All the talk this week is Electric Cars, thanks to Labor’s electioneering everyone is talking about them. Setting targets is one thing, but just how do the numbers stack up?
I’ve crunched some of the numbers, and while these are very top line and based off current data – there’s some real finger in the wind work you’ve got to do on any projections – but lets just look firstly at the Bill Shorten plan.
Mr Shorten and Labor have pledged a target of 50% of all NEW Vehicles sold by 2030 are to be Electric. Today, around 1.1-1.2 million new cars are sold every year.
The total number of cars on the road in Australia is around 19 million. New car sales are growing at around 2% per year, as is the total number of registered cars. Using those numbers alone we can forecast that in 2030 there will be 24,350,000 cars on the road in Australia. In that same year, some 1.5million cars will be sold.
That means that in 2030 we need to sell 769,000 Electric Cars. WOW. Just straight up – that’s impossible. Think about ramping up to that number, it would need tens of thousands to be sold per year in just the next couple of years – hundreds of thousands by 2024. There’s a lot of new Electric Cars coming, but that’s just almost staggering to consider.
However, it’s a target, and targets are what gets industry moving. So let’s for a moment just embrace this target and plan.
One of the biggest concerns expressed in the last 24 hours – rightly – is the large amount of revenue that the Federal Governemnt receive through Petrol and Diesel excises.
Today, the Government reaps a staggering $17 BILLION dollars a year from us paying taxes when we buy petrol! By 2030 with the projected growth in that revenue that has been anticipated over the years, that will grow to $27 BILLION (Should we not switch to Electric).
Now firstly, that doesn’t just split in half, we’re talking about 50% of NEW Vehicle sales, in 2030, when we reach 50%, the percentage of Electric cars on the road in Australia would be less than 15%.
What the Government of the day needs to work it is how to they fund the short-fall. It’s around $1000-$1500 per year per car and goes up every year.
Initially, it’s obvious that a subsidy for that would encourage the use of Electric Cars, in the future, the cost savings on petrol would allow owners to pay perhaps a registration fee that would essentially be a road-user tax to supplement the reduction in fuel excise.
The real issue here is what’s a realistic target – 50% is almost clearly not possible, unless Electric Cars drop in price by some significant amount, we’re a long way off them being an affordable alternative to the bulk of car purchases.