penalised.

"We really need to really make it attractive for manufacturers to send zero-emission vehicles here in particular, but equally low-emission vehicles, and really push forward Australia's decarbonisation of its fleet," Ms Mirabelli said.

"It's an easy option for us to do, and it's something that we really should be committed to do."

Laurissa Mirabelli says the federal government's fuel efficiency standards are just a start.  (ABC News: Simon Tucci)

Australia 'at the back of the pack'

Fuel efficiency standards vary across the world, but the toughest standards are in Europe, which is aiming for zero CO2 emissions by 2035.

The US and New Zealand have the next-toughest standards. While the world's biggest market, China, sits at ninth on the list. 

	Country/region	Year of target	Emission target (grams of CO2 per km)
1	European Union	2035	0
2	USA	2032	44
3	New Zealand	2027	63
4	South Korea	2030	65
5	Japan	2030	74
6	Canada	2026	76
7	Chile	2030	81
8	Mexico	2025	87
9	China	2025	93
10	India	2022	113
Australia's 2022 average across new vehicles sold is 154gCO2/km. Source: The International Council on Clean Transportation, 2022.

Australia and Russia are among only a handful of developed nations without fuel efficiency standards.

According to the federal Department of Transport, that explains why there are more than 200 models of EVs available in the European Union, compared to just 60 in Australia.

Carl Tidemann, a senior researcher in climate solutions at the Climate Council, said Australia should look to model its fuel efficiency standards on those in New Zealand, the US and EU to avoid becoming a "dumping ground" for "dirty cars".

"They [fuel efficiency standards] need to be in line with other countries to make sure that we're still not going to be the end of the line for some of those cars," he said.

"Making sure that we're setting our fuel efficiency standard … in line with other countries will be really important."

John Quiggin, a professor of economics at the University of Queensland, said a lack of EV charging stations around Australia was one reason why there had been a slow uptake of EVs.

"Australia is very much at the back of the pack on electric vehicles," he said.

"Although the situation's improved, there still only a limited number of charging stations on major highways.

"If one of them breaks down, you can have significant disruptions to a trip, so we really haven't got a large network.

"Of course, there's a chicken and egg problem with no incentive to buy vehicles, or there's not much of a commercial incentive to provide charging stations."

John Quiggin says Australia needs to roll out more electric vehicle infrastructure to help encourage uptake.  (ABC News: Curtis Rodda)

Mr Quiggin said the longer Australia waited to implement fuel efficiency standards, the more polluting vehicles would be imported to Australia.

While that was occurring, he said it would be harder for Australia to reach net zero carbon emissions by 2050, and "drastic measures" would be needed to meet that target.

"It is urgent," he said.

"We're looking at trying to have a complete transition by 2050. Cars we sell in 2030 will still be on the road. 

"So if we haven't made a big shift towards electrics by then, we're really going to have to take drastic measures if we're going to decarbonise the entire fleet by 2050."

Driving down prices

The affordability of electric vehicles is another reason why the uptake is considerably lower, according to the car lobby.

In addition to there being a lack of charging infrastructure, Tony Weber from the Federal Chamber of Automotive Industries said current EVs were simply too expensive for many people.

"If the price of the new technology is too high, we will not have the adoption, so any CO2 target in the world [is pointless] if people cannot afford to purchase the products," he said.

"I think we should leave it to the experts, and that is the motor vehicle companies around the world.

"The challenge for the Australian government is to have an ambitious but achievable target, and that means providing the product Australians want to drive at a price point they can afford."

Purchasing an EV is out of reach for many people due to their high prices. (ABC News: Curtis Rodda)

There are signs the price of EVs may be coming down, making them more accessible.

Last year, Chinese car maker BYD overtook Tesla for total sales of electric vehicles.

And Tesla CEO Elon Musk has announced his intention to cut the prices of his company's models as competition in the EV market heats up.

Ms Mirabelli said more competition in the Australian market would ultimately help bring down EV prices — and as more EVs were introduced, a second-hand market would naturally develop, making them even more accessible.

"What we also really need to consider is our second-hand market," she said.

"It's imperative that governments shift their fleets over to electric vehicles to help ensure that in a couple of years' time we've got a really solid used-car market of electric vehicles to help more low-income earners get into electric vehicles at a more reasonable price," she said.