Living in electric dreams

Over the past few weeks, we have heard a lot about the promise of Electric Vehicles (EVs) since the announcement by Opposition Leader Bill Shorten regarding the ALP's national EV policy package. The ALP's new policy sets an arbitrary target of 50% by 2030 for all new vehicles sold in Australia to be EVs. It aims to achieve this target through $100 million in investment to provide 200 fast charging stations and another $100 million on other initiatives to promote EV uptake, predominately subsidies and tax incentives.

There is no doubt EVs are, in policy terms, 'sexy' and have that feel-good factor about them. Indeed Bill Shorten is convinced that all-electric vehicles are the next big thing. Perhaps they are. Yet Labor's policy fails to detail exactly how it will resolve key challenges to EVs in the Australian market such as affordability, mileage, and consumer choice. Nor does it fundamentally explain why taxpayer dollars are required to ensure consumers buy EVs and for what societal benefits, other than the vague notion of saving the planet. It feels more like a policy developed to virtue signal the ALP's climate change credentials during an election, rather than seriously address any real environmental concerns. And like much policymaking these days, it seems to be based on "wishful thinking" and "conventional wisdom", that more often than not turns out to be wrong.

If it sounds too good to be true…

The history of the EV stretches further back than most people realise. The first crude electric vehicle was developed in 1832. Since the turn of the 20th century, car manufacturers, inventors and journalists have been spruiking EVs as the 'next big thing'. Indeed, in The Washington Post in 1915, one journalist reported that "Prices on electric cars will continue to drop until they are within reach of the average family." In the wake of the 1970s oil crisis, again The Washington Post reported that GM had found "a breakthrough in batteries" that "now makes electric cars commercially practical, with a 100-mile range that General Motors executives believe is necessary to successfully sell electric vehicles to the public." It is an industry that has over-promised and under-delivered for over a century. While it is true that much progress has been made over the past decade, with advances in battery technology and materials, EVs still make up a small percentage of cars sold worldwide compared to their internal combustion engine vehicle (ICEVs) counterparts. Of the 86 million vehicles sold in 2017, only 1 million of them were electric. In Australia, the figures are even more dismal, with EVs only making up a fraction of a percent.

Challenge 1: The consumer

One of the biggest barriers that EVs will need to overcome will be Australian consumers. Like other frontier nations such as the US and Canada, consumer habits and expectations have been set by ICEVs. These include driving long distances without range concerns, quick and convenient fill-ups and being able to choose from a wide selection of manufacturers and models, some of which are inexpensive, while others meet special requirements (such as SUVs and Utes). In the Australian context, the last point is an important consideration. This is evidenced by the fact that the top 10 most sold cars in Australia according to CANSTAR include the Toyota Hilux, Mitsubishi Triton, Toyota Landcruiser, and Ford Ranger. These are not only transport choices, but they are also lifestyle choices, because of what they enable the driver to do and where they enable the driver to go.

Australia also has a larger and older used car market than in the UK or Europe. This makes purchasing and owning a car significantly more accessible and affordable for those on low incomes. No doubt there is a range of issues associated with this, but nevertheless, it is a factor that should not be overlooked. Thus EVs, for now, remain outside the budgets of low-to-middle income earners. As such, mass adoption of EVs by Australian consumers, will not happen anytime soon until there are significant reductions in price and where the driving experience is equivalent to ICEVs.

Challenge 2: Charging Infrastructure

Availability of charging infrastructure is one obvious precondition to the mass adoption of EVs. Unlike other countries, Australia faces some unique challenges. The population is concentrated in urban centres, but these centres are separated by vast distances. This is demonstrated by the fact that Australia's road network measures 877,651 km in length - twice the distance of the UK's road network and 9 times the size of Norway's, two countries cited as examples for Australia to follow. Thus, for EVs to make serious penetration in the Australian market, serious thought, therefore, must be put into resolving questions such as: what type of charging technology should be deployed; who will provide the necessary capital for public charging; and where such charging infrastructure should be located, particularly outside city centres. These questions will be particularly relevant while EV utilisation rates remain low.

Challenge 3: Electricity Capacity

Another obvious precondition to mass adoption of EVs is electricity generation capacity to be available. Given the current perilous state of Australia's electricity grid as a result of over-investment in intermittent renewables and underinvestment in dispatchable generation, there are questions over the grid's ability to absorb the extra demand created by EVs. This is particularly relevant given the need for the AEMO to constantly intervene in the market to maintain the stability of the grid. Australians are also seeing the cost of their electricity soar, with some parts of Australia having some of the highest electricity prices in the world. As Madison Czerwinski and Mark Nelson from Environmental Progress noted, "expensive electricity acts as a disincentive to electrify transportation" among other things. Yet again serious thought needs to be put into where the extra capacity to recharge batteries - on-demand - will come from and that it is affordable for consumers.

