Continuing its ongoing commitment to reducing carbon emissions, the Labour government of South Australia has proposed electric vehicle incentives for consumers. The proposal would create the first government electric vehicle incentives in Australia. While the announcement drew praise from many industry leaders and consumers, others are not convinced. Labour promises that the changes will take place if the party wins the March 2018 elections.
Many factors come into play when a government announces new proposals. In this case, car manufacturers and consumers are two important groups that sometimes have opposing views. Readers and commenters on automotive websites offer their own compelling ideas. With upcoming state elections, voters with other priorities – such as school funding – could influence the outcome and even derail the incentives.
If Labour wins the South Australian election and the incentives take effect, the impact would be felt in three ways:
- Consumer choices
What Are the Incentives?
The Labour government hopes to convince Australian drivers to buy zero-emission electric vehicles. If the incentives are enacted, consumers who buy electric vehicles or zero-emission vehicles would not have to pay a stamp duty and could register their car for free for five years. For example, a consumer who buys a $40,000 electric vehicle could save $2155 in stamp and registration fees over five years. A purchaser of an $80,000 electric vehicle could save $3755. The Compulsory Third Party insurance premium, the Lifetime Support Scheme Levy and administration fees would still be required for electric vehicle buyers.
One of the leading causes of climate change is the burning of oil and other fossil fuels, according to the Australian Department of the Environment and Energy. The South Australian Minister for Sustainability, Environment, Conservation and Climate Change, Ian Hunter, announced the proposed electric vehicle incentives on February 23, 2018. He described the measures as part of Labour’s commitment to the state’s “clean and green” reputation.
Labour is presenting the incentives as a step toward reducing carbon fuel emissions from the state’s transport sector. In the city of Adelaide, for example, cars contribute 90 per cent of the city’s transport emissions, which make up 35 per cent of Adelaide’s carbon emissions. Hunter stated that the proposed incentives would be the latest step toward making Adelaide the world’s first carbon-neutral city. Previous decarbonising measures in the city include investments in a Tesla battery storage facility, and in recharging centers throughout the Adelaide area.
Labour has already committed South Australia to a 75 per cent renewable energy target and a 25 per cent renewable storage target by 2025. Minister Hunter stated that the incentives to drive carbon-free cars will ensure South Australia’s role as “a world leader when it comes to taking strong steps to combat climate change and its impacts.” Noting that electric vehicles are already a sound environmental choice, Hunter said that the proposed incentives would also make electric vehicles a wise economic choice.
Many in the general public have applauded the Labour announcement. One commenter on Drive.com praised the government for “thinking outside the box” and for “investing in the future.”
Automotive industry leaders have praised the incentives. The CEO of the Electric Vehicle Council, Beyhad Jafari, stated that Labour’s announcement represents South Australia’s leadership in attracting investment and creating jobs. He described electric vehicles as the “future of the transport industry,” and added that consumers will see an immediate benefit from less expensive commutes to work and school.
The CEO of South Australia’s own Mitsubishi, Jon Signorello, hailed the incentive plan as a sign of the state government’s leadership in “developing a sustainable future transport industry.”
In addition to the proposed incentives, Labour will continue to press the federal government for tariff relief for electric and hydrogen-powered vehicles. The resulting lower prices, the Labour government hopes, will convince more drivers to switch to carbon-free cars.
Critics of the Incentives
The chief executive of the Federal Chamber of Automotive Industries, Tony Weber, is one industry critic of the proposed incentives. Noting that electric vehicles are part of a broad range of low-emission or zero-emission cars, he said that the government should not promote one type of vehicle over others. Weber prefers consumer choice in a market that includes hybrids, low-emission combustion, and hydrogen-powered cars.
Some people are not convinced that all South Australians will enjoy the economic benefit of the electric vehicle incentive package. One commenter on Motoring.com stated that the incentives would only benefit drivers who can afford the $40,000 price tag on the least expensive electric vehicle. The waived stamp duty and free registration would not benefit a consumer who can only afford a $20,000 car, and would not persuade that driver to choose an electric vehicle.
Some readers who criticised the incentive plan still generally supported zero-emission technology. A commenter on Drive.com suggested that a “cap on the subsidy” would encourage the introduction of electric vehicles that more drivers could afford. Another reader echoed the criticism from Tony Weber, wondering why the Labour government was not providing incentives for hybrid cars.
Commenters also worried about the effect on consumers in other states. Would sellers increase electric vehicle prices in other states, with the justification that the registration fee was included in the price? Would the higher prices result in fewer drivers switching to electric cars? If these comments represent consumer opinion, a lower price may be a good incentive.
Whether or not you worry about climate change, the proposed incentives are an important issue for South Australians. If Labour wins the election and follows through with its promise, the state government will continue its leadership role in combating climate change. More car buyers will likely switch to electric vehicles. More electric vehicles would mean lower carbon emissions.
Although some industry leaders oppose the focus on one type of zero-emission car, the announced incentives have put carbon-free technology in the spotlight. Lobbying continues for removal of tariffs on low-emission cars. Australia’s first government-backed electric vehicle incentives could have a broader impact than it seems at first glance.