To: The Senate Select Committee on Electric Vehicles.

The Hon. Tim Storer, Chair, Senate Select Committee on Electric Vehicles.

July 27th, 2018.

Dear Senator Storer and Colleagues,

Please find below a brief submission to the Senate Select Committee on Electric Vehicles on behalf of the Bicycle Institute of South Australia (BISA) and MiCycles, Adelaide.

This submission is provided jointly on behalf of:

• The Bicycle Institute of S.A. https://www.bicycleinstitutesa.com Chair: Ms Katie Gilfillan.

• Mr Mic Chapman, Proprietor, MiCycles. http://www.micchapman.com.au MiCycles, Adelaide's Electric Bike Specialist,

The Bicycle Institute of S.A. is a community and volunteer-based cycling advocacy organisation that has been representing the interests of utility cycling in this state since 1974. Encouraging State and Federal Government attention to key issues associated with electric bike use has been a major issue for BISA over recent years. BISA’s contributor to this submission has been Mr Sam Powrie, past Chair and current Committee Member. Sam has a long association with bicycle advocacy in SA and private experimentation and construction of electric bicycles for his own use.

MiCycles is a pioneering Adelaide-based electric bicycle retail and engineering business, run by proprietor Mr Mic Chapman. MiCycles is focussed on the innovative and high-quality sector of the electric bike industry. Mic has a long association with academic, research and industry-based innovation in the electric vehicle industry in South Australia as well as the state chapter of the Australian Electric Vehicle Association.

In the 2003 World Solar Car challenge, Mic drove the Australian winning vehicle, 'Solar Car Kelly' across the finish line. After joining the University of SA’s Team-Trev (‘Two-seater Renewable Energy Vehicle’) he was asked to participate in the Zero Race, a 30,000km round the world electric vehicle race, driving the vehicle from Switzerland to Russia. In keeping with these past experiences he approaches Australia’s ‘EV future’ with a well-developed understanding of the electric vehicle industry at all levels and a profound sense of optimism in the potential for an Australian-based EV industry and market!

A range of technical, economic and regulatory issues make electric cars and electric bikes quite different transport choices and technologies. E-bikes are generally less than 1/20th the cost of the cheapest electric or hybrid car and can be up to 80 times more efficient! This submission will consider electric bicycles only.

Sam Powrie, Bicycle Institute of S.A.

Mic Chapman, Proprietor, MiCycles.

2 Submission: Senate Select Committee on Electric Vehicles. From: Bicycle Institute of S.A. & MiCycles, Adelaide.

1. Summary: South Australia (and Australia generally) have a long history of technical innovation in transport-related design and manufacturing. However our manufacturing industries have not fully embraced the challenge of new technologies such as Fully Automated Design & Manufacture, particularly in relation to electronic technologies and the use of additive manufacturing technologies such as laser sintering. Unfortunately the ‘EV Challenge’ – based as it is on the use of advanced technologies for the key components of both e-bikes and EVs – has thrown this lack of industrial development into high relief along with a lack of policy, investment and regulatory support for all other aspects of the EV industry and value chain. It is essential that Government now understand that such innovation can no longer be ‘left to the market’. Economies such as China and Taiwan have ‘stolen a march’ on Australia. If we want to develop a home-grown e-bike industry we must act quickly to establish and support suitable design and manufacturing technologies locally. We must also ensure that regulatory and taxation settings are appropriately designed to support the effective market penetration of e-bikes generally, and locally made e-bikes and e-bike components. We must be aware that this penetration may not always be about ‘maximum quality’ or ‘maximum profit’ and we must pay heed to the need to build widespread penetration and uptake of e-bikes within our own transport systems if we want a market sufficiently developed to support local industries!

