Australia can become a global automotive manufacturing powerhouse once again by pivoting to electric vehicles, but immediate action is needed from the government, according to a new report.
Published by the Australia Institute’s Carmichael Centre on Tuesday, the report on rebuilding domestic vehicle manufacturing found that Australia had a natural advantage to become a hub for electric vehicles (EVs) thanks to its large reserves of minerals critical to electrification and high quality automotive supply chains.
Dr Mark Dean, the lead author of the report, said Australia has an existing base for strong EV manufacturing, but government action is needed.
“When it comes to creating an EV manufacturing sector, Australia enjoys advantages other nations would die for: rich reserves of lithium and rare earths, strong industrial infrastructure, a highly skilled workforce, powerful training capacity, abundant renewable energy options, and untapped consumer potential,” Dr Dean said.
“And contrary to popular belief, we wouldn’t be starting from scratch. Thanks to the resilience of our remaining automotive manufacturing supply chain, a surprising amount of auto manufacturing work – including components, specialty vehicles, and engineering – still exists here.”
Between 2020 2021, Australian exports of lithium, copper and nickel commodities totalled more than $15 billion.
Further, although Australian mass production of cars ended in 2017, the report argues that the automotive manufacturing industry still contributes significantly to the economy. In the period between 2019-20 the industry added almost $4 billion of value and employs more than the natural gas industry.
According to the report, these existing supply chains, when integrated with EV manufacturing and the renewable technology industry, could serve as a platform to diversify, and lead a sustainable transformation of the Australian economy.
Leading the list of recommendations made by the report is a proposal to establish an EV manufacturing industry commission. The board should be chaired by an EV industry expert and should include government, unions, business, and members of the community, it said.
Another key recommendation is to implement greater incentives for the uptake of EV, for the extraction of critical minerals, and to develop manufacturing capability. The report calls on the government to coordinate state-level EV policy, which it described as “ad-hoc”.
According to a 2019 survey by The Australia Institute, three in five Australians would support a national program to an electric transport system. And at the end of last year the Australia Institute’s annual Climate of the Nation report found that more than two-thirds of Australians think the federal government should do more to domestic increase EV uptake.
Other recommendations from the report include the use of tax incentives to encourage the extraction of key minerals used in electrification, new incentives for consumers and a long-term strategy for vocational training.
Last month the Electric Vehicle Council released sales figures for EVs in Australia, finding that the country is on the “precipice” of a boom for the industry.
Late last year the federal government launched its Future Fuels and Vehicles Strategy, with $178 million in new funding for EV charging stations and infrastructure, but no new subsidies, mandates or targets.
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