Australia intends to enact new regulations that will target carbon emissions from vehicles to increase the adoption of electric vehicles (EVs) as the country attempts to catch up with other developed economies. The government will release a discussion paper on the National Electric Vehicle Strategy in September 2022 with focus on increasing EV adoption, enhancing affordability, and exploring possibilities for fuel-efficiency regulations. According to the Department of Industry, Science and Resources, the transport sector accounted for 17.5% of the carbon emissions in Australia in 2021.
EV Market in Australia
According to GlobalData, the market value of the Australian hybrid and electric vehicles grew 24% in 2021 in comparison to that in 2020. Electric cars are the largest segment in the Australian hybrid and electric vehicle market in 2021, with 6,000 units, equivalent to 55.4% of the market. In comparison, the number of hybrid vehicles amounted to 4,839 units in 2021, accounting for 44.6% of the market.
Australia Lags Behind in EV Adoption
Australia lags behind most countries in terms of adoption of EVs. Besides Russia, Australia is the only OECD country that either lacks or is in the process of creating fuel efficiency standards. According to Climate Change and Energy Minister Chris Bowen, only 2% of cars sold in Australia are electric in comparison to 15% in Britain and 17% in Europe. The absence of adequate policies and regulations to support the industry provides automakers little incentives to produce more electric and zero-emission vehicles in Australia. Consequently, automakers focus on markets that require compliance with rigorous emissions regulations.
Outlook
The Australian government announced tax incentives for EVs and increased its carbon emission reduction target by 43% from 2005 levels by 2030. Canberra, the Australian Capital Territory, declared that sales of vehicles and light trucks with internal combustion engines will be prohibited by 2035. The growth of the EV market is set to accelerate as the adoption of hybrid and electric cars will continue to increase, aided by increasing affordability and a greater number of offerings, also facilitated by government incentives, and expanding infrastructure.
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