2. Introduction: Australia’s cities are characterized by extensive urban footprints and relatively small populations. Adelaide is a prime example, with a geographic footprint of approx. 90 x 30km and a population of only approx. 1.2M residents (550,000 households). In fact the World Mayor’s Website lists Adelaide as the world’s 351st largest city out of a total of 4,400. Over the last 50 years the city’s residential and industrial development has followed an ‘expansionary’ paradigm rather than one of ‘densification’. This has led to effective commuting distances – home to work – increasing markedly.

This enormous urban footprint, our relatively small population (and revenue base) and the ‘urban sprawl’ that characterises our residential and industrial activity means that Adelaide faces a unique set of distance-related transport challenges. Indeed – in 2018 – with rising fuel prices, increasing fuel supply uncertainties, declining house-hold budgets and the limitations of urban expansion becoming more obvious, we are rapidly approaching an ‘inflection point’ in the development of our transport system.

We note that the growth of car ownership and use, successive Government responses to growing congestion costs and a persistent desire for transport-related ‘marginal economic advantage’ has seen the city ‘locked in’ to a cycle of major road building. Unfortunately more road space is clearly leading to more frequent vehicle use by more drivers over longer distances. That is, more road space and reduced interruption to the traffic stream offer only temporary respite and efficiencies, soon overtaken by increased congestion due to inherent ‘induced demand’.

We also note that it is increasingly clear that car ownership and use is increasingly difficult for a growing proportion of the population – young people, pensioners, those on fixed incomes and those who are simply not willing or able to live with the pollution and fossil-fuel use involved. Transport inequity (lack of access to affordable transport) is an increasing issue in many outlying areas of Adelaide and regional areas, as are the health and welfare demands on house-hold incomes that stem from car-dependency. Clearly Adelaide – as a typical example of a major Australian urban area – faces a set of challenges that simply cannot be met by either building better roads or increased private car use. We need to move on to a ‘next step’! 3 BISA has long promoted Active Transport as the key principle in this ‘next step’. Active Transport is defined as:

“Active Transport. Definition. Active transport includes non-motorised forms of transport involving physical activity, such as walking and cycling. It also includes the use of public transport as many of these trips include walking or cycling which can increase levels of physical activity (Villanueva et al, 2008).”

Unfortunately walking and public transport in Adelaide have their limitations. While walking is nearly universally available to all and at no cost, it is a relatively ‘local’ means of travel. It’s very effective for local shopping, social contact and recreation, but few can commute to work by walking! Public transport (PT) is a very efficient means of moving people, particularly along the major routes between urban centres, but it has its limitations. Across Adelaide buses mainly travel on main roads, often requiring a trip of several hundred metres just to get to a bus stop. There is also a frequent lack of PT connectivity to destinations away from major transport routes (as is the case for many industrial work places).

This is where bicycle use comes in. Bikes are clearly a key complementary component of an Active Transport (AT) system. Bike riding is about 5 times as efficient as walking in terms of energy use and it is several times more effective as a form of health-giving exercise as well. Bikes are faster and more efficient that cars over most urban travel up to about 8kms so can easily eather replace or facilitate access to public transport.

So where do electric bikes fit in? As a form of active transport and unlike motor vehicles, bikes require physical effort. What that physical effort can accomplish is an equation involving rider capacity, travel distance and resistance or ‘load’ (usually a function of rider/load weight, wind resistance and rolling efficiency).

In simple terms, the longer the trip distance the greater the demands on the rider. Or conversely, the more limited rider capacity, the more trip distances and/or loads are constrained. Electric bikes change this equation by augmenting or assisting rider effort, increasing capacity for travelling longer distances and/or carrying greater loads. They also assist slower riders by helping to keep up with or otherwise cope with moving traffic.

In Australia the adoption of a more or less common set of regulations by states means that most e- bikes will be ‘pedelecs’ – that is, their control systems require the rider to actually pedal and supply a degree of effort to energise the bike’s assistance. Many e-bike riders say that, because they rider further, faster and carry greater loads on their e-bike, they actually derive just as much benefit from the incidental exercise involved as they do when riding unassisted.

