Why We Need Electric Vehicles? Australia’s Largest-Ever ECV Order to Push EV Industry

  • Jul 25, 2019 AEST
  • Team Kalkine
Why We Need Electric Vehicles? Australia’s Largest-Ever ECV Order to Push EV Industry

Around 91% of the global population lives in places exceeding the air quality level limits set by the World Health Organization (WHO). Every year, some 4.2 million deaths are linked to exposure to outdoor air pollution, according to stats from the WHO. Air pollution impacts every region across the globe, with growing air pollution levels resulting in the risk of non-communicable diseases like stroke, cardiovascular diseases and lung cancer, as well as asthma and other chronic and acute respiratory diseases.

Air pollution is continuing to take a toll on the health of children, women, elderly and people with existing heart and lung conditions - the most vulnerable population. Industrial activities, coal-fired power plants and inefficient modes of transport are among the major contributors towards air pollution. Urgent actions are needed to help lower air pollution, and governments across the globe are making serious efforts to address air pollution.

Australia’s Contributions towards Addressing Air Pollution

By global standards, Australia has very clean air. `The government also claims to be on track to meet its targets of lowering the greenhouse gas emissions to 5% by 2020. However, there are several market reports, which claim that Australia would become one of the worst climate change contributors across the globe in the coming years. Moreover, in the previous year, cars and light duty vehicles accounted for 75% of the total transport emissions in the country, according to the National Greenhouse Gas Inventory.

Australia has been an early adopter of new technologies; however, the country has fallen behind in the adoption of electric vehicles. The number of electric vehicles running on its roads is currently very low when compared with other countries like New Zealand. In order to promote the sales of electric vehicles in the country, the government is putting in several policies and reforms.

Recently, in the month of April 2019, the Australian government announced the National Electric Vehicle policy, aimed at boosting investments and driving the country toward a cleaner future mobility. The policy includes a target of 50% of all new car sales to be electric vehicles (EVs) in the country by 2030, in addition to a target of 50% of new government leases and purchases to be EVs by 2025.

Moreover, the Clean Energy Finance Corp (CEFC), which is a government-owned organisation responsible for making investments in clean energy projects, during the NSW Electric Vehicle Drive Day on July 4, urged fleet buyers to support Australia in addressing one of its toughest emissions challenges – transport. According to the organisation, though the adoption of electric cars is expected to take time in picking up the pace due to their high cost, fleet owners could quickly transition to electric vehicles. The organisation has financed over 1,000 electric vehicles through its co-finance programs with major financial institutions.

The Electric Vehicle Council, which is the national representative of the Australian electric vehicle industry, expects electric vehicles to become cheaper than ICE vehicles by mid-2020s. Currently, in Australia, there are 19 electric vehicles. Moreover, before end 2019, four more models are expected to enter the market. Clean fuel vehicles are not just good for the environment as they reduce emissions, they also help in saving money as they are cheaper to run.

Largest-Ever ECV Order

Growing opportunities in the Australian electric vehicle market, backed by government initiatives towards encouraging adoption of electric vehicles in the country, are attracting several automakers towards Australia.

Chinese automaker BYD struck a deal with Australia-based alternative energy truck and bus specialist Nexport and Corporate and Asset Finance (CAF), in the first half of 2019, to sell its battery electric light-duty vehicles in Australia and New Zealand. CAF is part of Macquarie Group. The contract is the largest order till date, for electric commercial vehicles (ECVs) in Australia. As the local distributor of BYD, which is an electric commercial vehicle and lithium-ion battery producer, Nexport will be engaged in the sales as well as support for BYD trucks in the country.

In September, BYD will launch T5 and T6 light electric vehicle (LEV) models in Australia, which will have a range of 200-300 kilometres and are expected to be well-suited for the operators of 4.5-7 tonne logistics and general commercial trucks. With an initial target of 500 trucks, Nexport expects to sell as many as 1,000 electric tucks on an annual basis in the coming years.

Moreover, Nexport expects electric trucks to be a game changer for the country’s electric vehicle market and would result in the mass adoption of EVs in the Australian market. Companies that are seeking to enter the EV market could consider entering the market with electric trucks, as with the growing popularity of online shopping in recent years, demand for trucks for making home deliveries is expected to grow at a robust pace in the coming years, according to Nexport Managing Director Luke Todd. Though the trucks would have higher upfront costs, they are likely to offer considerable fuel savings. Moreover, the company expects to offer these trucks at some attractive finance packages.

Truck is a good option to enter the electric market as it can be distributed in bulk. Additionally, several retailers including IKEA and Woolworths are shifting their preference to electric trucks and signing contracts with only electric vehicle focused transport companies. Number of retailers trialling electric trucks for home deliveries is growing, reflecting growing focus of the market towards this category of electric vehicles in order to improve their environmental sustainability

The deal between BYD-Nexport represents a challenge to SEA Electric, which is a Victoria-based manufacturer of electric commercial vehicles. Its SEA-Drive® electrification technology enables electrification of most of the light commercial vehicle (LCV) and medium & heavy commercial vehicle (M&HCV) segments. SEA Electric, which was founded in 2013, is currently focusing on expanding its footprint in the United States market.

Demand for electric vehicles is increasing in a range of industries in Australia, owing to growing preference for cost-effective and proven low emission vehicle solutions among consumers. As a result, share of electric vehicle providers in the Australian market is also expected to grow.


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