Electric vehicle sales accelerate, but not fast enough

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Electric vehicle sales in Australia are accelerating as drivers get behind the wheel of zero or low emission models, but they are not being adopted quickly enough for the carbon-intensive transport sector to meet NSW, Victoria and Queensland’s 2030 targets of EVs being half of all new car sales.

Sales of EVs doubled from June last year when the auto industry was struggling with pandemic-related supply chain issues. Battery electric, hybrid or plug-in hybrid model vehicles accounted for 16.6 per cent of new car sales in June this year across the country, according to Federal Chamber of Automotive Industries data.

Hummer electric vehicles on the production line in Detroit, United States.Credit: Bloomberg

June, being the end of the financial year, is typically a high selling month and car sales didn’t disappoint dealers. They hit a fresh peak with 124,926 vehicles driving off the showroom floor – the highest monthly figure since June 2018.

But the country’s light vehicle sales are still dominated by sport utility vehicles and pick-up trucks with high fuel consumption. Battery electric vehicles made up 8.8 per cent of last month’s sales and 7.4 per cent of all new vehicle sales in the first half of this year.

Sales of EV maker Tesla’s Model Y reached 5560, making it the second-highest selling vehicle in June. The highest selling vehicle was the Toyota HiLux ute, which sold 6142 units.

“Sales of EVs are ramping up,” a director at the Federal Chamber of Automotive Industries, Peter Griffin, said.

One of the main impediments to higher EV sales is the lack of low emission models in the light commercial and sports utility sector, he said. In Australia, 78 per cent of vehicles sold are utes or SUVs.

“EVs aren’t available in every market segment or at prices that people can afford. That’s a worldwide not just an Australian issue,” Griffin said.

Citibank analysts said shipping congestion is slowing car imports. “The Melbourne port is entering its second consecutive month of ‘congestion’, with 10 vessels currently in the waters waiting to berth,” they said.

Chinese EV maker BYD is making inroads into Australia. BYD, distributed by ASX-listed Eagers Automotive, has about 12 outlets selling the brand and has cornered about 13 per cent of EV sales.

An unveiling event for the BYD Denza N7 electric SUV in Beijing, China on July 3. BYD is China’s biggest-selling car brand.Credit: Bloomberg

The brand is building momentum after last month launching the Dolphin – Australia’s cheapest EV with a starting price of $38,890 – and another model, the Seal, likely to be released in August, analysts said.

‘EVs aren’t available in every market segment or at prices that people can afford. That’s a worldwide not just an Australian issue,’

Despite EV sales rising in June, Australia is falling behind the rest of the world in its adoption of electric vehicles. The International Energy Agency estimates only 3.8 per cent of new vehicle sales were electric last year, compared with 8 per cent in the US, 23 per cent in UK and 25 per cent in Europe.

The Albanese government said in April it would apply mandatory pollution caps to new cars for the first time as part of its National Electric Vehicle strategy in a bid to push drivers towards cleaner cars, although it hasn’t yet set the standards or the timing for their introduction.

EV sales in Australia could reach 35 per cent by 2030, but they won’t hit 50 per cent of sales without further government intervention, BloombergNEF analyst Leonard Quong said.

“Automotive manufacturers simply aren’t prioritising sending vehicles to the Australian market because we lack any policy that looks, feels and behaves like a fuel efficiency standard,” Quong said.

Jake Whitehead from the Electric Vehicle Council, an industry group for electric vehicle manufacturers, retailers, importers and charging station suppliers, said a target of 50 per cent of sales by 2030 was the “bare minimum”.

“We should be aiming to ensure that transport emissions start to fall by 2030 in line with supporting our national emission reduction targets and to provide more Australian households and businesses with the opportunity to slash their fuel bills by making the switch to an EV,” Whitehead said.

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