“Technology not taxes”: Supporting BEV affordability in Australia

affordability

The Reliable Affordable Clean Energy (RACE) for 2030 co-operative research centre have awarded $220,000 to researchers from Monash Business School and Griffith University to investigate taxation solutions to support the affordability of electric vehicles and charging infrastructure. 

Monash Business School’s Dr Kraal and Griffith University’s Dr Mortimore are specifically aiming to fix the lack of home charging infrastructure and affordability, as top barriers for adopting battery electric vehicles (BEVs) for business fleets. 

This follows the federal government allocated $25 million to drive electric vehicle uptake with a “technology not taxes” approach.  

Dr Kraal and Dr Mortimore are researching how the transition to emissions reduction should be facilitated by the Australian taxation system, together with advancements in technology. 

Transport is responsible for nearly a fifth of Australia’s total CO2 emissions. Transforming business fleets to comprise clean energy vehicles would be a huge step forward in national emissions reduction, Dr Kraal said. 

“In 2020, Australian business fleets acquired mostly petrol and diesel vehicles, resulting in the sector producing a higher weighted average CO2 emissions, 185 grams of CO2 emission per kilometre, 41 per cent higher than Europe in 2018,” Dr Kraal said. 

“Given business fleets make up the majority of passenger and light commercial cars on the road, we feel there’s greater impact in focusing on fleet vehicles.” 

“Accelerating the uptake of BEVs by business will not only allow fleet employees to experience driving and charging fleet BEVs, without having to own one, but it will also contribute to the supply of more affordable BEV’s to private consumers when ex-fleet BEVs are rolled over to the second-hand market,” Dr Mortimore said. 

The project, “Business fleets and EVs: Taxation changes to support home charging from the grid and affordability,” will look at how taxation support is the key to exponentially increasing BEVs in fleets. 

The project is examining the increased take-up of BEVs in fleets overseas. The incorporation of zero-emission vehicles in the fleet mix is an area where Australia is lagging behind much of the world.  

“Currently, BEV technology is not affordable in Australia and workplace charging infrastructure is either low or non-existent,” Dr Mortimore said. 

“Our project will investigate the barriers to business fleets uptake of BEVs through taxation changes and incentives, that will address affordability and enable fleet employees to charge their BEVs at home.” 

The UK, France, Germany, Denmark, Norway and Italy all have a significant penetration of BEVs, when compared to Australia, as a result of government tax support. 

As far back as 2012, the EU government has been paving the way for widespread BEV usage in fleets by granting widespread tax relief for business users to charge their cars. In 2021, there is a stronger focus on BEVs over hybrid models. 

“In 2020, Norwegian cars collectively emitted 60 grams of CO2 per kilometre. In Germany it was 131g per kilometre,” Dr Mortimore said. 

“And in Australia, it was 185g for business fleets (exceeding the national average of 180 grams of CO2). We need to be aiming to lower CO2 emissions to keep global warming below 1.5-2 degrees Celsius,” Dr Mortimore says. 

“The future of low emissions transport is BEV and Australia needs to be ready.” 

“The Australian government has already acknowledged that business fleets are an effective pathway for early adoption of electric vehicles,” Dr Kraal said. 

“However, there needs to be clear guidance on how to implement incentives and how new technologies will be treated from a taxation perspective for those that use their vehicles for business purposes.” 

To learn more about the project, visit https://bit.ly/3i6LntV  

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