NSW EV policy announced

[GrimRe]

Considering how lumpy Model 3 deliveries are you may end up seeing 30% of new car sales being EV if you cherry picked a certain week of the year. There are <1,000 deliveries in total in NSW per week. Say Tesla end up having 3 delivery locations, each pumping out 100 per week that's 30% right there.

 

[Vostok]

Considering how lumpy Model 3 deliveries are you may end up seeing 30% of new car sales being EV if you cherry picked a certain week of the year. There are <1,000 deliveries in total in NSW per week. Say Tesla end up having 3 delivery locations, each pumping out 100 per week that's 30% right there.

I think that’s very unlikely.

Over the past 12 months in NSW there has been an average of 40,830 new vehicle registrations per quarter. I expect the vast majority of those are new vehicles, not registration of interstate transfers, or re-registration of registration-lapsed vehicles.

I also doubt the 30% metric would be done on anything less than a quarter basis, and possibly on a 6- or 12-month basis.

Over the past 2 years, Tesla has held ~60% of NSW BEV market share. So for BEVs to be 30% of all new car sales, NSW would need around 7350 Teslas, or 12,250 BEVs delivered in a quarter based on current numbers. The most Teslas ever delivered in NSW in a quarter is 603 - which was in the most recent quarter.

So this issue shouldn’t materialise until Tesla is shipping more than ten times the number of cars it is currently shipping to Australia. That will be a nice problem to have.

 

[Shock-On-T]

People in the country already pay more tax because of the distances involved - they use fuel to travel and the fuel comes with fuel excise.

I’d speculate that the feds don’t want to give up fuel excise because it is such a money spinner for them and it is not easy to cheat on. The money goes into general revenue, the roads stuff is just a red herring.

To impose a federal mileage tax, would *I think*, need agreement from all the states (remembering back to the introduction of the GST).

At the moment the states look like structuring it as a fee within their own remit. So they are going to be able to extract tax for themselves that the feds can’t touch (think redistribution of GST). For the populous states this will be a really significant amount of income.

If the states agreed to a federal mileage tax then they would be giving all that away. So I can’t see that happening, despite the clear advantages in terms of uniformity and justice.

The feds are certainly watching on in horror and will be thinking of ways to change the way the federal taxes are distributed back to the states.

Interesting if you live in Albury and work in Wodonga. I suppose NSW would get all the money from your daily commute.
that would be in contrast to the federal fuel excise which ignores state border.
would be an even bigger issue for trucking, for example trucks based in Brisbane doing the Brisbane to Sydney to Melbourne to Adelaide to Brisbane run. Queensland would get all the money.

 

[Hairyman]

Interesting if you live in Albury and work in Wodonga. I suppose NSW would get all the money from your daily commute.
that would be in contrast to the federal fuel excise which ignores state border.
would be an even bigger issue for trucking, for example trucks based in Brisbane doing the Brisbane to Sydney to Melbourne to Adelaide to Brisbane run. Queensland would get all the money.

Yes, it is one of the messy things about the road user charge being at state tax. It will make for some arbitrage opportunities for the trucking companies. Lots of details still to be hammered out as time goes on.

 

[GrimRe]

I think that’s very unlikely.

Over the past 12 months in NSW there has been an average of 40,830 new vehicle registrations per quarter. I expect the vast majority of those are new vehicles, not registration of interstate transfers, or re-registration of registration-lapsed vehicles.

I also doubt the 30% metric would be done on anything less than a quarter basis, and possibly on a 6- or 12-month basis.

Over the past 2 years, Tesla has held ~60% of NSW BEV market share. So for BEVs to be 30% of all new car sales, NSW would need around 7350 Teslas, or 12,250 BEVs delivered in a quarter based on current numbers. The most Teslas ever delivered in NSW in a quarter is 603 - which was in the most recent quarter.

So this issue shouldn’t materialise until Tesla is shipping more than ten times the number of cars it is currently shipping to Australia. That will be a nice problem to have.

That’s only 4 qtrs of growth at current trajectory. Could easily see 5k reg of EV per quarter by 2023

 

[Vostok]

That’s only 4 qtrs of growth at current trajectory. Could easily see 5k reg of EV per quarter by 2023

How do you figure that?

Over the past 24 months, the total number of Teslas (or BEVs overall) in NSW has a CAGR of 80%. If that rate continued every year forward, it would take until Sep-Dec 2025 before Tesla was delivering over 7.5k cars into NSW, or for 12.5k BEVs overall, in a quarter. And that's assuming other new car sales grow at historical rates.

So at least four more years, not one, to hit 30%. Although that would still mean beating the 2027 backstop date. I suspect a lot of people who know nothing about BEVs would laugh at the notion that 30% of all new car sales in NSW could be BEV by 2027, let alone 2025. They would think that is ridiculous and will never happen.

 

[GrimRe]

How do you figure that?

