Submission to the Senate Inquiry into Electric Vehicles

Department of Industry, Innovation and Science submission August 2018

Document title goes here industry.gov.au 1

Contents

Contents ...... 2

About the department...... 3

Executive summary ...... 3

Introduction ...... 4

Electric vehicle manufacture and opportunities for Australian businesses ...... 4

Australia’s automotive supply chain manufacturers ...... 5

GM , and research into electric vehicles ...... 8

Measures to support electric vehicle manufacturing and supply/value chain activities...... 11

Existing assistance measures and their scope ...... 11

Collaboration with state governments and other stakeholders ...... 16

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About the department

The Department of Industry, Innovation and Science (the department) facilitates the growth and productivity of globally competitive industries. It also supports the building of a strong scientific capability, business innovation and the commercialisation of new ideas as critical requirements for productivity and economic growth.

The department works closely with industry, businesses, the science and resources communities, Innovation and Science Australia, Australia’s Chief Scientist and other stakeholders to help build a globally confident and outward looking Australian economy through supporting science and commercialisation; growing business investment and improving business capability; and simplifying doing business. The department also works across governments to open up resources and other export markets, and support economic development in northern Australia. Executive summary

There are opportunities for competitive Australian businesses in producing automotive components and services in the supply chains of the global automotive manufacturers. Some Australian businesses already supply these markets with highly innovative systems and components. These include batteries, fast charging systems, battery cooling technologies, lightweight high performance materials such as carbon fibre, and vehicle body components using lightweight materials. More Australian businesses could supply these emerging markets by drawing on our excellent R&D capabilities.

The Australian Government has a range of programs that build business capabilities in many aspects of Australian manufacturing and services. These programs can help businesses to participate in the global supply chains of multinational car makers manufacturing EVs. The programs include the: $100 million Advanced Manufacturing Fund; Automotive Transformation Scheme; Entrepreneurs’ Programme; Industry Growth Centres Initiative; Cooperative Research Centres (CRC) program; R&D Tax Incentive; and CSIRO.

The department is experienced in working with other Commonwealth portfolios and agencies, state governments and industry for the benefit of industry. For example, the Commonwealth Department of Jobs and Small Business, Department of Employment, and Department of Education and Training and the Department of Industry, Innovation and Science collaborated with the South Australian and Victorian state governments, Holden and Toyota in developing and delivering the Government’s $155 million Growth Fund. The Fund supported automotive workers in their transition to other careers and supply chain businesses to diversity and invest in new activities.

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Introduction

The department welcomes the opportunity to provide a submission to the Senate Select Committee on Electric Vehicles (the Committee) Inquiry into the use and manufacture of EVs in Australia.

The department notes the Committee has the following terms of reference:

a. the potential economic, environmental and social benefits of widespread electric vehicle uptake in Australia; b. opportunities for electric vehicle manufacturing and electric vehicle supply and value chain services in Australia, and related economic benefits; c. measures to support the acceleration of electric vehicle uptake; d. measures to attract electric vehicle manufacturing and electric vehicle supply and value chain manufacturing to Australia; e. how federal, state and territory Governments could work together to support electric vehicle uptake and manufacturing, supply, and value chain activities; and f. any other related matters.

The department’s submission will address terms b, d (where appropriate) and e. Electric vehicle manufacture and opportunities for Australian businesses

Australian component manufacturers are well placed to supply innovative systems and components to the global supply chains of EV manufacturers. Their capabilities make them readily able to manufacture components for all types of vehicles, whether passenger vehicles, buses, trucks or off-road vehicles.

Major global car manufactures are refocusing their production around EVs. These include: Ford, Toyota, GM, VW, Fiat-Chrysler, PSA, Renault-Nissan, Mahindra, Honda, Hyundai-Kia and Mazda producing vehicles priced within reach of most people. Manufacturers of prestige vehicles are BMW, Mercedes-Benz, Tesla and Geely-Volvo.

This move to EV production is underpinned by extensive R&D, advanced design and engineering programs and facilities to supply the market with vehicles that have appeal, function and performance at a competitive price.

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As an example, suppliers to the production of an EV are shown in the figure below1.

