PARLIAMENT OF VICTORIA Legislative Council Economy and Infrastructure Committee Inquiry into electric vehicles Parliament of Victoria Economy and Infrastructure Committee Ordered to be published VICTORIAN GOVERNMENT PRINTER May 2018 PP No 377, Session 2014‑18 ISBN 978 1 925703 34 4 (print version) 978 1 925703 35 1 (PDF version) Committee functions The Economy and Infrastructure Standing Committee is established under the Legislative Council Standing Orders Chapter 23 — Council Committees and Sessional Orders. The committee’s functions are to inquire into and report on any proposal, matter or thing concerned with agriculture, commerce, infrastructure, industry, major projects, public sector finances, transport and education. The Economy and Infrastructure Committee (References) may inquire into, hold public hearings, consider and report on other matters that are relevant to its functions. The Economy and Infrastructure Committee (Legislation) may inquire into, hold public hearings, consider and report on any Bills or draft Bills referred by the Legislative Council, annual reports, estimates of expenditure or other documents laid before the Legislative Council in accordance with an Act, provided these are relevant to its functions. Government Departments allocated for oversight: • Department of Economic Development, Jobs, Transport and Resources • Department of Education and Training • Department of Treasury and Finance. ii Economy and Infrastructure Committee Committee membership Mr Bernie Finn MLC Mr Mark Gepp MLC Mr Jeff Bourman MLC Chair Deputy Chair Eastern Victoria Western Metropolitan Northern Victoria Ms Samantha Dunn MLC Mr Khalil Eideh MLC Ms Colleen Hartland MLC Eastern Metropolitan Western Metropolitan Western Metropolitan (from February 2018) (until February 2018) Mr Shaun Leane MLC Mr Luke O’Sullivan MLC Mr Craig Ondarchie MLC Eastern Metropolitan Northern Victoria Northern Metropolitan Inquiry into electric vehicles iii Committee staff Secretariat Lilian Topic, Secretary Dr Pamie Fung, Inquiry Officer Kieran Crowe, Research Assistant Michelle Kurrle, Research Assistant Prue Purdey, Administrative Officer Joanne Bush, Administrative Officer Christina Smith, Administrative Officer Committee contact details Address Economy and Infrastructure Committee Parliament of Victoria, Spring Street EAST MELBOURNE VIC 3002 Phone 61 3 8682 2869 Email [email protected] Web www.parliament.vic.gov.au/eic This report is available on the Committee’s website. iv Economy and Infrastructure Committee Contents Preliminaries Committee functions ii Committee membership iii Committee staff iv Terms of reference ix Chair’s foreword xi Acronyms xiii Findings xv 1 Introduction 1 1.1 Scope of the inquiry 1 1.2 Inquiry process 1 1.2.1 Submissions and public hearings 2 1.3 Definitions 3 1.4 The report 4 2 Electric vehicles: potential benefits and losses 7 2.1 Potential economic benefits and losses with the advent of electric vehicles 8 2.1.1 Recharging and maintenance costs 8 2.1.2 Potential jobs growth in electric vehicle technology 11 2.1.3 Job losses in the automotive industry 12 2.2 The loss of Fuel Excise Tax from electric vehicles 16 2.2.1 Decline in fuel excise tax revenue 17 2.3 The potential impact of electric vehicles on the electricity grid 19 2.3.1 The impact of more electric vehicles on energy security 19 2.3.2 The electricity grid 21 2.4 Regional and rural Victoria 23 2.5 The transition to electric vehicles 25 2.5.1 Timing of the arrival of electric vehicles in Australia and Victoria 26 2.5.2 Manufacture of electric vehicles 27 2.6 The potential environmental benefits of electric vehicles 28 2.6.1 Victorian renewable energy targets 29 2.6.2 Electric vehicles and emission reductions in Victoria 30 2.6.3 Electric vehicles have recyclable batteries 33 2.6.4 Solar power and electric vehicles 34 2.6.5 Electric vehicles represent a low‑cost option to support reduce transport emissions 35 2.7 Public health benefits with the advent of more electric vehicles 36 2.7.1 Internal combustion engine vehicles and public health in Australia and in Victoria 37 Inquiry into electric vehicles v Contents 2.8 Electric vehicles reduce transport noise and improve amenities 38 2.8.1 Sound standard in electric vehicles to ensure audibility for pedestrians 39 2.9 Electric vehicles may reduce Victoria and Australia’s fuel insecurity 40 3 Measures for electric vehicle private ownership 43 3.1 Unlocking electric vehicle uptake 44 3.1.1 Victorian consumers are interested in purchasing electric vehicles 44 3.1.2 Car manufacturers seek a signal that the electric vehicle market will grow in Australia 45 3.1.3 Options for Victoria 47 3.1.4 Government actions overseas 48 3.1.5 Electric vehicle assistance in Australian states and territories 49 3.1.6 A State electric vehicle target 50 3.1.7 Options for financial incentives 51 3.1.8 Non‑financial incentive options 55 3.1.9 Coordination between Federal and State Governments 58 3.2 Infrastructure to support electric vehicles 60 3.2.1 What is electric vehicle charging infrastructure? 