Is Labor serious about electric vehicles?

Thank you, Bill Shorten. At last, a politician is acknowledging the elephant in the room (or, in this case, the city) – cars. Yes, cars.

Our political leaders have been selling us the line for years that building mega public transport projects will somehow solve all the problems of cities. It suits them because it means they can avoid policies like higher taxes and charges on driving that would make motorists deeply unhappy.

Our cities desperately need better public transport, but when cars account for 90% of travel in capital cities, it's folly to ignore the pressing need to "tame" the excesses of the four-wheeled beast.

The transport component of Labor's Climate Change Action Plan finally promises a serious attack on emissions from cars, principally by implementing stronger standards as well as a National Electric Vehicle Policy.

If elected later this year, the party promises to put in place a standard of 105g CO2/km for new light vehicles, although the start date isn't specified. Labor also promises electric vehicles (EVs) will account for half of new vehicle sales by 2030, although how that will be achieved is pretty vague.

The proposed emissions standard would be a huge improvement on the current level of 182g CO2/km for new passenger and light commercial vehicles.

While it's a step in the right direction, Labor's Plan nevertheless highlights the lack of a coherent urban transport policy at either the state or federal level. It'll help encourage more efficient and smaller vehicles, but all political parties still lack effective policies to address congestion and to make cars materially slower, quieter and less dangerous for vulnerable road users.

Labor's EV policy reflects this narrow thinking. While EVs should, and I expect will, dominate sales at some stage in the future, there are some serious issues associated with an EV-dominant world that Labor's policy ignores.

A key one is the likely increase in travel spurred by EVs. Their running costs are lower compared to vehicles powered by (heavily-taxed) petrol and diesel. While that helps make EVs attractive, it will inevitably encourage more driving, with consequent negative impacts on the amenity of streets, the safety of roads for pedestrians and cyclists, the viability of public transport, the level of traffic congestion, and the density of cities.

Another issue overlooked in the policy is the huge increase in generating capacity that will be required to meet the demand for electricity when EVs win substantial market share. Local solar is often portrayed as the likely source, but EVs are energy intensive and require a large PV array over and above that necessary for domestic or office uses. The increasing number of households living in multi-unit accommodation (e.g. 47% in Greater Sydney) presents another constraint on the potential of local solar.

Nor does Labor's policy provide any response to the reduction in fuel excise revenue that would flow from widespread use of electricity instead of oil. Directly taxing the use of road space by vehicles seems the obvious alternative, but Labor's policy is of course silent on this politically sensitive topic.

Maybe I'm expecting too much; after all, this policy is about politics not good government. It's a marketing document. The lack of evidence and analysis is obvious in the unsupported claim that a Shorten government will lift EVs to 50% of new car sales by 2030. On the basis of what's in the document, the kindest thing that can be said is it's an ambitious target.

Current sales of new passenger cars in Australia are around 1,000,000 p.a. and the size of the nation's total fleet of passenger cars is in the region of 14,500,000 (there's another 3.2 million light commercial vehicles e.g. panel vans, utilities). Suppose on the basis of recent trends that by 2030 annual sales of cars increase to 1,200,000 and the size of the national car fleet increases to 17,200,000.

Given those assumptions, Labor is anticipating 600,000 EVs will be sold in Australia in 2030. That would require a truly phenomenal rate of growth given only around 2,500 EVs were sold in Australia last year. That's average annual growth of around 75% p.a.; it's faster than Moore's Law!

It would be remarkable because the only direct incentive Labor is offering is a $20,000 deduction off the purchase price of company vehicles. There're no direct incentives for private motorists. Moreover, it's likely the 105g CO2/km standard won't be phased in fully until 2025, as recommended by the Climate Change Authority.

It looks ambitious given that only around 20% of Australian dwellings have solar panels, notwithstanding subsidy programs like the Solar Homes and Communities Plan introduced in 2000.

EVs made up 31% of new car sales in Norway last year but they're heavily subsidised by full or partial exemptions from import duties, road tax, sales tax, stamp duty, and company car tax. They also have access to free council parking, use of bus lanes and exemptions from road tolls.

Labor seems to be assuming that the saving from using electricity rather than heavily taxed petrol or diesel will be such a huge incentive that half of all buyers will switch to an EV in 2030. It claims the average driver could save "up to $2,300 from reduced fuel and maintenance costs".

I expect that's a cherry-picked figure, but it's instructive that the higher running costs of SUVs haven't stopped buyers increasingly preferring them over smaller cars. Labor's promise gives EVs only a short time-frame in which to overcome the barriers of high prices, slow charging times, and the perception of limited range.

Some car companies are claiming a range in excess of 300 km and 30-minute charge times, but experience with manufacturers' artificial fuel economy, emission and pollution tests suggests these assertions should be treated with caution.

Another issue is that any market drift toward smaller cars – as Labor's 105g CO2 policy is designed to achieve – will reduce the advantage of EVs over conventional cars. There's also the possibility that the price of petrol could fall significantly in real terms as oil producers belatedly seek to stall the global shift away from oil.

Nevertheless, if Labor's promise is taken as face value, there might be around 1,500,000 EVs on the nation's roads by the end of the next decade. Yet that'd only be around 9% of the national passenger vehicle fleet in 2030. Since cars account for around 10% of Australia's GHG emissions, that would be a relatively modest pay-off in the context of the need for urgent action on climate change.

So, thank you Bill for recognising the need to take action to improve emissions from cars and for promoting the role of EVs. However, if you win next month's election please have a serious look at what a shift to EVs really entails, including the potential downsides, and the actions government should take to expedite the transition. And while I know it's politically difficult, please don't overlook the other problems associated with cars, especially in our crowded cities.