Accelerating SDGs with Electronic Vehicle – In Conversation with Behyad Jafari
We asked CEO of the Electric Vehicle Council Behyad Jafari on all things electric vehicle and some of the consumer behaviour challenges that exist.
Written by Victoria Kent, Senior Investment Specialist
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The electric vehicle (EV) revolution is well underway. EVs are relevant to several Sustainable Development Goals (SDGs). Whether it’s SDG 11: Sustainable Cities and Communities, SDG 12: Responsible Consumption and Production, SDG13: Climate Action or even SDG9: Industry, Innovation and Infrastructure.
There is no doubting EVs are a powerful lever in achieving the 2030 Agenda – a better and more sustainable future for all. We had the pleasure of interviewing CEO of the Electric Vehicle Council Behyad Jafari, arguably one of the best people to help us learn more about all things EV.
Behyad graciously provided his insights on a wide variety of topics, giving us privileged access to the nuances of the EV industry.
During our discussion, we talked about EV car sales trends in Australia, the fledgling second-hand EV market, Tesla’s influence, how Australia EV industry compares to the rest of the world, the collaborative way in which EV makers are working to help the Australian government take steps towards better infrastructure and investment.
We also covered hybrid vehicles, some of the sustainability criticisms being leveled against EVs, and cobalt mining. Finally, we covered some of the consumer behaviour challenges that exist (charge time and range anxiety). We hope you enjoy reading the interview as much as we enjoyed conducting it.
Q: currently, what proportion of car sales in Australia come from EVs?
In 2019, less than 1% (~0.6%) of new vehicle sales in Australia were electric. That equates to just over 6,725 electric vehicles sold.
Basically, anything that has a plug – so that's both battery electric vehicles and plugin hybrid vehicles, as long as it requires electricity for propulsion as opposed to fuel – we count that as an electric vehicle. The overwhelmingly majority of those though are full battery electric vehicles, partly hybrids are a plain minority share there.
So, even though that may seem a very low number for 2019, when compared to the year before and the year before that, there were 2,200 electric vehicles sold every year. We’ve seen a jump, which is a good thing to see.
Q: How is this trending? Do you predict next year is going to be even bigger?
During 2020, what we're finding is we're holding steady. We'll still stay around 6500-7,000 EVs sold, around the same number of sales as we achieved last year. But that's at a time when new vehicle sales will probably drop by about 20%.
Holding steady is sort of like growing this year. And then certainly, if we forward, particularly for Australia, I'd say the next couple of years is when we can – under a certain business as usual scenario – start seeing ourselves going towards the hundreds of thousands, as opposed to not even reaching tens of thousands today.
Q: How does this compare with the rest of the world?
To put it in context in 2019, EVs ranged closer to 4 or 5% percent market share in comparable nations such as UK, EU, United States, China or other developed countries with somewhat stable economies.
In Australia, we're less than 1%. There are outlying countries like Norway, that get a lot of attention, where (EV market share) is more than 50%.
What we're seeing right around the world in 2020 is countries which already had a strong suite of policies to transition their fix of electric, are using the COVID-19 crisis as their opportunity to rebuild their economies in the fashion that they want them to look moving into the future.
So, there's a whole suite of policies that have been announced in major economies to support this transition to electric vehicles. And what we're seeing now, is that based on months and quarterly sales, a lot of markets are moving up to around 10% – doubling up that percentage of electric vehicle sales.
When we talk about Australia being behind the rest of the world, if we had sold 50,000 electric vehicles (compared to the actual figure of 7000) in 2019, out of the 1.1 million new vehicles that were sold, we would have been closer to on par with the rest of the world. Then we could continue building up from there.
During 2020 in Australia, we were holding steady rather than doubling. And well, we are already quite far behind.
As is unfortunately often the case in the broader clean energy sector, it’s another case of missed opportunity.
We haven't been doing enough to date and we haven't really been doing anything in the policy space to date. Now there's an opportunity to reshape our economies and to bounce forward without continuing with business as usual here.
Q: I've heard the phrase: "build back better"…
Right – ‘back’ being the deliberative word.
Q: Are we geographically hamstrung as Australia? Government support through reductions on vehicle registration, subsidies, infrastructure etc. is thought to be crucial in enabling the uptake of EVs. In Australia, it appears our government hasn't done much relative to other countries in the world. Is this the case? And if so, will EVs never become mainstream until the government does more?