Australia’s automotive supply chain manufacturers

Australian car component manufacturers are already exploiting opportunities with their recognised expertise in, for example, batteries, fast charging systems, battery cooling technologies, lightweight high performance materials such as carbon fibre, and vehicle body components using lightweight materials.

Some examples of Australian car component manufacturers are:

 Nissan Casting Australia Pty Ltd, in Victoria, produces components for the power train of the Nissan Leaf EV and also the water jacket, inverter case and stator housing for the Note and Serena e-Power hybrid models sold in the Japanese market. Its strategic relationship with the Renault-Nissan-Mitsubishi Alliance, provides it with competitive access to the group’s global supply chain. The automated Dandenong plant employs 192 highly skilled workers. It runs three shifts a day, seven days a week, making 2.6 million die-cast aluminium parts and over 16,000 tow bars with an export value of $83 million. Nissan Casting has committed over $11 million of investment to the plant recently which includes specific tooling and equipment for

1 Suppliers to the 2013 Tesla Model S, http://www.google.com.au/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwjMnJ_v1bncAhXHdN4KHbZABlkQjRx6BAgBEA U&url=http%3A%2F%2Fparsplus.co%2Ftesla-electric-car-diagram.html&psig=AOvVaw1ZppjMbsIVKaQgDvNiHayv&ust=1532588066310789

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new generation hybrid and EV components. The investment was supported by grants from the Commonwealth and Victorian governments.2  Carbon Revolution, located in Victoria, produces light weight, carbon fibre wheels. Its operations are currently based on low-volume, high price, to supply foreign high performance sports car markets.  Tritium, located in Brisbane, manufactures a light-weight, fast, high-powered 475 kW EVs charging system that is typically 50 to 75 per cent smaller than other systems on the market. The system can charge a typical EV in 5 minutes, providing a range of 150 kilometres. Tritium’s markets are in Europe and US. The initial order of 600 second-generation charging systems will be deployed at 100 sites across Europe. Tritium’s 50 kW chargers are already deployed in Europe. The NRMA is installing 40 of the 50 kW chargers across NSW. In 2012, Tritium received a $1.5 million in an Early Stage Commercialisation Grant from Commercialisation Australia, a Commonwealth Government entity. 3  Quickstep, located at Bankstown in NSW and Geelong in Victoria, manufactures advanced composite materials components for applications in aerospace, defence and automotive. The complex light-weight, high-performance components require state-of-the-art design and engineering capabilities together with process development. Quickstep has developed a low cost carbon fibre composite fender for the European automotive market.  Cohda Wireless, a software company in South Australia, has developed a V2X (that is vehicle-to-infrastructure and vehicle-to-vehicle) technology with 360 degree awareness. Cohda’s technology can detect hidden-from-view threats, so it can extend the horizon of awareness beyond what the driver can see. Cohda provides complete hardware/software solutions to car makers, smart cities and mine operators.  PWR, in Queensland, produces automotive cooling components used mainly by supercar motor vehicle producers including Ferrari, McLaren, Aston Martin, Lamborghini and Pagina. It also produces aftermarket cooling components for Toyota Hilux, Ford Ranger and VW Amarok. PWR is working with EV makers such as Tesla

2 “Australian parts vital for Nissan’s electrified future”, 16 Nov 2017, https://www.goauto.com.au/news/nissan/australian-parts- vital-for-nissan-rsquo-s-electrified-future/2017-11-16/67508.html; Nissan Casting Australia, 16 Nov 2017, https://www.goauto.com.au/news/nissan/australian-parts-vital-for-nissan-rsquo-s-electrified-future/2017-11-16/67508.html; ‘Australian manufacturing could flourish in EV future’, 16 Nov 2017, https://www.drive.com.au/motor-news/australian- manufacturing-could-flourish-in-ev-future-116354 3 AFR, “Huge upgrade on Tritium’s Euro order for electric car chargers”, 5 July 2018, https://www.afr.com/news/eightfold-upgrade-on-tritiums-euro-order-for- electric-car-chargers-20180705-h129qe; Industry Update, ‘Australian fast chargers power up European EV network, 5 July 2018, https://www.industryupdate.com.au/article/australian-fast-chargers-power-european-ev-network?utm_source=Newsletter&utm_campaign=3d5d8e8260- EMAIL_CAMPAIGN_2018_04_26_COPY_06&utm_medium=email&utm_term=0_c8741c7ef6-3d5d8e8260-307413149; Smartcompany, ‘Commercialisation Australia showers cash on Brisbane energy efficiency start-up, 30 July 2012, https://www.smartcompany.com.au/startupsmart/advice/startupsmart- growth/commercialisation-australia-showers-cash-on-brisbane-energy-efficiency-start-up/; ‘Australian car parts makers find a niche’, April 2017, https://www.racv.com.au/membership/member-benefits/royalauto/motoring/motoring-news/australian-car-parts-makers-find-a-niche.html

