When the ACT announced plans to phase out the sale of new combustion engine cars from 2035, the move was welcomed by many who see a transition to electric vehicles as key to reducing transport-related carbon emissions, and ultimately lower costs.

The plan – which was outlined in early July as reported by The Driven’s Sophie Vorrath here – is not exactly groundbreaking. Similar plans have already been introduced in many jurisdictions throughout the western world, such as in Norway (2025), and the UK (2030) to name just a few.

It includes plans to disallow adding more ICE (internal combustion engine) cars to taxi and ride-share fleets from as early as 2030, more support for EV charger rollouts, and aims to ensure 80-90% new light vehicle sales are electric by 2030.

But some transport industry stakeholders were not so pleased with the idea.

As reported by the ABC, the Australian Automotive Dealer Association (AADA) is worried that there is no guarantee electric vehicle prices will drop enough by 2035 to be affordable for the general populace.

In comments to the ABC, James Voortman said he is concerned that electric vehicles might not take hold, despite the fact that three decades of policy to encourage uptake in Norway – which is as long as a drive from Brisbane to Melbourne – means eight in 10 new car sales there are now electric.

“These vehicles might become irrelevant, [so] why ban them? If we are seeing the consumer uptake which we are of hybrids at the moment, I am sure that will translate to electric vehicles,” he was quoted as saying by the ABC. “If they are affordable and available en masse, people will buy them.

“I don’t think a ban is the right way to do this. We are really locking ourselves in at a time where we really don’t know what the future holds.”

Technical director for green mobility for the Australia and New Zealand arm of multinational energy company Engie, Christopher Munnings, says this attitude is disappointing.

Taking to LinkedIn to describe in detail the reasons behind his disappointment, he said, “These types of policy are specifically designed to reduce the cost of motoring for the less well off, so to see reports of people “fearing” the opposite without any mention or discussion on how this policy would somehow lead to higher prices is frustrating.

“It shows a complete misunderstanding of the automotive market and the intent of the policy. You don’t have to be a genius to work out who is promoting this position.”

The ACT in 2021 introduced several incentives designed to assist its residents with the difference in price between a combustion engine car and an electric car, which often costs many thousands more because of the cost of making the battery.

It offers a $15,000 interest-free loan for new EV purchases, and it is also waiving stamp duty for electric cars, motorbikes scooters and trikes until 2022, as well as offering two years’ of free registration until 2024 with the option of future incentives.

Munnings notes that these policies are in fact already designed to target the “massive market failure that exists with cars that leads to the less well off being forced to pay more and more on transport.”

“The wealthy, middle and working class (me included) buy new cars,” he says.

“If you can afford a new car you can also afford the higher maintenance and fuel costs associated with a big car.

“With pretty much zero policy or tax incentives to change that behavior and even the odd disincentive (like FBT exemption on utes) people buy the biggest car they can afford,” he says.

He notes that by encouraging more new EV uptake, this will in turn feed a secondhand market of more affordable cars – that also have less maintenance costs – for those on lower incomes.

He also notes that because property prices are often cheaper further away from city centres, those buying in outer suburbs are already at a disadvantage because with a lack of access to frequent public transport, there is also more reliance on privately owned vehicles and in turn higher fuel costs.

“I could in theory by a large SUV with a roaring V8. Then when petrol prices rise take the train to work, only driving on the weekend,” he says. “For someone who needs to drive their car everyday they don’t have that option – like a parent who needs space for 3 car seats living in an outer suburb.”

“Encouraging and then eventually forcing me to buy a car with low running costs will be transformative for those on lower incomes who inherit a car that cost $16 instead of $160 to fill up each week.

“At worst, it will make motoring more expensive (slightly) for me (assuming that EV’s remain more expensive than the ICE equivalent by 2035 which they won’t) because the depreciation will be greater on my new car.

“This is because as the money that someone on a low income can spend on a car is far more fixed than the amount someone on a higher income can spend on their new car,” he says.

“The idea that in 10 years’ time fuel will be cheap and EV’s will be expensive is utter nonsense. As is the idea that encouraging the middle class of Australia to buy more economical cars is somehow hurting the poor.”

Bridie Schmidt is associate editor for The Driven, sister site of Renew Economy. She has been writing about electric vehicles since 2018, and has a keen interest in the role that zero-emissions transport has to play in sustainability. She has participated in podcasts such as Download This Show with Marc Fennell and Shirtloads of Science with Karl Kruszelnicki and is co-organiser of the Northern Rivers Electric Vehicle Forum. Bridie also owns a Tesla Model 3 and has it available for hire on evee.com.au.

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