Electric vehicles are becoming increasingly popular among Australians

Electric vehicles are becoming increasingly popular among Australians, with sales during the first half of 2023 already eclipsing last year’s annual total, though the industry has warned a federal policy vacuum continues to harm consumer choice.

The Electric Vehicle Council has also singled out the Victorian government as having “the world’s worst” approach to taxing EV ownership in its report on the state of the industry to be released on Monday.

From January to June this year, 8.4% of new car sales in Australia were electric. In 2022, just 3.8% of new vehicle sales were electric.

The 46,624 EVs sold in the first six months of the year take the number of EVs on Australian roads to roughly 130,000 – made up of about 109,000 battery powered cars and 21,000 hybrids – according to estimates from the Electric Vehicle Council.

However, uptake has varied considerably between regions. EV sales have been strongest in the Australian Capital Territory, where 21.8% of new cars sold so far this year were electric, followed by 9% in New South Wales and Tasmania, 8.5% in Victoria, 7.7% in Queensland, 7.5% in Western Australia, 6.5% in South Australia and 2.4% in the Northern Territory.

Market share is also heavily limited. Just three vehicles – Tesla’s Model Y and Model 3, and the BYD Atto 3 – account for more than 68% of the market in Australia. While there are 91 different electric cars, vans and utes on the market in Australia, most have very limited supply.

Every new electric car often sells out within hours of coming on to the market, Behyad Jafari, the Electric Vehicle Council’s chief executive, said.

He estimated demand for EVs was double the actual sales figures, but consumers frequently placed orders that went unfulfilled and ultimately opted for a standard car instead due to the wait.

Jafari said the lack of supply of EVs was a direct result of Australia’s lack of a new fuel-efficiency standard.

Fuel-efficiency standards set by governments limit emissions from cars by creating a cap of carbon emissions across a manufacturer’s overall sales. This provides an incentive for manufacturers to supply low and zero-emissions vehicles and penalises companies that fail to do so.

The Albanese government has promised, but not yet introduced, a fuel efficiency standard.

As more right-hand drive countries, such as Thailand, introduce a standard, manufacturers are diverting more EVs away from the Australian market so as to not miss out on incentives, Jafari said.

“Carmakers are essentially rewarded for sending their EVs to markets other than Australia. So [it’s] small wonder we remain at the back of the queue,” Jafari said.

As a result, Jafari said supply of cheaper EVs is particularly dire.

“If you want to buy a Tesla, fantastic, there’s more of them available here and Australians are buying them hand over fist, and that’s partly because they have higher margins on sales. It’s the more affordable options that, without incentives from a fuel-efficiency standard, manufacturers aren’t sending here.”

He gave the example of cheaper Hyundai EV models, noting that 30,000 orders were placed last year, but only 700 were sent to Australia by the manufacturer.

The Electric Vehicle council also rated each state and territory’s various policies towards EVs, including taxes, industry assistance and initiatives to help uptake across cars, trucks and buses. NSW and the ACT received the top ratings of 9/10, while the Northern Territory and Tasmania were rated lowest at 4/10.

However the council savaged the Victorian government’s recent policy changes that it said were disincentivising the uptake of EVs.

A controversial road user tax introduced in 2021 that makes electric vehicle drivers record and pay for every kilometre they travel – up to 2.8 cents this financial year – has been blamed for discouraging Victorians from embracing EVs. Motorists launched a legal challenge against the tax, which is being considered by the high court.

In its May budget, the Andrews government abruptly announced it would end its $3,000 rebate on new electric vehicles under $68,740 by the end of June – almost a year earlier than planned.

“Ultimately this approach, in addition to already having the world’s worst EV policy with respect to taxing EVs, risks jeopardising Victoria’s ability to achieve its own emission reduction targets,” the Electric Vehicle Council’s report said.

A Victorian government spokesperson said: “The zero and low-emission vehicle distance-based charge ensures all road users pay their fair share towards the cost of maintaining the road network.

“We’ve laid the groundwork to achieve our target of 50% of all light vehicle sales being ZEVs by 2030.”