Australia’s car purchases largely comprise less fuel-efficient vehicles, resulting in higher emissions per kilometer compared to nations like Japan, the EU, and the US. Despite a pandemic-induced drop, transport sector emissions continue to rise, hindering the nation’s progress towards a net-zero future. Electric vehicles offer the swiftest path to emissions reduction, but supply constraints pose a challenge.
Currently, Australia’s transition to electric vehicles lags significantly behind other nations. In 2021, hybrid and battery electric vehicles accounted for merely 3.8% of new car sales. With individuals retaining vehicles for extended periods, the Electric Vehicle Council estimates only 0.5% of Australia’s cars were electric by the end of 2021. Countries like Norway lead the way with 25% of vehicles being electric by the end of 2021, while China and New Zealand also surpass Australia’s adoption rate.
The government aims to increase electric car appeal through fuel efficiency standards, limiting emissions from vehicles on the road. These standards incentivize car manufacturers to introduce their latest, cleanest models into Australia. Penalties are imposed on manufacturers who fail to meet the average fuel efficiency threshold, which gradually increases over time, encouraging adoption of low- or zero-emissions alternatives.
While fuel efficiency standards have been debated in Australia for years, the government has resurrected them with implementation details yet to be finalized. The targets, penalties, and ambition of these standards will significantly impact their effectiveness and the affordability of electric cars. Consultation is underway, and decisions will shape Australia’s trajectory towards reduced emissions and increased electric vehicle adoption.