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to apply its cooling technologies to ensure the batteries of electric and hybrid vehicles do not overheat for safety, durability and to improve battery yield.4  Supashock5, in South Australia, produces suspension systems for racing vehicles, sports utility vehicles, 4-wheel drive vehicles, mining and military vehicles. It supplies GM with its high performance suspension systems. It has diversified into defence manufacturing, and in 2017 Rheinmetall Defence purchased a significant proportion of equity holding in the business. In 2018, Supashock announced the inclusion of its suspension and load handling system for Rheinmetall’s next generation combat vehicles. In 2018, Rheinmetall won a $5 billion contract to supply the Land 400 armoured combat reconnaissance vehicle contract6.  ANCA7, located in Victoria, is a market leader in high precision, computerised numerically controlled tool grinders and components. It exports the majority of products to its global clients such as Boeing, General Electric, Rolls-Royce, Caterpillar, Samsung, Daimler-Chrysler and Volvo. From its base in Detroit USA, ANCA services its customers in sales and aftermarket support.  Sutton Tools8, in Victoria, manufactures cutting tools for a wide range of industries including, general manufacturing, electronics manufacturing, automotive, medical, mining and power generation, aerospace, defence and oil/gas industries.

The manufacture of batteries is an emerging opportunity.

Century Yuasa is a battery manufacturer with manufacturing operations in Australia. It is part of a multinational company Japan Storage Battery and Yuasa Corporation that has developed a high-performance lithium-ion battery for use in EVs and hybrid vehicles. In Australia, it employs 650 people who perform the full spectrum of activities including research and development, manufacturing, sales and distribution which can be used to support opportunities in the EV market.9

Australia is one of the world’s largest lithium producers, with raw materials located in WA.10 Processing lithium into Li-ion batteries has begun in Australia, with QUT’s pilot facility to produce commercial grade Li-ion batteries. It can quickly prototype new battery formulation and cell types, and help manufacturers develop Li-ion batteries. The facility is the result of

4 Sydney Morning Herald, ‘Formula One car cooler PWR joins Tesla in keeping storage batteries colder’, 16 March 2016, https://www.smh.com.au/business/formula-one-car-cooler-pwr-joins-tesla-in-keeping-storage-batteries-colder-20160316-gnk2sc.html 5 Supashock, http://supashock.com/engineering/ 6 Brisbane Times, ‘Queensland wins $5 billion Defence contract’, 14 March 2018 https://www.brisbanetimes.com.au/national/queensland/queensland-wins- 5-billion-defence-contract-20180314-p4z48i.html 7 ANCA CNC Machines, http://www.anca.com/Home 8 Sutton Tools, http://www.suttontools.com/ 9 Century Yuasa, https://www.cyb.com.au/about-us ; GS-Yuasa, annual report, 2017, https://www.gs-yuasa.com/en/ir/pdf/GS_Yuasa_Report_2017.pdf 10 U.S Department of the Interior, U.S Geological Survey, Mineral Commodity Summaries 2018, pp. 98-99, https://minerals.usgs.gov/minerals/pubs/mcs/2018/mcs2018.pdf

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three year $4 million project funded by the Automotive Cooperative Research Centre and conducted in conjunction with the Malaysian Automotive Institute11.

In 2017, Energy Renaissance announced it would be opening the ‘Renaissance One’ facility in Darwin with Northern Territory Government support. In late 2018, the facility will open its one-Gigawatt hour (1GWh or 1 billion watt hours) facility to manufacture, sell and support high-performance Li-ion batteries.12 GWh represents the factory’s manufacturing output capability.

