Australians spent $42.5 billion on fuel last year

[Shock-On-T]

Call me mad, but I've spent part of my Saturday night doing a Cost Benefit Analysis for EVs in Australia

All statistics are for 12 months ending 30/06/2016 and come from this report:
9208.0 - Survey of Motor Vehicle Use, Australia, 12 months ended 30 June 2016

I was inspired by a chat I was having with @raynewman about just making charging free and universal. It occurred to me that if you step back far enough and look at the nation as a whole, we should be rushing to EV adoption as quickly as possible.

In Australia we drive about 250 billion km annually, burning a staggering 32,732 megalitres of fuel at a total cost of $42.5 billion.

If we were all driving modern EVs (Hyundai Ionic, Model 3) we'd be using 38,424 gWh of electricity, a cost of $11.1 billion.

This would save $31.4 billion per year, every year.

With this kind of saving incentive at stake for the nation, the government should be heavily incentivising the move to EVs. Instead, in Australia we have essentially:

• no incentives
• no tax breaks
• no reduction in stamp duty (except ACT)
• a very minor reduction in the absurd Luxury Car Tax
• almost zero government-funded charging infrastructure
• no national charging standard
• no emissions based road tax to nudge towards efficiency

We are left to park in showgrounds, rely on corporate largess, wait upon the whim of Tesla and other makers to roll out their own silo infrastructure.

This is leaving aside the countless other benefits (both tangible and intangible) of moving to EVs:

• Reduced noise pollution
• Reduced health costs associated with burning fuel where people live
• No need to run expensive air cleaning in tunnels, underground car parks etc
• Domestic generators rather than foreign oil
• An improved grid
• Reduced servicing, refueling time

We need our governments to take charge and actually do the right thing on this.

 

[WA-T3sla]

The government is probably more interested in the $13 billion per year in fuel taxes it stands to lose by encouraging the shift away from fuel.

 

[Blue heaven]

The government is probably more interested in the $13 billion per year in fuel taxes it stands to lose by encouraging the shift away from fuel.

Sadly you are spot on, short term gain wins over long term planning. I'd be happy to pay a kilometre tax to cover the loss of fuel tax, the cost of driving X distance will still be far lower.

 

[raynewman]

I spend something less than $1,000 on electricity each year (separate meter) but the big saving is the almost total lack of servicing.
My last car was a Merc and they really enjoyed seeing me coming. Currently traveling over 25,000 km per year.

 

[strykeroz]

We need our governments to take charge and actually do the right thing on this.

I've not heard anything of this kind of analysis nor plan from candidates wearing any team colour so far. You have my interest, and tentatively, my vote sir.

 

[raynewman]

I've not heard anything of this kind of analysis nor plan from candidates wearing any team colour so far. You have my interest, and tentatively, my vote sir.

+1 for me. That's two - anyone else?

 

[Mark E]

I looked at the report (briefly) but can't see where the $42B figure came from - did you calculate it or was it part that I missed?
Is that number the amount spent by consumers? If so we need to factor in the tax revenue that comes from it before you'd get any response from any government - but there should be a good argument about balance of trade figures etc, as well as lowering the cost of doing business etc.

I'd expect that the loss of the excise revenue will mean changes to other charges somewhere - they won't let that go.

 

[Blue heaven]

+1 for me. That's two - anyone else?

+1 from me to ShockOnT of the Common sense party, keeping in mind that Senator Malcolm Roberts received 77 first preference votes you'll be a shoe-in.

 

[stphw]

To counter the loss of tax revenue argument, my understanding is most fuel is imported adding to trade deficit. Also presents a security issue as we dependant on other countries to keep sending us fuel.

You'd have my vote too.

 

[Shock-On-T]

I looked at the report (briefly) but can't see where the $42B figure came from - did you calculate it or was it part that I missed?
Is that number the amount spent by consumers? If so we need to factor in the tax revenue that comes from it before you'd get any response from any government - but there should be a good argument about balance of trade figures etc, as well as lowering the cost of doing business etc.

I'd expect that the loss of the excise revenue will mean changes to other charges somewhere - they won't let that go.

Calculated using average price of $1.30 per litre.
Fuel Price Data

Electricity price used was 0.29/kWh to be conservative. I do all my charging at about 0.10/kWh.

 

[Mark E]

Calculated using average price of $1.30 per litre.
Fuel Price Data

Electricity price used was 0.29/kWh to be conservative. I do all my charging at about 0.10/kWh.

Yep, that's what I thought - with the excise at 40c of that - hence the $12B hit to fed revenues.
We'd still be way ahead though with $30B or so being spent on other things in the economy and reducing transport costs making us more competitive, not to mention improving our balance of trade and not funding more oil wars.

 

[Shock-On-T]

Yep, that's what I thought - with the excise at 40c of that - hence the $12B hit to fed revenues.
We'd still be way ahead though with $30B or so being spent on other things in the economy and reducing transport costs making us more competitive, not to mention improving our balance of trade and not funding more oil wars.

Exactly.
It's fine to pay $12B in tax, but the same motorists are also paying $30B to foreign oil. Imagine that money being spent on the grid.

