Holding value

22 JUNE 2023

The Federal Government has plans to decarbonise the Australian vehicle fleet, starting with cars and light vans. 

The Albanese Government’s National Electric Vehicle (EV) Strategy aims to ‘increase the uptake of EVs to reduce our emissions and improve the wellbeing of Australians’.

So, what does that actually mean?

Well, the strategy outlines three key objectives: increase the supply of affordable and accessible EVs; establish the resources, systems and infrastructure to enable rapid EV uptake; encourage EV demand.

Drilling down further, initiatives focus on expanding EV availability and choice, reducing road transport emissions, increasing local manufacturing and recycling, and reducing the cost to Australians of running their vehicles.

The discussion paper proposes several models that effectively reduce the range of cars that arrive here, based on their individual or combined Co2 emissions. 

For example, vehicle manufacturers might import a range of conventional, low or zero Co2 emission vehicles – as long as the net Co2 emission from their brand reduces over time. 

We don’t know how quickly or steep the Co2 reduction curve will be, but it’s likely to become clearer towards the end of this year.

If we use COVID-19 conditions as an indicator of what happens when vehicle supply reduces, it’s reasonable to suggest good quality used cars will continue to hold their value as we transition to a low or zero emission fleet. 

While many of us like to think our next car will be electric, we may just hang onto our existing internal combustion engine vehicles longer – until battery range, charging stations and EV price points look more attractive. The government has some grand plans, but time will tell.