Tianqi Lithium is constructing a $700 million plant in Kwinana due to be in production in April 2019, with production of battery-grade lithium hydroxide expected at 48,000 tonnes per annum.

Albemarle’s lithium hydroxide processing plant at Kemerton (near Bunbury) received Western Australian Environmental Protection Authority conditional approval in June 2018. The plant is expected to produce 100,000 tonnes per annum of lithium hydroxide. GM Holden, Toyota Australia and Ford Australia research into electric vehicles

Ford, Toyota and GM, like the other global car makers, each have major global programs focused on future mobility technology solutions, including EVs, for their global platforms. These three companies each maintain substantial R&D, advanced engineering and design facilities in Australia supporting their global operations.

Ford

Ford is moving to change its model production, shifting away from producing sedan and internal combustion engine vehicles to develop more trucks and electric and hybrid cars. It also established a team to accelerate global development of EVs.13

Ford’s global R&D spending for 2017 was US$7.3 billion, up from US$6.7 billion in 2016.14 Earlier in 2018, Ford announced it will increase significantly its planned investment in EVs from US$4.5 billion to US$11 billion by 2022 and have 40 electrified models, 16 electric battery only, in its fleet composition. The first announced EV to be released in 2020 is the Mach 1, a performance battery-electric SUV.15

11 QUT creates Australia’s first lithium-ion battery 20 September 2017 - https://www.qut.edu.au/news?news-id=122956 12 http://www.energyrenaissance.com.au/about-us-en/ 13 https://www.theguardian.com/environment/2018/jan/15/ford-to-invest-11bn-and-have-40-hybrid-and-fully-electric-vehicles-by-2022 14 http://www.thedrive.com/sheetmetal/15801/six-car-makers-make-the-list-of-top-20-rd-spenders 15 https://www.bloomberg.com/news/articles/2018-01-14/ford-doubling-electric-vehicle-spending-to-11-billion-by-2022

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Ford currently makes one fully electric vehicle, in its Focus range. It has a wider EV program in China through Ford’s joint venture with Chinese automaker Anhui Zotye Automobile, specifically to build EVs and a ‘strategic collaboration’ with Alibaba to build new online and digital sales channels.16

In Australia, Ford has a product development centre at Broadmeadows in , an R&D centre at Geelong and Proving Ground at Lara. With these facilities, Ford will continue to design, engineer and test vehicles its vehicles for global markets. In 2016, Ford transformed its Melbourne head office into a new product development centre as part of a AU$50 million investment to enhance vehicle engineering capability and drive innovation in Australia. In addition, Ford was increasing Australian R&D investment by 50 per cent to $450 million in 2017 to support increased vehicle development programs. By the end of 2017, Ford’s investment supported 2,000 jobs in Australia, including 1,750 engineers, designers and technicians.17

The centre continues to be enlisted for major projects in the Asia-Pacific region, including R&D for Chinese Ford models. 18 The centre developed the new-generation Ranger ute – to be built and sold in the US for the first time in 2019 – and the reborn Bronco SUV that shares the Ranger’s platform. It is scheduled to arrive a year later.19

Toyota

Toyota’s global R&D program has a number of R&D centres in the USA, Japan, Belgium, Germany, France, China, Thailand and Australia. It is predicted to spend US$9.4 billion on global R&D, up from US$9.3 billion in 2017.20

In Australia, Toyota’s R&D operations in Victoria include: product design with clay modelling; vehicle evaluation; multimedia development; and customer quality engineering. They are supported by 150 engineering, design and technical training jobs.