61 3.2.2 Charging infrastructure in Australia 62 3.2.3 Faster charging 63 3.2.4 The costs of public and private charging outlets in Victoria 63 3.2.5 What happens when a driver wants to recharge their car in Victoria? 64 3.2.6 Charging standards and international trends 66 3.2.7 Public charging infrastructure in the regions 68 3.2.8 Diversifying the charging stations deployed in Victoria 69 3.2.9 Homes and houses without private driveways and garages 70 3.2.10 Multi‑dwelling developments and commercial buildings 72 3.2.11 What are governments doing overseas? 73 3.2.12 What are other Australian states and territories doing? 74 3.3 Automotive industry concerns about the impact on the mechanics and service industry 78 3.3.1 New vehicle technology is changing the industry 79 4 Electric vehicles: government fleets and public transport 81 4.1 Electric vehicles and public sector fleets 81 4.1.1 Electric vehicles and public sector fleets 81 4.1.2 Electric vehicles and local council fleets 83 4.1.3 Local government purchasing policy and protocols 86 4.2 The Victorian State Government fleet 87 4.2.1 Barriers to inclusion of electric vehicles in the Victorian Government fleet 89 4.3 Public transport bus fleets 97 4.3.1 The applicability of electric buses in public transport fleets 97 4.3.2 Charging infrastructure requirements for electric buses 101 4.3.3 Victoria’s public bus operators 105 vi Economy and Infrastructure Committee Contents 5 Options to support the manufacture and assembly of electric vehicles in Victoria 109 5.1 Victoria’s automotive manufacturing industry 109 5.1.1 Car manufacturing in Victoria before the industry’s closure 110 5.2 The closure of Victoria’s automotive manufacturing industry 111 5.3 Why did Victoria’s automotive manufacturing industry close? 111 5.3.1 Reasons given by the car manufactures for their closure 111 5.3.2 The Productivity Commission’s inquiry into Australia’s Automotive Industry 112 5.4 Financial assistance to car manufacturers 115 5.5 The impact of the closure of the automotive manufacturing industry in Victoria 115 5.5.1 Direct job losses from the large car manufacturers 115 5.5.2 The automotive supply chain industry 116 5.6 Measures to assist Victoria’s automotive industry workers and businesses 117 5.6.1 Commonwealth Government assistance programs 117 5.6.2 Victorian Government assistance programs 118 5.6.3 Assistance provided by car manufacturers 119 5.6.4 Impact of assistance programs 120 5.7 Electric vehicle manufacturing 121 5.7.1 How electric vehicles are different to internal combustion engine vehicles 121 5.7.2 How are electric cars manufactured in comparison to combustion engine cars? 122 5.8 Further potential job losses in the automotive manufacturing industry 124 5.9 Options to support the manufacture and assembly of electric vehicles in Victoria 125 5.9.1 Electric vehicle manufacturers currently operating in Victoria 125 5.10 Could Victoria have a large‑scale electric passenger vehicle manufacturing industry? 128 5.10.1 What considerations do vehicle manufacturers make when choosing locations for manufacturing facilities? 128 5.10.2 Government incentives to attract electric vehicle manufacturers 130 5.10.3 Conclusion 133 5.11 Victoria should incentivise niche or high‑value manufacturing of electric vehicles and their parts instead 134 5.11.1 What training and skills are needed to manufacture electric vehicles? 136 5.12 Electric vehicle batteries 137 5.12.1 Could Victoria set up an electric vehicle battery manufacturing industry? 138 5.12.2 Battery recycling 139 5.12.3 Battery re‑purposing 141 Inquiry into electric vehicles vii Contents 6 Car sharing and electric vehicles 143 6.1 Types of car sharing 143 6.1.1 Station‑based 144 6.1.2 Free‑floating 145 6.1.3 Peer‑to‑peer 146 6.2 Electric vehicles for car share fleets 146 6.3 Potential community benefits from increasing the use of electric vehicles in car‑sharing 148 6.4 Future potential: autonomous vehicles and shared mobility 149 6.4.1 Autonomous vehicles 149 6.4.2 Shared mobility public transport options 149 6.5 Necessary government support 151 6.5.1 Leadership and policy stance 152 6.5.2 Regulatory, planning scheme and legislation changes 154 6.5.3 Infrastructure incentives and support 155 6.5.4 Parking 157 6.5.5 Purchaser incentives and support 159 Appendices 1 Submissions 161 2 Public hearings 165 viii Economy and Infrastructure Committee Terms of reference Inquiry into electric vehicles On 8 February 2017, the Legislative Council