Essentially, at a widespread ‘population level’ of adoption, e-bikes have potential to radically change the profile of daily commuting travel across Adelaide. Most cars on Adelaide’s roads in commuting hours carry only one person so for most commuting trips, use of a bike or an e-bike really does mean ‘one less car’! Because e-bikes can make commuting travel - as well as more localised travel to shops, services school and so on – a much more realistic and effective proposition, and because they are much cheaper to buy and run than a car (approx.. 6 cents per 20km trip) they are much more accessible to a wider range of people. They have potential to significantly improve community access to effective daily transport while also conferring many, many benefits to populations and communities as a whole. However electric vehicles – whether 4 wheeled or 2 wheels – must be financially attractive! Senator Storer has stated that “We are on the cusp of the biggest disruption to our transport system since the advent of the internal combustion engine”. If EVs and electric bicycles in particular are to achieve 4 this ‘disruption’ they must be generally affordable at a population level if they are to be taken up on the large scale required to bring about the disruption referred to above! Technology by itself is not disruptive – it must be adopted and used to have any effect!

2. Terms of Reference - Commentary: We have structured our submission around the 5 key issues cited as Terms of Reference for the Select Committee.

2.1. The potential economic, environmental and social benefits of widespread electric vehicle uptake in Australia.

The social, economic and environmental benefits of non-assisted bike use have long been understood. For many decades residents of the many, relatively small ‘cyclable cities’ around the world have derived such benefits - personally and at a population-level - simply by cycling to work, shops, services and recreationally:

• Much healthier lifestyles with bike users deriving required levels of daily physical exercise incidentally through their travel activity. Outcome: better health, improved quality of life & productivity, reduced health costs. • More equitable and affordable access to daily travel services required for work, education, shopping. Outcome: improved social equity, educational opportunity & social resilience • Reduced impact of daily transport costs on family budgets. Outcome: increased financial capacity and savings, social resilience. • Major improvements in the efficiency of the general transport system through reduced congestion and increased transport system resilience. Outcome: increased system efficiency & reduced community cost. • Major reductions in carbon emissions and other atmospheric and water pollution Outcome: reduced GGE, climate & environmental impacts. • Improved traffic interactions and road safety outcomes (the ‘safety in numbers’ effect). Outcome: improved road safety & reduced community burden and costs.

The challenge faced in Adelaide is to translate the general benefits of bicycle use to a much wider and larger range of participants by addressing the challenges of:

• travelling over the longer distances required by the urban sprawl that characterizes our city (daily commuting trips average 16kms, usually by private vehicle) • travelling efficiency within the constraints of time and effort required (keep up with mixed traffic and getting to work on time!) • travel costs

One of the key issues involved in this ‘translation’ is the physical effort required for cycling over relatively long distances. However distance is not everything, a fact very obvious from the data from Holland which indicates that the Dutch actually travel to work much more than other countries in Europe (and indeed more than many commuters in Australia!) They do so simply because it’s easy and convenient to do so.

How can we translate to the Australian urban environment. What are the alternatives? Clearly at current rates of Government (and tax payer) investment it would take many, many years, considerable expenditure and a great deal of sustained political commitment to make our urban areas as ‘bike friendly’ as Holland’s. Clearly we need to return to the question of ‘cycling effort’ and how we can make widespread bicycle use much easier and much more attractive. 5 Electric bikes have the potential to directly address the challenge of ‘cycling effort’. They make it entirely possible for the average Australian to easily cycle at least twice the average daily commuting distance (32km) at minimal cost – just a few cents – for the daily recharge. Because the cycling effort is assisted it becomes possible to easily travel point-to-point in the same time as by car, especially when the time involved in parking is factored in. And because electric bikes are extremely inexpensive to recharge and relatively inexpensive to buy and service (compared to motor vehicles), their use becomes very realistic for the average commuter who may easily spend $1,500 p.a on either petrol costs alone or daily public transport fares.

2.2. Opportunities for electric vehicle manufacturing and electric vehicle supply and value chain services in Australia, and related economic benefits.

