To EV or not to EV?

Credit: EVUp

Written and researched by Sen Toyotoshi ^ VivaEthical Data Analysis & Operations Support

The Rise of Electric Vehicles

With the popularity of electric vehicles (EV’s) increasing, many consumers are asking about EV and sustainability.

Are these vehicles actually good for the environment? Especially given the uncertainty about the manufacture, labour issues, and mining requirements to put these vehicles together.

Some sceptics even argue that EV’s actually have a larger carbon footprint than petrol vehicles.

What is an EV’s Carbon Footprint?*

The process of making electric vehicles is more carbon-intensive than making a traditional petrol vehicle
(ICE = internal combustion engine) and, up to 5 times more polluting in the manufacturing and assembly process!

The good news:

However, research by the Fuels Institute (US) found that the carbon emissions resulting from the manufacture of EV’s quickly becomes less than petrol vehicles as you drive the vehicle.

How did the Fuels Institute # come to this conclusion?

Their studies considered many factors right from the start of an EV life cycle, including the:

• production materials and their origin;

• manufacturing process;

• delivery of fuel for petrol vehicles; and

• process of burning fuel.

But…

Just because EV’s are greener than traditional petrol vehicles, this doesn’t mean they’re perfectly sustainable.

• Driving style for example, can affect how long your EV’s battery will last.

• Also, the study was conducted in particular American states which were able to generate low carbon electricity.

• However, if you drive an EV in an area which generates coal-powered electricity, this can result in a EV battery with carbon emissions higher than those from a traditional ICE over the vehicle’s life.

• Replacing batteries is also costly and uses carbon-intensive raw materials.

Electric Vehicles in Australia

You may have seen more electric vehicles on the road than before - there has indeed been a big increase in the number of EV’s in Australia – 2022 saw a 65% increase in EV sales!

However, Australia is still really lagging behind other countries when it comes to EV uptake. Only 3.39% of all new car sales in Australia are EV’s, which is really low compared to the UK, where one in five new cars are electric.

Why the slow uptake?

• Compared to other markets, Australia has been slacking in fuel efficiency standards and without clear plans to phase out petrol engines. This discourages car manufacturers who are considering EV export to Australia when it is more favourable for them to sell EV’s in greater volumes to faster growing markets, who also offer incentives to export.

• We also have a relatively small numbers of EV charging stations in Australia. Though numbers have increased 15% from early 2021 and, hopefully, the infrastructure required for more people to drive EV’s will continue to increase.

Australia’s Policy on EV’s

Driving the Nation Fund

The new Labour federal government has reaffirmed its commitment to helping Australians buy EV’s , and has just settled on a deal with The Greens and Independent Senator David Pocock.

EV’s are the main focus with a number of funding announcements to help increase the uptake of electric models, as well as support for the rollout of charging infrastructure.

Private EV Buyers

• There will be no fringe benefits tax on EV’s;

• For plug –in hybrids, these tax breaks will only be available until April 2025. (Senator Pocock wanted the government to drop tax breaks for plug-in hybrids as they use fossil fuels)

• A key commitment in the mini –budget was an electric car discount, whereby…

Car Cost Outcomes

The fringe benefit tax and 5.0 per cent import tax will be cut for eligible EV’s,** which will bring down the price of some electric models.

This could save an employer up to $9000 a year on an EV that costs about $50,000, or around $4700 for someone using salary sacrifice.***

Vehicle Purchases by Government

The government says its own fleet purchases will be 75 % electric by 2025, which will have the flow-on effect of the vehicles eventually ending up on the second-hand market as more affordable used EV alternatives for private buyers.

EV charging network

$40 million from the Driving the Nation Fund ($275.4 million over 6 years) will be used to build a national EV charging network, with 117 fast charging stations to roll out across the country in partnership with the NRMA.

To EV or to not EV?

The key in all this is to decarbonise electricity. This can be done with sourcing electricity from renewable energy and to recycle car batteries. The advancement of technology is already working on making EV’s more affordable and more sustainable. The energy needed to make the batteries has decreased already and renewable energy as an industry is growing. Many car manufacturers are working on reducing their carbon emissions in their production process as well.

In summary, it appears that EV’s have a bright outlook ahead. And despite the advancements that still need to be made, EV’s are still the more sustainable option for your vehicle.

Notes

* The term carbon footprint is shorthand to describe the best estimate that we can get of the full climate change impact of something. That something could be anything – an activity, an item, a lifestyle, a company, a country or even the whole world.

** Eligible EV’s, hydrogen fuel-cell powered cars and plug-in hybrids will be included if their retail price is less than the luxury car tax threshold for fuel-efficient cars, which for this financial year is $84,916.

*** Salary sacrificing for an employee (ATO)

Next steps

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References

Crowe, David. “Cheaper EV’s, Hybrids after Greens, Pocock strike a deal” 22 November 2022. The Age

Kurmelovs, Royce. “Electric Vehicles Just 3.39% of New Australian Car Sales despite Sharp Increase, Report Says.” The Guardian

Taub, Eric A. “E.V.s Start With a Bigger Carbon Footprint. But That Doesn’t Last.” 19 October 2022. New York Times

White, Emmett. “EV’s Carbon Footprint Will Decrease over Time, Report Says” 28 October 2022. Autoweek

#NY times quotes Fuels Institute Ricardo PLC EV report “Life Cycle Analysis Comparison.” January 2022. (The Fuels Institute is a non-profit think tank focusing on fuels, vehicles and consumers.)

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