Over the past 24 months, the total number of Teslas (or BEVs overall) in NSW has a CAGR of 80%. If that rate continued every year forward, it would take until Sep-Dec 2025 before Tesla was delivering over 7.5k cars into NSW, or for 12.5k BEVs overall, in a quarter. And that's assuming other new car sales grow at historical rates.

So at least four more years, not one, to hit 30%. Although that would still mean beating the 2027 backstop date. I suspect a lot of people who know nothing about BEVs would laugh at the notion that 30% of all new car sales in NSW could be BEV by 2027, let alone 2025. They would think that is ridiculous and will never happen.

My maths has slightly different underlying assumptions:
Aus Tesla reg's 2018: 1,000
Aus Tesla reg's 2021: 10,000

CAGR: 115%

Assuming Model Y launches next year I don't see that CAGR decreasing. Combined with other manufacturers, 50k reg's seems plausible for CY 2023.

50k divided by 4 quarters is 12.5k and 40% in NSW = 5k EV per quarter run rate being possible by start of 2023. If you assume decline emission vehicles it seems plausible to me that if you take the most aggressive way of calculating EV market share, you could arrive at a conclusion of a run-rate of 5k reg's per month of EV in NSW ~ 30% of new vehicles being EV.

 

[Vostok]

My maths has slightly different underlying assumptions

We can split the difference and call it 2024 . Still, if NSW hits 30% EVs anywhere between 2023 and 2025 I think that is rather incredible.

A lot is riding on Model Y and also whether this policy changes how the big manufacturers view Australia. Is it becoming a more attractive EV market where some individual States are starting to push some EV buttons? Or does it remain a market hostile to EVs due to barely disguised Federal Government contempt?

To hit 30% by 2023 would require these other manufacturers to be already working on getting their wider array of models in RHD form (and at lower price points) into our market. I don’t know if that’s the case.

 

[GrimRe]

We can split the difference and call it 2024 . Still, if NSW hits 30% EVs anywhere between 2023 and 2025 I think that is rather incredible.

A lot is riding on Model Y and also whether this policy changes how the big manufacturers view Australia. Is it becoming a more attractive EV market where some individual States are starting to push some EV buttons? Or does it remain a market hostile to EVs due to barely disguised Federal Government contempt?

To hit 30% by 2023 would require these other manufacturers to be already working on getting their wider array of models in RHD form (and at lower price points) into our market. I don’t know if that’s the case.

Haha yes you are right -- even 2024 would be astounding.

What I'm saying however isn't so much that by any reasonable measure 30% of new car reg's are EV. I'm saying that the NSW Government may elect to use the most aggressive yardstick possible to measure it (for example, take any 30-day trailing period having >30% new car reg's = EV) in order to introduce the RUC as early as possible.

 

[Vostok]

What I'm saying however isn't so much that by any reasonable measure 30% of new car reg's are EV. I'm saying that the NSW Government may elect to use the most aggressive yardstick possible to measure it (for example, take any 30-day trailing period having >30% new car reg's = EV) in order to introduce the RUC as early as possible.

We’ll find out soon enough how this measure will be done - it will need to be specified in the relevant Regulation that defines the application of stamp duty to vehicles. The scheme is due to start in September.

But note they’ve actually been reasonably smart about this. EVs purchased prior to 1 September 2021 (or those above $78k after) are not subject to the RUC because those vehicles have paid, or will pay, stamp duty. The Government has their pound of flesh, and you are RUC exempt.

And once the 30% threshold (however it is defined) is hit, then stamp duty is abolished on all EVs, and instead all are subject to the RUC. This is prospective only - if stamp duty was paid on a vehicle upon purchase in the past, then it won’t be subject to the RUC.

And my understanding is that if someone sells an old EV after this point, stamp duty will not be payable upon transfer (as it is with all other second hand vehicle sales in NSW), and the vehicle will then be subject to the RUC by the new owner. That means there will no longer be any benefit in lying about the true sales price in the transfer documentation, it will make no difference.

 

[Nobody Famous]

The achievement of the 30% of new sales surely will be helped along by the likes of BYD's $35,000 Dolphin (EA1) and it's similarly priced competitors.

 

[Hairyman]

Agree. The next 18 months will be good for the broadening of the market.

 

[Shock-On-T]

So technically a Victorian with a NSW Garage Address might be better off Registering the Car there now..

A bit like how when I bought my car in Sydney I toyed with the idea of getting an ACT address to save about $10000.

 

[Shock-On-T]

Yes, new and used. Stamp Duty Exemption
From the above link:
“No stamp duty will be payable on eligible new and used EVs purchased for under $78,000 (incl GST) in NSW.”
So that would include second hand purchase of early Model S.

One more reason our cars seem to refuse to depreciate.

 

[GrimRe]

A bit like how when I bought my car in Sydney I toyed with the idea of getting an ACT address to save about $10000.

You mean $1,000 right not $10k?

 

[Shock-On-T]

You mean $1,000 right not $10k?

At the time the saving was around $10k. Talking about MS not M3.
Even today the MS is $7-$10k cheaper in ACT.