Challenge 4: Environmental impact

EVs biggest selling point - that they are good for the environment - is misleading at best. It is true that EVs win the direct-emissions battle against ICEVs. Yet sadly, EVs fall down in other ways.

Batteries remain EV's biggest sore point, in terms of materials used, where they are manufactured and how they are disposed of. The standard choice battery is the lithium-ion battery, which is made up of nickel, graphite, lithium, and cobalt. Each of these materials poses its own unique environmental and public health risks. This is evidenced in places such as China, where the bulk of lithium-ion batteries are produced and where a growing portion of EVs are manufactured. Cases of rivers being poisoned and towns smothered in graphite dust are a result of the growing demand batteries combined with China's lax environmental regulations.

Then there is the horror that is cobalt mining, a highly toxic niche metal that sourced primarily from the Democratic Republic of Congo, a country with a horrendous human rights and environmental record. Even with efforts by some manufacturers such as Tesla to reduce the use of cobalt in batteries to minimal levels, demand for cobalt is predicted to increase at least 10 times by 2030 under current policy settings. Batteries and other components for EVs do not grow on trees but are the end result of lengthy, intrusive and toxic mining and industrial processes.

The manufacture and charging of EVs are also only shifting the source of emissions from the engine to the manufacturing and power plants. This is particularly true of cars manufactured outside of the OECD, while coal and gas will remain core components of Australia's electricity grid for a few decades yet. Analysis done by the Manhattan Institute shows that any reductions in emissions achieved through the adoption of EVs will be minimal.

Then there is the issue of what to do with used batteries. Today in Australia, only 2% of the country's annual 3,300 tonnes of lithium-ion battery waste is recycled. While 95% of a lithium-ion battery can be recycled, to date there are no programs in place to do so. Most waste is shipped overseas, while the rest ends up in landfill.

Finally, there is the glaring issue that low-occupancy private motorised transport remains the least efficient and most environmentally unsustainable mode of transport, regardless of whether it is electric or not. EVs will do little to solve the inter-related problems of traffic congestion and urban sprawl that results in environmentally destructive road building, poor land use, and social inequality. Indeed, the Australian Automobile Association has stated that in 2015 congestion cost the Australian economy $16.5 billion and that without major policy changes, congestion costs were projected to reach between $27.7–37.3 billion by 2030. EVs will also continue to maintain the status quo, in terms of the primacy given to cars in city design and planning, retaining the focus on parking spaces and roads rather than footpaths and cycle paths.

Better ways to spend taxpayers money

Instead of wasting limited public resources pandering to green inner city latte sipping elites, policymakers on both sides of politics should be pursuing policies that deliver real societal and environmental benefits. Some of these ideas would actually encourage and support the growth of the very technology the ALP are advocating for. These could include:

• Decarbonising the electricity gridwould see the biggest gains in terms of emission reduction. But renewables cannot do this alone without imposing significant costs on consumers and business. Lifting the ban on nuclear power would help resolve the energy trilemma of affordability, reliability and zero carbon and support the deployment of renewables to where they can provide the most benefit. Nuclear power could assist in the rapid electrification of transport, provide heat for industrial processes and necessary energy to desalinate and recycle water in times of drought, taking the pressure off our struggling river systems.
• Investment in the electrification of transportation, particularly freight, would be of benefit. Where investment in EV technology makes more economic sense is for electric buses, taxis, car sharing, and rentals, government fleet vehicles, and light freight vehicles - essentially modes of transport that move more people and things rather than one individual.
• Investment in better city design and planning that encourages mixed-use design, density and improves the connectivity, walkability, and cyclability of Australian cities. This will get people out of cars and onto mass transit, the cycle path or footpath, where possible, providing a wide range of environmental and health benefits.
• Policies that encourage better housing design suited to Australia's diverse climatic condition - what works in tropical North Queensland is not necessarily suitable for Tasmania and vice versa.

There is no doubt that EVs will over time take a greater share of the market and have a place alongside hybrids and efficient ICEVs. But the ALP's policy needs to be seen for what it is - a virtue signaling vanity project that if implemented will add more cost to the consumer, while seeing taxpayer dollars lining the pockets of foreign car manufacturers, cherry picking one technology over another, for little environmental benefit. Their EV policy will only aid those early adopters who are concerned primarily for the environment or at least for being seen by others as environmentally responsible. Furthermore, like many other green-related public benefits, assistance for EVs will flow almost exclusively to individuals who are already well off and who don't need it.