Toyota has a diverse range of new energy vehicles and concept vehicles. These include increasing the energy density of the next-generation of batteries, the use of silicon carbide (instead of silicon) as a new material to improve fuel efficiency, and a wireless charging system. 21

Toyota recently released two new EV concepts, primarily for urban congested roads. They are the i-ROAD, an ultra-compact size 870 mm wide, and the iQ EV which takes up half a normal parking space and has a more compact battery.22

16 https://techcrunch.com/2018/01/15/ford-will-boost-electric-vehicle-spending-to-11b-and-offer-40-electrified-models-by-2022/ 17 https://www.ford.com.au/about-ford/newsroom/2016/ford-readies-product-development-centre-to-drive-innovation--exp/ 18 https://www.whichcar.com.au/news/industry/ford-asia-pacific-leaning-on-australian-development-centre 19 https://premium.goauto.com.au/ford-shakes-global-design-operations/ 20 https://www.toyota-global.com/pages/contents/investors/financial_result/2017/pdf/q4/presentation.pdf. Page 22 21 https://www.toyota-global.com/innovation/environmental_technology/keytech/ 22 https://www.toyota-global.com/innovation/environmental_technology/keytech/

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Toyota has a long history in R&D in fuel-cell technology, with it exploring hydrogen energy since 1992. In 2002, Toyota began the world's first limited sales of a fuel-cell vehicle, the ‘Toyota FCHV’, in Japan and the US. Toyota has also made use of its hybrid vehicle technology in the development of fuel-cell vehicles. Notably, Toyota has given free access to approximately 5,680 fuel-cell related patent licenses (as of January 6, 2015) to promote the widespread early adoption of fuel-cell vehicles and build a hydrogen-based society.23

Toyota released its mass market plug-in hybrid, the Prius, in January 2012 and updated the model in 2017, with longer driving distances in EV mode due to an improved Li-ion battery and motor. If the car is driven until the battery runs out, it can carry on operating in the minimal-CO2-emission hybrid mode. 24

In September 2017, Toyota and Mazda announced a deal with automotive components manufacturer Denso to establish a new company – EV Common Architecture Spirit Co., Ltd. – that will develop technologies for EVs. The company will have around 40 engineers from the three companies who are to create framework technologies for electrification. The technology will be implemented across a wide range of vehicle types, from smaller cars to light trucks, across the Toyota and Mazda brands. Toyota intends to open a US$1.6 billion US assembly plant for EV and hybrid vehicles.25

GM

GM has been working on fuel-cell and battery EVs for over two decades.26 Its R&D expenditure for 2017 was US$7.3 billion, up from US$6.7 billion in 201627 In 2017, it announced it would produce 20 battery EVs and fuel-cell vehicles by 2023. Three concepts announced are: a sporty crossover; a larger wagon or SUV; and a tall, boxy pod car that looks like a people-mover for cities.’ GM has also announced a fuel-cell-powered heavy-duty truck with two electric motors known as Surus, or ‘silent utility rover universal superstructure.28

In Australia, GM Holden’s engineering centre at its Port Melbourne and Proving Ground at Lang Lang adapt imported vehicles to Australian conditions. Engineering work includes: vehicle structures and dynamics; powertrains; and advanced vehicle development. These facilities are supported by up to 350 jobs.

GM has a handful of EVs including the 2010 plug in hybrid Chevrolet Volt, and the EV Chevrolet Bolt, which was available in the US in August 2017. The Bolt has been a

23 https://www.toyota-global.com/innovation/environmental_technology/fuelcell_vehicle/ 24 https://www.toyota-global.com/innovation/environmental_technology/plugin_hybrid/ 25 https://mashable.com/2017/09/28/toyota-mazda-senso-electric-vehicle-development/#qOlpW7.mBOqB 26 https://www.caradvice.com.au/588917/general-motors-launching-20-electric-vehicles-by-2023-holden-to-lead-australian- charge/ 27 http://www.thedrive.com/sheetmetal/15801/six-car-makers-make-the-list-of-top-20-rd-spenders 28 https://www.washingtonpost.com/news/innovations/wp/2017/10/02/death-of-diesel-begins-as-gm-announces-plans-for-all- electric-future/?utm_term=.ed6c9325805e

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successful EV for GM, with a 380 km battery range on a single charge and cost of US$37,500 before tax incentives. The range places the vehicle well above the Nissan Leaf with a range of up to 170 km on a single charge, and slightly above Tesla’s Model 3, up to 350 km on a single charge for a standard battery.29

GM’s Global Propulsion System centre has half of GM’s 8,600 designers and engineers involved with alternative and electric propulsion systems.30 1,700 engineers, designers and researchers are specifically working on batteries and EVs.31