There are clearly some key questions to be addressed is South Australia is to develop an ‘E-Bike Economy’:

• Can South Australia sustain a major EV economy, which could potentially include and support ‘e-bike’ and ‘e-bike component’ manufacturing (as well as associated assembly and marketing industries and economies)? • Is manufacturing a step too far? Should we simply focus on local e-bike assembly and marketing using foreign-sourced components? • Is manufacturing for export a possibility? • Is it most realistic to focus on and support ‘kit installation’ based on conversion of conventional bicycles (sale of kits, installation and maintenance services)…

…and perhaps more importantly

• what are the practical steps we might need to take to work towards an ‘e-bike economy’ focussed on any or all of these levels of activity? • what are opportunities do we have now to supply, maintain and support sufficient use of electric bikes to support the ongoing sustainable development of an e-bike industry?

In short, how do we build an e-bike economy? There are several key opportunities to be considered:

Value Chain Services: The potential of e-bike related value-chain services is enormous. It could include:

• the manufacture and sale of e-bike accessories (specialised lights, • specific, non-specific and proprietary e-bike spares and parts • supply of tyres, batteries and other ‘consumables’ • specialized local repair and maintenance services • the impacts of increased house-hold spending facilitated by savings on day-to-day travel expenditure • the development of a formal e-bike engineering and technical/mechanical repair training qualification and accreditation and subsequent expansion of employment opportunities.

If the local manufacture of e-bike components and complete bikes is considered many more opportunities become available. These would include:

• the possibility for specialized tertiary-level training and technical accreditation • the development of local supply-chain industries supplying items such as e-bike motors, controllers and wiring looms 6 • development of local specialized technical and engineering consultancy and design services.

Such opportunities would of course have a significant impact on the employment of tertiary graduates and would provide many opportunities for post-graduate study and skill development that are currently unavailable!

2.3. Measures to support the acceleration of electric vehicle uptake.

We believe there are several opportunities available to accelerate electric bike uptake. They include:

• keeping retail prices within the reach of every-day users by reducing or eliminating unnecessary or inappropriate import taxes on e-bikes, e-bike conversion kits and parts. • support for a Federal ‘Cycle Scheme’ such as introduced in the UK, supporting workers in adopting e-bikes for their daily commute • insurance industry support to those commuters adopting e-bike use (utilising accumulation of concessions on health fund premiums (stemming from participation in a Cycle Scheme as per above).

Electric Bike Supply & Retailing:

• Imports & minimising unnecessary import taxes. • Retailing & distribution • Specialist maintenance and repairs • Local manufacturing & assembly.

All of the above necessarily exist within an economic framework, the primary component of which is the impact of import taxes and GST. The Federal and State Governments need to carefully review and remove any unnecessary import taxation on e-bikes and related components sourced from overseas. Earlier this year a 5% tax concession on imported e-bikes was removed, ostensibly to support a very small number of local Australian manufacturers. There has been strong argument that this will compromise the ongoing importation and sale of foreign-sourced e-bikes and that – for the foreseeable future –the sale, maintenance and use of these foreign-made e-bikes will be essential for the development of a widespread ‘e-bike culture’ in the community!

Clearly it seems there may be conflicting interests in this argument. It is essential that a balance of interests be sought. Potential conflict between importers, distributors and retailers, and those attempting to build a local manufacturing industry should not be allowed to compromise the growth of widespread and broader penetration of e-bike use in the community and within our transport systems. Ultimately the interests of both local manufacturers and e-bike importers are both entirely dependent on this ongoing penetration!

The Federal decision in March 2018 to withdraw the 5% tax concession appears to have been reactive and based on a request from one key Australian e-bike manufacturer of relatively expensive machines. Unfortunately it will result in a general price increase for all e-bikes, including those cheaper machines at the lower end of the market. We must bear in mind that these ‘lower- end’ imported machines are just as important as those of higher-quality and price. Indeed it can be argued that the lower-end bikes are the ones most likely to facilitate the use of e-bikes to:

• increase equity of transport access for those unable to afford or use private cars • replace unnecessary use of cars on our transport network. 7 We believe that a careful review of the potential impacts of imposition of Federal import taxes and related import regulations on the development is required.