 

[WilburGreen]

Before you want to pay some of the tax. Remember that these taxes are funnelled back to paying for fossil fuel. The taxes are use for a diesel rebate for the miners and farmers. The companies then get tax deductions for the exploration for gas, oil and coal. Then get more tax advantages for building the mines and plants.
So its all a big round about that consumers fund the the companies to pump more oil.

 

[LimoX]

Call me mad, but I've spent part of my Saturday night doing a Cost Benefit Analysis for EVs in Australia

All statistics are for 12 months ending 30/06/2016 and come from this report:
9208.0 - Survey of Motor Vehicle Use, Australia, 12 months ended 30 June 2016

I was inspired by a chat I was having with @raynewman about just making charging free and universal. It occurred to me that if you step back far enough and look at the nation as a whole, we should be rushing to EV adoption as quickly as possible.

In Australia we drive about 250 billion km annually, burning a staggering 32,732 megalitres of fuel at a total cost of $42.5 billion.

If we were all driving modern EVs (Hyundai Ionic, Model 3) we'd be using 38,424 gWh of electricity, a cost of $11.1 billion.

This would save $31.4 billion per year, every year.

With this kind of saving incentive at stake for the nation, the government should be heavily incentivising the move to EVs. Instead, in Australia we have essentially:

• no incentives
• no tax breaks
• no reduction in stamp duty (except ACT)
• a very minor reduction in the absurd Luxury Car Tax
• almost zero government-funded charging infrastructure
• no national charging standard
• no emissions based road tax to nudge towards efficiency

We are left to park in showgrounds, rely on corporate largess, wait upon the whim of Tesla and other makers to roll out their own silo infrastructure.

This is leaving aside the countless other benefits (both tangible and intangible) of moving to EVs:

• Reduced noise pollution
• Reduced health costs associated with burning fuel where people live
• No need to run expensive air cleaning in tunnels, underground car parks etc
• Domestic generators rather than foreign oil
• An improved grid
• Reduced servicing, refueling time

We need our governments to take charge and actually do the right thing on this.

The biggest problem is the loss of tax revenue to the Govt.

May I use your post in conversation with a senior exec I'm picking up from the Clean Energy Commission tomorrow ?

 

[Shock-On-T]

The biggest problem is the loss of tax revenue to the Govt.

May I use your post in conversation with a senior exec I'm picking up from the Clean Energy Commission tomorrow ?

Please do.
Also note the other comments on tax revenue. The lost revenue should be offset by reduced subsidy the government pays to the oil industry. The difference can be gathered either through increased road tax, a distance tax, many other ways.
Or you could work out what an asthmatic child costs medicare then work backwards from there...

 

[LimoX]

Please do.
Also note the other comments on tax revenue. The lost revenue should be offset by reduced subsidy the government pays to the oil industry. The difference can be gathered either through increased road tax, a distance tax, many other ways.
Or you could work out what an asthmatic child costs medicare then work backwards from there...

Thanks, I'll keep you informed how I go. I'm pitching that seeing that Govt seems unwilling to provide cash/ tax incentives for early EV take-up then they should consider "zero-emission pathways" allowing EV's full access to bus and transit lanes.

Yes the tax loss can EASILY be sorted when all cars will have full telemetry allowing road authorities to implement user-pays collection models.

 

[Chuq]

I've used a similar argument specific to Tasmania. $1.05 billion spent on petrol/diesel each year, all of it imported.

Electricity would cost about 1/3rd as much. So 2/3rds of that money goes back into the pockets of Tasmanian residents and businesses.

But Tasmania has some other differences that make it an even better proposition.

• The Tasmanian primary electricity generator, transmission/distribution company and residential retailer are all state government owned. So the remaining 1/3 which is "spent" remains in the state, and half of the annual profits of these companies go directly back to the state treasury.
• Of course, you also have the size of the state, and the fact that it is an island - making a DC fast charging network with 100% coverage very easy to do.
• You can add the fact that we have poor public transport, meaning that we are one of the most car-dependent jurisdictions in the country. Fully autonomous vehicles on the horizon will make transport even more accessible to areas without the population to support regular services.
• And of course, apart from the gas power station which is kept around as a backup, all the electricity generated here is renewable. The arguments about replacing oil with coal don't exist.

Open and shut case, don't you think?

 

[WhiteStar]

Open and shut case, don't you think?

Yes unless your government is beholden to right wing extremists...in which case it's all just green ideology.

 

[Chuq]

Yes unless your government is beholden to right wing extremists...in which case it's all just green ideology.

Forgot to mention that - our state Liberal government likes renewable energy! (As do the Greens and ALP state parties, of course)

 

[strykeroz]

Yes unless your government is beholden to right wing extremists...in which case it's all just green ideology.

Agreed. LNP locally are going to make our next state election all about power prices, which unfortunately means they're going to try to push coal harder than the current mob, claiming somehow that our high power prices are somehow linked to renewables, that we don't have hardly any of yet. I really hoped they'd be better at maths than this.