GM’s research into batteries is particularly focused on decreasing the amount of cobalt in its new EMC 1.0 battery system (which is a costly component), increasing battery nickel to store and produce more energy efficient packaging of batteries in vehicles, and improved systems for managing energy flow and cooling the battery cells. Cost savings from these changes are expected to be more than 30 per cent, from US$145 per kilowatt-hour to less than US$100 by 2021.32 Measures to support electric vehicle manufacturing and supply/value chain activities Existing assistance measures and their scope

The Australian Government has a range of measures to assist Australian manufacturing businesses to take full advantage of the uptake of EVs here and globally. The measures include the: Advanced Manufacturing Fund; Growth Fund; Automotive Transformation Scheme; Entrepreneurs’ Programme; Industry Growth Centres Initiative; Cooperative Research Centres program; R&D Tax Incentive; and CSIRO. Other portfolios and agencies also provide assistance measures. For example, CEFC is supporting the purchase of EVs with Macquarie Leasing and the production of Lithium in Western Australia for battery production. CEFC and ARENA are investigating measures to accelerate the uptake of EVs and the requirements for EV charging infrastructure.33

29 https://www.washingtonpost.com/news/innovations/wp/2017/10/02/death-of-diesel-begins-as-gm-announces-plans-for-all- electric-future/?utm_term=.c1a6789b303d&noredirect=on 30 https://www.washingtonpost.com/news/innovations/wp/2017/10/02/death-of-diesel-begins-as-gm-announces-plans-for-all- electric-future/?utm_term=.c1a6789b303d&noredirect=on 31 https://www.reuters.com/article/us-gm-electric-insight/gm-races-to-build-a-formula-for-profitable-electric-cars- idUSKBN1EY0GG 32 https://www.reuters.com/article/us-gm-electric-insight/gm-races-to-build-a-formula-for-profitable-electric-cars-idUSKBN1EY0GG 33 CEFC ‘Australia set for surge in electric vehicles and infrastructure in just four years: new modelling’, 21 June 2018, https://www.cefc.com.au/media/files/australia-set-for-surge-in-electric-vehicles-and-infrastructure-in-just-four-years-new-modelling/; Renew Economy “CEFC

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The $100 million Advanced Manufacturing Fund consists of:

 $47.5 million for a new Advanced Manufacturing Growth Fund to help industry in South Australia and Victoria be more competitive through innovative processes and equipment.  $4 million for the Advanced Manufacturing Growth Centre to support small and pilot research projects in advanced manufacturing.  $20 million under the Cooperative Research Centre Projects initiative, committed over two years, for larger scale advanced manufacturing research projects.  $10 million to establish Innovation Labs in South Australia and Victoria to serve industry in a variety of roles including test centre facilities and business capability development.  $5 million to maintain engineering excellence by investing in student research and industry to continue the flow of highly trained engineers to the automotive design and engineering sector.  $13.5 million tariff concession on imported vehicle prototypes and components used by Australian motor vehicle design and engineering services that operate in a global network.

The $155 million Growth Fund

The Growth Fund was established in response to Holden and Toyota’s closure announcements. The Government worked closely with Toyota, Holden and the Victorian and South Australian governments. The Government contributed $101 million to the Growth Fund, Holden and Toyota $15 million each and Victoria and South Australia $12 million each.

Business elements of the Fund are the $20 million Automotive Diversification Programme and $90 million Next Generation Manufacturing Investment Programme have closed to new applications. However, the companies are progressively receiving their grants as they continue their investments.

The $15 million extension to the Structural Adjustment Programme is open for new applications until the end of 2019, and is delivering employment assistance services to all retrenched automotive workers to help them find new jobs. Job seekers are eligible for immediate access to jobactive employment services and extra funds to spend on licences, tickets, training and other costs to help them gain employment. Six job fairs were held in Geelong, Melbourne and Adelaide between July and September 2017 before the factory closures.

backs leasing model to boost Australia’s EV uptake”, 6 September 2017, https://reneweconomy.com.au/cefc-backs-leasing-model-to-boost-australias-ev- uptake-81480/; CEFC ‘CEFC commits $20 M to WA lithium project boosting supply chain for electric vehicles and energy storage’, 27 June 2017, https://www.cefc.com.au/media/files/cefc-commits-20m-to-wa-lithium-project-boosting-supply-chain-for-electric-vehicles-and-energy-storage/

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The $30 million Skills and Training Initiative is open until the end of 2018 to help automotive workers find new jobs. Funded by Holden and Toyota, this is primarily assisting their workers, however, Toyota specifically partitioned $3 million of their contribution for workers in its supply chain.

