More needs to be done to accelerate electric vehicle sales in Australia, with experts warning it will take some time until supply can meet demand and also build the infrastructure needed to support them.

President of the Australian Electric Vehicles Association Chris Jones said the uptake of electric vehicles is generally well supported by federal and state governments, but barriers stopping consumers from buying them remain.

“It is becoming better supported, we were a bit late to the party so I think we’re seeing a big flurry of action in recent times,” Mr Jones said.

“People don’t need a huge amount of encouragement to buy EVs, they’re quite compelling because they’re clean and they cost you very little to run. They sell themselves, and that is evident by demand outstripping supply pretty significantly.”

Electric vehicles accounted for 3.8 per cent of all new vehicle sales in Australia in 2022, almost doubling from 44,000 in 2021 to 83,000, according to yearly sales data from the Electric Vehicle Council (EVC).

The EVC expects sales this year to be more than 100,000.

This is behind world leaders like Norway, where nearly 80 per cent of all sales are EVs, and New Zealand, at close to 15 per cent.

Prices fall

Mr Jones said supply issues create high prices in the EV market, but more affordable options are becoming available in Australia.

“The two Chinese vehicles, BYD and MG, are coming in under $40,000 which is pretty darn good,” he said.

“If you’re in the market for a new vehicle and choose not to buy an EV and can afford one, that’s pretty unconscionable.”

Automaker MG offers an electric vehicle for under $40,000. Photo: AAP

The Australian EV market is currently valued at $6.38 billion, and will continue to expand as more affordable options become available and supply increases.

Incentives

The federal government launched its electric vehicle strategy in September 2022, which included up to $2000 in rebates for the purchase of electric battery and plug-in hybrid vehicles, and fringe benefits tax exemptions for fleets of EVs.

Low emission vehicles also have a higher threshold for the luxury car tax, having been raised from $71,849 to $84,916.

In Victoria, the state government was offering a $3000 subsidy on the first 20,000 EVs, however, this offer was discontinued from June 30, 2023.

The state government received criticism over the introduction of a road-user charge from July 1, 2023, to offset the reduced fuel tax.

Queensland offers a $6000 rebate for vehicles valued up to $68,000, for households with a combined income of $180,000 or less, reduced to $3000 for households earning over the threshold.

The state also offers lower car registration prices and stamp duty rates.

New South Wales offers a $3000 rebate on the first 25,000 EVs sold, waiving stamp duty on vehicles under $78,000 and discounted registration.

The state will also introduce a road users tax, which will come into effect on July 1, 2027.

The ACT offers two years of free registration on EVs until June 30, 2024, 20 per cent off registration fees for older EV models, the stamp duty waived for new vehicles and access to $15,000 in interest-free loans for purchases of electric vehicles up to a cost of $77,565.

South Australia offered a limited-time subsidy of $3000 for the first 7000 cars sold, and three years of free registration until June 30, 2025, and up to $2000 in rebates to install smart chargers at home for the first 7500 homes.

The state originally tried to introduce a road tax for EVs in 2022, which was pushed back until 2027 and then repealed by the state Parliament after a heavy public backlash.

Encouraging uptake

The EVC has recommended introducing fuel efficiency targets, and stronger incentives worth $10,000 to reduce the upfront cost of a purchase in an effort to resolve supply issues.

Mr Jones said one way to encourage investment would be to manufacture components and parts of EVs in Australia.

“I don’t know if it will change the price, but it will certainly improve the supply chain for stability for electric vehicle components,” he said.

“Would we make complete cars here? A lot of people would love that, but I’m not sure there is a business case for it. We certainly could make batteries and other components.”

EV technology continues to improve year after year, with Toyota recently announcing its new solid-state battery technology, which it claims will allow trips of nearly 1500km on a single charge.

Mr Jones said he believes once supply issues are resolved, the next big bottleneck will be charging infrastructure.

“The thing is, they can be big power consumption facilities with high peaks, you need to make sure that the electricity network is able to support a one-megawatt charger installation for instance,” he said.

“That’s going to take time, and it’s going to take money, but we’ve done more expensive things in the past.”

An electric vehicle charging station at Bundall, on the Gold Coast. Photo: AAP

The federal government committed $500 million through the Driving the Nation Fund in the 2022-23 budget, which included funding for 117 EV charging stations.

States are also heavily investing in charging infrastructure, with hundreds of stations earmarked and funded to be built.

The Electric Vehicle Council was contacted for comment.