The world has already heated by 1.3ºC above pre-industrial levels. The excess heat is driving more ferocious and frequent fires, floods and heatwaves, rising sea levels, and more volatile and unpredictable weather. Australia must achieve net zero emissions as soon as possible to avert further catastrophic warming. To maintain a 67% chance of avoiding global warming above 1.9 degrees, Australia would need to achieve net zero by 2035. Australia’s current Nationally Determined Contribution for 2035 is a range of 62-70% below 2005 levels. The top end of the range (70%) is closer to what is needed to protect Australians, and every tonne of climate pollution matters. The review of the Electric Car Discount must be considered in this context.
The Climate Change Authority’s (CCA) advice on Australia’s 2035 emissions targets makes clear that rapid electrification across the economy is essential if Australia is to align with a credible pathway to net zero and limit global warming. Its analysis shows that deep, sustained reductions in transport emissions are required well before 2035 to avoid locking in high cumulative emissions. The modelled pathways for achieving the Australian Government’s 2035 climate target rely on a sharp increase in electric vehicle uptake through the 2020s and early 2030s, with internal combustion vehicles progressively replaced by electric vehicles (EVs) as the dominant form of new sales. The CCA advice also highlights that achieving Australia’s 2035 targets will require a much larger and more flexible electricity system, including a substantial expansion of storage to manage a renewables-dominated grid. Electrified transport plays a dual role in this transition: EVs increase electricity demand, but they also provide flexible load and, over time, distributed storage that can support system reliability and reduce the need for more expensive, centralised infrastructure.
Policies that accelerate EV uptake deliver compound climate benefits: they cut transport emissions directly while also having the ability to support the efficient operation of a high-renewables power system. Conversely, policies that slow EV adoption increase both emissions risk and system costs, making Australia’s 2035 climate targets harder and more expensive to achieve.
The Climate Council notes that the CCA’s advice underscores the importance of maintaining strong, complementary demand-side policies alongside supply-side measures. Weakening policies such as the Electric Car Discount at this critical stage would increase the risk of missing Australia’s climate targets by slowing EV uptake precisely when acceleration is required.
The Climate Council strongly urges the Government to retain and strengthen the Electric Car Discount as a core climate policy instrument.
key findings
- The Electric Car Discount has played a significant role in accelerating EV uptake in Australia.
- It is critical that the Electric Car Discount continues. This is a moment to maintain and strengthen policies that accelerate the transition, rather than weaken them.
- The Climate Council supports the Electric Car Discount continuing for Battery Electric Vehicles.
- The Electric Car Discount has been central to Australia starting to catch up to other OECD countries on EV adoption. Now, there is an opportunity to evolve the Discount to incentivise and support the early adoption of Vehicle to Grid (V2G) charging.
- Australia’s EV market has changed since the Discount was introduced, but these changes reinforce the case for continued support.
- Achieving Australia’s 2035 climate targets will require a rapid expansion of charging infrastructure alongside increased EV uptake.
- The cost of the Electric Car Discount cannot be assessed in terms of simplistic dollars per tonne of carbon abatement, but should be assessed as a measure to create early momentum while Australia is still in the early stages of adoption.
- Consumer acceptance of electric vehicles has increased markedly over the period of the Electric Car Discount’s operation.