Both Holden and Toyota report that over 80 per cent of their workers have successfully transitioned – either gaining new jobs, studying or retiring. They continue to work with the remaining workers to transition them.

Automotive Transformation Scheme

The Automotive Transformation Scheme (ATS) encourages competitive investment, innovation and economic sustainability in the Australian automotive industry.

The ATS will remain in place until December 2020 to assist in the orderly transition of the industry. The ATS has a legislated cap for a particular purpose with expenditure based on eligible activity. Therefore, there is no ‘underspend’ that can be used for other purposes, should the legislated cap not be reached.

Continued access to the ATS for registrants that fail to meet the threshold production requirements can be sought through the ATS national interest provisions. Businesses seeking continued access to the scheme must demonstrate their continued automotive manufacturing activities, and the national benefits that accrue to them.

Businesses that have made a financial commitment to carry on business in Australia as a motor vehicle producer or supplier to the automotive industry, for the first time can also participate in the scheme. Businesses that do not satisfy certain registration requirements may seek the Minister’s permission to apply for registration on national interest grounds.34

Entrepreneurs Programme The Entrepreneurs Programme provides assistance for building business competitiveness and productivity. The programme offers support to businesses through four elements35:

 Accelerating Commercialisation - helps small and medium businesses, entrepreneurs and researchers to commercialise novel products, services and processes  Business Management - experienced Business Advisers and Facilitators review business operations, including business direction, strategy, growth opportunities and supply chain. They provide a report with strategies for business improvement and work with you to make them happen.

34 Department of Industry, Innovation and Science, ‘Automotive Transformation Scheme – Fact Sheet’, access through https://www.business.gov.au/assistance/automotive-transformation-scheme 35 Department of Industry, Innovation and Science, “Entrepreneurs’ Programme” https://www.business.gov.au/assistance/entrepreneurs-programme

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 Incubator Support - assists New and Existing Incubators to improve the prospects of Australian start-ups achieving commercial success in international markets, through helping them to develop their business capabilities.  Innovation Connections - experienced Innovation Facilitators work with your business to identify knowledge gaps that are preventing your business growth. The outcome is an Innovation Facilitation Report.

Industry Growth Centres Initiative

The Industry Growth Centres Initiative (the Initiative) is an industry-led approach driving innovation, productivity and competitiveness by focusing on areas of competitive strength and strategic priority. This will help Australia transition into smart, high value and export focused industries.

The Initiative enables national on key issues such as collaboration, commercialisation, international engagement, skills and regulation reform. It drives excellence, not dependence, and will create an economy that ensures Australia’s ongoing prosperity.

Growth Centres are working to lift the levels of collaboration between businesses, industry, research organisations and government in order to better capitalise on the excellent research and development undertaken and scientific knowledge generated in Australia.

A key activity of each Growth Centre is to set a long-term strategy for its sector in a Sector Competitiveness Plan (SCP). The SCP describes how to lift the capability of the sector, boost productivity and skills, create jobs, reduce red tape and engage with international opportunities.

Growth Centres are helping align industry and innovation policy and programmes, including CSIRO and Cooperative Research Centres, to contribute to improving the productivity, competitiveness and innovative capacity of their sectors.

Of the six Growth Centres, the Advanced Manufacturing Growth Centre (AMGC); and the Mining Equipment, Technology and Services Growth Centre (METS Ignited) are best placed to support EVs manufacturing and deployment.

AMGC and Quickstep are collaborating to develop advanced processes for producing lightweight, high performance carbon fibre panels for automotive applications36. Volgren with project participants CleanTeQ, Hess and Deakin University with funding from AMGC, are developing lightweight, high strength aluminium alloy for use in EVs37. Rotacaster with

36 AMGC ‘Quickstep secures AMGC grant for development of automotive carbon fibre front fender’, 20 February 2017, https://www.amgc.org.au/Story?Action=View&Story_id=16 37 AMGC ‘Validation and demonstration of a high-strength aluminium alloy, for future integration into manufacturing value chain of global bus manufacturers’, https://www.amgc.org.au/Story?Action=View&Story_id=52

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project participants and funding from AMGC is developing a ‘smart factory’ conveyor and digital control system for Tesla’s battery factory in Nevada USA38.

