Management consultancy Partners in Performance (PIP) says moving light commercial fleets to electric vehicles (EVs) is crucial to the Labor government’s National Electric Vehicle Strategy (NEVS).
Apart from pledging that its fleet purchases and leases will be 75% electric by 2025, PIP says two factors stand out from Labor’s announcement – the Fringe Benefits Tax (FBT) and salary sacrifice.
There will now be $345 million allocated to the Electric Vehicle Discount, exempting eligible EVs from the FBT and the 5% import tariff. This translates to savings of $9,000 a year on a $50,000 EV for an employer, or savings of $4,700 for an individual on a salary sacrifice arrangement.
PIP asks if the Aussie ute, deemed a tax write-off, be replaced with its cleaner and greener EV counterpart.
“A burgeoning economic case with the change to the FBT rules and incoming of utes in a few years, is to look at the total cost of ownership,” PIP partner Brian Innes says.
“This is for both corporate fleets and salary sacrificing programs, to engage and rapidly increase the uptake of EVs.
“The critical point lies in corporations understanding and managing EV charging infrastructure and home to work charging with EVs. Furthermore, corporations will have to get up to speed rapidly, by getting on board with EVs in ways that suit their respective business offerings. They need to be ready to incorporate charging in a way that is feasible to their duties, and wholly understand their role in transitioning to EVs,” he says.
Australia’s transport sector alone is the fourth biggest contributor to the nation’s overall carbon emissions. EVs powered by green energy, stand to reduce Australia’s carbon emissions by 6 to 7%.
Australian industries expected to ‘drive’ the first batches of mass EV uptake include food logistics companies, delivery-type businesses, and mobile service providers such as mobile bankers.
Many automotive manufacturers have committed to increasing the number of EV options within their fleet for the freight and logistics industries. IDTechEx forecasts the penetration of electric trucks into the global medium and heavy-duty market to be 9% by 2030. However, several barriers to entry for the trucking industry must be considered to increase the uptake of electric trucks. Apart from increasing model availability, the lack of, and cost of charging infrastructure must be addressed.
The Federal Government’s announcement of the $500 million ‘Driving the Nation’ fund, which includes improving charging infrastructure along 117 highway sites and hydrogen highways for key freight routes, is a move in the right direction according to PIP.
Labor plans to deliver 16 hydrogen refuelling stations on Australia’s busiest freight routes. Charging infrastructure concerns of both individuals, and the transport and logistics industry, will be addressed with charging stations at an average interval of 150 kilometres on major roads. These stations will also be interoperable with all EV models and all other charging networks.
“EVs can alleviate the pressure on the grid, as they gain popularity. Corporations can enhance EV uptake by having them charged while they are parked, in the hours between 10am to 3pm at work,” Innes says.
“Doing this will mean the excess solar energy from the grid can be stored in EVs, ensuring stability in the system while reducing infrastructure spend. The key to successfully transitioning to EV fleets is harnessing available resources and utilising it to capacity.”
Additionally, $20 billion has been allocated to upgrading the electricity grid. This includes investing in the Marinus Link to connect Tasmania’s Battery of the Nation pumped hydro and renewables to the East Coast transmission network.
As the number of EVs increase, and act as ‘mobile sponges’, Innes questions whether it makes sense to invest $20 billion in the immobile grid?
PIP says Western Australia has come a long way in its adoption of renewable energy: 82% in an isolated gigawatt (GW) scale grid- presumably, the highest for a GW grid globally. This is a commendable achievement by the state, as there were no government incentives or regulations that drove it. Rather ‘people power’ was the driving force, with 65% of this energy harnessed from solar panels on the rooftops of Western Australian homes.
“Riding on Western Australia’s huge success in its renewable energy journey, we need to mirror this ‘people power’ effect to storage and EVs,” Innes says.
“It is not just about government incentives, but the motivation to do it because people are informed and want to. Additionally, a positive ‘side effect’ as the electricity grid gets greener and as we start using EVs to soak up the excess solar energy generated from our rooftops, is the significant reduction of greenhouse gases. This aligns with Australia’s goal in reducing emissions.
“However, ultimately, changing mindsets holds the key to successfully transitioning to renewable energy sources and embracing more sustainable technology such as EVs,” he says.
PIP says it works with corporations to facilitate their transformation towards sustainable practices and decarbonisation goals through implementable solutions.
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