From the CEO: Initial subsidies are necessary to kickstart decarbonisation journey

electric vehicle natroad ev subsidies decarbonisation

Read time: 3 mins

A leading Australian motoring website recently published a list of the 10 longest range electric vehicles (EVs) on or about to enter the local market. Nobody will be surprised to hear that none of them was a truck. 

The best performing sedan was the Polestar 2 Long Range Single Motor with a range of 654 kilometres on a full charge. 

If you’re in the market, the price for this Swedish-designed, Chinese-made rear wheel drive is a cool $A86,900 before on-road costs, so be prepared to pay.  

EV driving range is mainly dictated by the usable (net) battery size, vehicle aerodynamic design, total weight, and the electric drive unit’s efficiency. 

EVs typically use what are called World Harmonised Light Vehicle Test figures to quote their range. These don’t reflect real-world driving range because they come from controlled laboratory tests that don’t account for weather, vehicle braking or road surfaces. 

You can probably knock 20 percent off those numbers. 

Apart from limited range and a shortage of charging stations, the big conundrum for alternative fuels and heavy vehicles is the large size of batteries and the resultant trade-off in payload. 

There’s still a long way to go to make EVs or hydrogen commercially viable as a fuel but developers and manufacturers are pulling out all stops to get us there. 

Provided solutions can be found for the other issues, range may not be the bogeyman we think it is. 

According to the Australian Bureau of Statistics, the average travel per day of an articulated truck on all roads is 232.1 kilometres. In capital cities, it is 103.6km.  

Long haul is a vital part of the freight story in Australia but it’s also a relatively small segment of the heavy vehicle industry.   

According to the International Energy Agency, nearly 66 000 electric buses and 60 000 medium- and heavy-duty trucks were sold worldwide in 2022, representing about 4.5 percent of all bus sales and 1.2 percent of truck sales. 

Despite being a country still building fossil fuel energy plants, China continues to dominate production and sales of electric (and fuel cell) trucks, pushing out an estimated 52 000 electric medium- and heavy-duty trucks domestically.  

It has done so from a low base and off the back of billions of dollars of subsidies in the early 2000s. 

Those subsidies have been pared back, yet sales of electric trucks continue to climb.  

Industry observers describe this as “a promising sign that they have reached cost and performance metrics that make them increasingly competitive without government support…cost reductions are also being driven by market consolidation and economies of scale.” 

There are some important lessons here for our governments and Australian operators. 

Firstly, some sort of subsidy or tax break is an important early step in creating a local market. 

Good on the Federal Government for recently relaxing truck width limits so overseas manufacturers can access our market.  

It is one important step in the journey. 

The purchase of a new truck is the single-biggest outlay a heavy vehicle operator will make. 

It’s very much an investment upon which a business needs to make a return. 

All the long-term savings to the economy that decarbonisation will bring have to have a cost.  

That cost can’t be borne entirely by small businesses and owner-drivers who are scratching to make a living. 

The other message here is that subsidies don’t have to be forever. 

They’re a vital incentive for truck buyers to make the plunge and if phased correctly, can give certainty where, at the moment, none exists.   

But they can also be pared back, provided you give people notice and don’t leave them bearing all the risk.  

That’s food for thought as we approach 2024.