Electric vehicles are set to reach price parity with traditional combustion engines in the period to 2027, and then will rapidly increase as a percentage of new vehicle sales.
The projection is detailed in a new report prepared by consulting firm Energeia for the Australian Renewable Energy Agency and the Clean Energy Finance Corporation. It foreshadows a potential boom for plug-in electric vehicles(PEVs), including battery electric and plug-in hybrid vehicles, over the next two decades.
However, the report also highlights that in Australia, state level policy settings are more supportive than at the federal level, while both levels of government lag well behind leading international jurisdictions.
In the global leader Norway, for example, government policy has been driving the uptake of battery electric vehicles for a decade, and their market share reached 19% across the entire passenger and light commercial vehicle fleet in 2017 (and 29% of new vehicle sales in 2016).
"To achieve this result, Norway has rolled out an interrelated package of incentives, designed to stimulate PEV uptake, over a long period of time. There has been broad political support for the package of incentives, with different incentives progressively introduced over time by different governments."
With the case example of Norway, the report also identified that especially financial incentives, particularly reductions in up-front purchase costs, support purchase decisions. Non-financial incentives, such as the network of public charging stations, only play a supporting rather than a leading role.
The report also looked at the potential impact of hydrogen fuel cell electric vehicles, but concludes that the risk of the technology supplanting PEVs in the next 20-30 years is remote.