2.4. Measures to attract electric vehicle manufacturing and electric vehicle supply and value chain manufacturing to Australia.

We believe that there are key opportunities for establishing key partnerships between local distribution networks and:

• major e-bike manufacturers in Europe and the Far East (Bosch, Shimano, Ezee etc) • major conversion-kit manufacturers (mainly in China – Bafang etc)

There is clear evidence that this is the fundamental basis for the success of the major distributors of e-bikes and electric-assist conversion kits in the UK, USA and Canada. The success and international impact of Canadian and Vancouver-based e-bikes.ca is a case in point. Their close consultancy and marketing partnerships with major Chinese and Taiwan e-bike motor and controller manufacturers have allowed them to build extremely successful and specialized ancillary e-bike businesses that include specialist battery manufacturing and the design and supply of the world’s most sophisticated and popular e-bike control system.

We believe that Federal and State Governments should:

• sponsor trade missions to major annual e-bike trade shows in China and Taiwan and make such missions available to local manufacturers, enh=gineering design agencies and retailers • investigate, review and minimise regulatory, policy or economic barriers to the adoption of major e-bike design standards (such as Bosch and Shimano motor installation patterns and standards) and associated proprietary or licenced component manufacture or use. Bosch and Shimano – two of the dominant manufacturers of advanced e-bike pedelec systems utilise specific proprietary design standards, subsequently licenced to frame manufacturers who wish to use their motor, gearing and control systems • offer tax concessions and amnesties to foreign e-bike manufacturers seeking to establish manufacturing activities in Australia • offer funded support for major design, prototyping and development exercises in establishing local manufacture of key e-bike components such as motors and control systems.

This latter point in particular offers exciting and extremely valuable opportunities for the local adoption of Advanced Additive Manufacturing technologies such as Selective Laser Sintering and fully-automated armature winding and electronics manufacturing. It is important to understand that the economies of scale for products produced by such technologies are such that exports to global markets and build-to-order arrangements become quite realistic!

2.5. How federal, state and territory Governments could work together to support electric vehicle uptake and manufacturing, supply, and value chain activities.

We recommend the creation of Federal and State trade commissions aimed at fostering industry interest in e-bike manufacturing. In particular we would encourage Governments to consider how they might support the adoption within Australian industry of the advanced manufacturing technologies required to make the local manufacture of e-bike parts a realistic economic proposition. Australia has a long history of technological innovation in this area. Local bike manufacturer Avanti is a case in point. In a partnership with The University of the Northern Territory and related company IMT Technology, in the early 2000s Avanti built and sold the 8 Electra, an early Australian e-bike which used a locally made Axial Flux Motor. This motor remains one of the most advanced e-bike hub motors ever manufactured!

To foster the development of local design and manufacturing we would suggest creation of a federally supported e-bike Manufacturing Office aimed as assist smaller domestic manufacturers and design consultancies to partner with major e-bike and component manufacturers overseas in developing products most suited to the Australian market. In particular we believe that Government support is required to encourage the local design and development of products such as the axial flux motor mentioned above to the point when the technologies are scalable and suitable for licensing and/or local manufacture and export overseas. The establishment of an advanced automation manufacturing facility in South Australia would be essential for such an endeavor, something that is unlikely to happen without Government support!

Some key strategies we recommend be considered by Government would include establishing and sponsoring: • an advanced project design and development competition aimed at scalable component and product development • EV vehicle and bike races and competitions such as the past Solar Challenge races • support for a highly varied e-bike market, including the very much ignored use of e-cargo and freight bikes and e-pedal taxis.

References: http://www.industryandskills.sa.gov.au/upload/publications/bike- economy.pdf?t=1532584896308