eReadiness Study 2023: How ready is Australia for the electric transport revolution?

Survey
15 minute read

The race to net zero is on – and it’s urgent. Australia will need to pull out all the stops and use every available lever if it’s going to get anywhere near the target of net zero emissions by 2050. With the transport sector accounting for 18.7% of Australia’s emissions¹, it’s time to hit the accelerator on the electric transport revolution.

The perfect market conditions for transformation are emerging: federal and most state governments are adopting supportive zero-emissions vehicle policies, decarbonisation plans are rolling out across the private and public sectors, and adoption of electric vehicles (EVs) is rising. More and more manufacturers are including electric vehicles in their range. We’re also seeing continual refinements in battery technology and increasing investment and innovation in hydrogen and other sustainable fuels.

These favourable conditions for change are rapidly gaining momentum and present significant opportunities for consumers, fleet operators, energy providers, charging infrastructure owners and operators, and investors.

50%

of all vehicle sales will be EVs by 2027

88,000

charging points required in Australia by 2027

73%

of respondents see reducing fuel costs as the top motivator for an EV purchase

43%

of respondents see limited range as a barrier to entry

Global study reveals Australia’s eReadiness gap

PwC’s latest global eReadiness study of 18 countries shows just how far Australia trails the pack when it comes to its readiness to adopt EV technology. The study – which includes a comprehensive index of the maturity of EV markets and consumer research of more than 700 Australians – ranked Australia 12th for supply, 15th for demand, 16th for government policies and incentives and 17th for infrastructure (such as charging points and renewable energy).

Historically, Australia's transition to electric vehicles has been hampered by challenges unique to us. We’re the sixth-largest country in the world, but the 56th most populous. We regularly travel long distances through sparsely populated areas. The scale of the necessary infrastructure is vast.

But, with an abundance of renewable energy sources and almost unprecedented access to the critical minerals needed for making renewable energy technology (like solar panels, wind turbines and batteries), Australia has the potential to create a truly green EV ecosystem. Not all nations have this opportunity to run EVs on 100% clean energy; many still rely on non-green sources. We need to embrace Australia’s unique features and harness its resources to translate good intent into real action.

Australia's position at the rear of the field sends a sharp message: We need to pick up the pace and make significant progress fast.

How consumers view EV barriers and drivers

The study reveals that the proportion of EV owners/operators in Australia (2%) is currently relatively low compared to the global average (6%) but that consumer trends in Australia are similar to those in many other nations.

Potential customers for EVs identified that the factors holding them back from shifting to an EV include:

higher purchase cost (50%)
charging duration (47%)
limited range the vehicle can travel between charges (43%)
uncertainty around battery lifetime (40%)
lack of parking spots with charging solutions (23%)

However, many are recognising the significant benefits EVs can offer. Respondents listed their top motivators as:

reducing fuel costs (73%)
the convenience of charging at home (50%)
the opportunity to lower their environmental footprint and increase sustainability (40%)

What’s next for Australia’s EV sector?

Despite Australia lagging behind, the global e-Readiness study’s projections and trends paint a picture of rapid growth, increasing demand and new opportunities.

Just in the last year, demand for EVs has increased by 121% and now make up 8.4% of all new car sales in Australia². This is expected to rise to 50% of all car sales by 2027. This means Australia will need to aim for around 1 million EVs on our roads by the end of 2027.

This presents an immense opportunity for Australia to lift its position and harness the potential economic benefits. There are exciting opportunities, particularly for the private sector, to play a role in the transformation of transport with new infrastructure and consumer offerings. But to capitalise on this phase of accelerated growth, all players will need to release the brakes and hit the accelerator.

How can the private sector rise to the e-mobility challenge?

To improve Australia’s readiness for an EV future, there are three key areas to focus on:

With increasing electrification of mobility, we will need more charging infrastructure and electricity. According to our study, it’s estimated that Australia will need more than 88,000 charging points by 2027 to meet the needs of EV owners at home and work. This is a mammoth leap from the approximately 3,000 charging points currently available in Australia – of which only 967 are high-powered public chargers².