METS Ignited is collaborating with Energetique to build and supply underground mining markets here and overseas with battery EVs.39

Cooperative Research Centres Program

The Cooperative Research Centres Program supports industry-led collaborations between industry, researchers and the community. It’s a proven model for linking researchers with industry to focus on research and development towards use and commercialisation. 40

For example, the iMOVE Cooperative Research Centre (CRC) supports the development of a smarter Australian transport system for industries to increase productivity, reduce emissions and remain globally competitive. Its focus includes intelligent transport systems, autonomous vehicles and the flow-on economic and social benefits to Australia.

All levels of government have joined with industry and research organisations to participate in the iMOVE CRC.

The iMOVE CRC aligns with a number of Government priorities including the Policy Framework for Intelligent Transport Systems, Smart Cities Plan and the National Transport Technology Plan, as well as contributing to other science and research priorities.

Research and Development Tax Incentive

The Research and Development Tax Incentive is the Government’s key mechanism to stimulate Australian industry investment in R&D. It offers tax offsets for eligible R&D expenditure. 41

CSIRO

CSIRO, an Australian Government agency responsible for scientific research, has a variety of capabilities that can contribute to the commercialisation of research to support EV manufacturing and energy systems. For example, its research includes high performance batteries, supercapacitors and fuel-cells, some of which has been commercialised42. It has developed a metal membrane to separate hydrogen from ammonia in collaboration with

38 AMGC, https://www.amgc.org.au/Story?Action=View&Story_id=62 39 METS Ignited ‘Project Funds Round 2’, 3 July 2018, https://www.metsignited.org/Category?Action=View&Category_id=143 40 Department of Industry, Innovation and Science, ‘Cooperative Research Centres Program’, https://www.business.gov.au/assistance/cooperative-research-centres-programme 41 Department of Industry, Innovation and Science, ‘Research and development tax incentive’, 14 August 2018https://www.industry.gov.au/funding-and-incentives/business-and-startups/research-and-development-tax- incentive 42 CSIRO, ‘Energy storage and battery technologies’, https://www.csiro.au/en/Research/EF/Areas/Energy-storage

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BOC (part of the Linde Group). The technology has application in hydrogen fuel-cell vehicles being developed by Toyota and Hyundai.43

CSIRO is working with businesses, universities, ARENA and the Victorian Government on a range of projects from materials research; battery technologies, production systems, charging systems and control systems; testing, standards and recycling. Collaboration with state governments and other stakeholders

The department is experienced in working with other Commonwealth portfolios and agencies, state governments and industry. For example, the Commonwealth Department of Jobs and Small Business, Department of Employment, and Department of Education and Training and the Department of Industry, Innovation and Science collaborated with the South Australian and Victorian state governments, Holden and Toyota in developing and delivering the Government’s $155 million Growth Fund. The Fund supported automotive workers in their transition to other careers and supply chain businesses to diversity and invest in new activities.

The Advanced Manufacturing Growth Centre one of six Growth Centres in the Industry Growth Centres Initiative is well placed to enable the application of innovative manufacturing technologies associated with EVs. The Initiative enables national action on key issues such as collaboration, commercialisation, international engagement, skills and regulation reform.

The CRC program provides opportunities for Commonwealth and state governments to collaborate with researchers and industry partners to focus research and development on use and commercialisation.

These models or another model agreed between the parties could be used for the two levels of government and other stakeholders to work together in supporting supply and value chain manufacturing and service activities related to EVs.

43 CSIRO, ‘Metal membrane for hydrogen separation’, https://www.csiro.au/en/Research/EF/Areas/Low-emissions- technologies/Hydrogen-membrane; Manufacturers’ Monthly, ‘CSIRO tech accelerates hydrogen vehicle future’, http://www.manmonthly.com.au/news/csiro-tech-accelerates-hydrogen-vehicle-future/

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