As well as the enormous step up needed in the number of public charging stations, we will also need to ensure that the charging stations are located where consumers need them. Ideally, there should be no more than 30 minutes between charging points – and even closer in metropolitan areas – to reassure drivers. The study revealed that of those looking to purchase an EV in Australia, most would consider it acceptable to have a 400 to 500 km range and 68% prefer a charge time of less than 30 mins.

The eReadiness study confirms that the availability and convenience of charging infrastructure is crucial to increasing the uptake of EVs, and that there is strong appetite for charging at home or at work. The current lack of public chargers discourages more than a fifth of survey respondents.

The study shows that 51% of EV owners in the APAC region charge their vehicles at home, and as many as 64% purchased private charging infrastructure, which was either bundled with their vehicle or purchased separately.

Substantial capital investment and a rapid shift in the EV charging ecosystem is required imminently, to meet the needs of customers who expect charging to be easy, reliable, accessible and affordable. This presents a range of opportunities for those looking to invest, from energy providers to banks and private capital.

The issues around energy sources need to be viewed holistically. It’s not just the quantity of electricity, but how clean it is and how it is delivered to where it needs to be.

For at least 40% of those interested in purchasing an EV, a key driver was the ability of EVs to reduce environmental impacts by running on clean energy.

Australia’s renewable energy share is currently approximately 29%. This means that to realise the sustainability opportunity that EVs present, we must increase the share of clean energy in the grid and available to charging points, as well as increase customers’ access to clean energy at home – whether from the grid or self-generated.

Network service providers (NSPs) need to take action now to expand and accelerate the grid’s ability to serve EVs. Standardisation of approvals and connection processes could help. As could greater use of Battery Energy Storage Systems (BESS) - recent innovation has reduced the size of the connection required, alleviating fears of too much pressure being put on the grid.

Regardless of Australia’s position in the EV race and the challenges ahead in terms of infrastructure and renewable energy, its EV ecosystem is evolving quickly and key players are positioning for future value.

Many players will find ample opportunities to establish themselves in this rapidly evolving space - from energy providers and utilities developing new market offerings, to fuel retailers adding EV chargers to their stations, to software and hardware providers, land and asset owners, and new independent companies offering a range of products and services.

The eReadiness study shows that there are attractive customer value propositions across the sector. For example, 40% of EV owners also purchased green energy contracts, 27% installed solar panels and 25% bought energy storage solutions. Other opportunities include partnering with providers offering EV-related products and services to address customer demand, such as energy management solutions, alternative insurance options and other smart home appliances.

Fleet owners and operators have much to gain from the transition to EVs, with significant cost savings on petrol and diesel as well as reduced maintenance costs. They are also well positioned to negotiate favourable electricity packages, install their own local renewable energy generation and storage facilities, or join a ‘virtual power plant’ offered by a generation company (in which multiple customers with batteries are managed by an energy provider to supply stored energy into the grid at times of peak demand).

The future is bright, but achieving widespread consumer and commercial adoption will not be as simple as flicking a switch. Investment in education and awareness to staff, customers and stakeholders across the supply chain will be critical to a seamless transition.

Collaboration across the sector will be a key enabler

Each participant in the EV value chain has a role to play in accelerating Australia’s zero-emissions vehicle opportunity. The EV market will move rapidly with the right conditions and with collaboration and alignment across the mobility ecosystem, including government, the public, transport operators and energy providers.

Collective action will be needed to solve challenges together and avoid inefficiency. They include: matching charging infrastructure to needs, building resilient supply chains, maximising clean energy and grid capacity, and developing innovative solutions for customers (domestic and commercial) to interact with the energy network through efficient interfaces and cost-effective pricing structures.

Green lights ahead for Australia’s EV future

Although Australia ranks behind other comparable countries in terms of its adoption of EVs and the current state of charging and energy infrastructure, we can catch up. While this territory is new for us and there are challenges to overcome, we can look to global leaders to learn from their experiences and adapt their successes to our context.

If Australian businesses act with speed and seize the opportunities for collaboration, promote market innovation and push the boundaries of infrastructure, we can accelerate our journey towards affordable, accessible and reliable electric transport. Undoubtedly, the future of mobility is electric – it’s time Australia plugs in.

^{1. Department of Climate Change, Energy, the Environment and Water, Quarterly Update of Australia’s National Greenhouse Gas Inventory: March 2022}

^{2. Electric Vehicle Council, State of Electric Vehicles}

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