In terms of vehicles, that’s a resounding no.
There is sometimes a sentiment that suggests because we're a large country, there must be an issue there. It doesn't play out particularly well because people actually drive shorter distances than in places like the EU – so that’s not the problem.
I think some of the biggest issues are really around the price of electric vehicles. And that's where we particularly fail in Australia. Cheaper electric vehicles are plentiful in other, right-hand drive countries like the UK, Japan and other markets.
But those models are bought to those markets by companies because their governments have policies in place requiring them to be sold there. We don't have any of those things here, and you have to appreciate for an automotive company – an electric vehicle has a lower profit margin attached.
But the difference in that profit margin is that it goes to society more broadly by cleaning our air and reducing emissions. The car company doesn't make any money out of that.
We have a growing industry here, and we do have some models of those vehicles by forward-thinking car companies. But right around the world, there are policies that require efficiency in their transport fleet and that doesn't exist in Australia.
This sort of gives the market a free pass to say the cars that will make you the most amount of money are the ones that are the least efficient, because you don't have to add any technology or cost into the vehicle to make it more efficient.
Q: Is that a big part of what you do? Lobbying the government to do more to help manufactures as well as consumers?
Yeah, I would say our work is probably split up into thirds. One-third is policy development and advocacy to governments. Another third is industry coordination work.
By virtue of (EVs) being a convergence technology, there's a lot of helping the automotive company or transport companies and energy companies and infrastructure companies work together to provide solutions and products.
I think in any market, it's a partnership between governments and industries to support this transition to electric vehicles.
Whereas in Australia, it's entirely being driven by the industry by itself. What can we do in the absence of government support to help propel this change?
The last third of our work is what we call market facilitation – working with some consumers around electrifying fleets to support them in that transition.
Q: EV growth is fuelled by lithium, cobalt, nickel and rare earth. China's appears to be doing quite a good job of looking up some of those supplies. How is Australia positioned for the upside of growth in this?
It's been fascinating because we have the age-old problem of it's on Australia's plate to do better, because we're mostly playing our usual role of digging up things, sending it to people overseas to evaluate it but not doing things like refining and processing, let alone manufacturing batteries here.
it's been interesting because gradually over the years, what we've seen is investors willing to discuss or even increasingly willing to price in some level of premium for diversification of not having supply exclusively from one location, particularly from China. So, providing some opportunity there for a bit more of that development to occur in Australia.
Again, it goes back to some of these policy issues for us because there are plenty of other actors within the region who see that opportunity and say: ‘well maybe we'll buy Australian lithium and we'll be the half of battery manufacturing’.
We have that natural competitive advantage because the supply chain starts with us. The question really becomes: do we capitalize on it and try to become the centre of value add as well?
I think for us in Australia, like with many things, it's a matter of choosing to compete and then being willing to compete at the same level as other countries around the world. And too often when it comes to new industry development, I think we do a pretty poor job in Australia of investing and capitalizing on those opportunities.
We've spent a lot more time and effort trying to protect the jobs that we've got, rather than trying to create the new jobs emerging from the EV economy.
Q: Can you share some Aussie companies shining on the global stage in this space?
Yeah, there're a few there. There's the company our Chair runs called JET Charge – they do installations and networks of charging infrastructure, and some of the backend around the integration of that infrastructure. Most of their business is in Australia, but they sell that product around the world as well.
Another is Reposit Power down in Victoria – they are working on solutions around battery repurposing before recycling, using electric vehicle batteries for second use applications. Reposit have deals in place now with Nissan, globally as well as the technology partner for one of the world's largest original equipment manufacturer (OEM).
We also have electric bus manufacturers here, and companies doing really cool things around how to make charging more convenient – just plugging the car in wherever you may be.
It overcomes the concerns of ‘where do I charge it?’ or ‘I have to go to a petrol station to refuel’. The answer increasingly is: ’you charge your car wherever you are’. The charging comes to you, you don't go to the charger because we have electricity everywhere.
We’re one of a handful of countries working on where the power comes from. For example, stored in the battery of the vehicle, gets charged back into a building and then it's sold back into the electricity grid in order to make money back for electric vehicle consumers.
Frequency control services are another area of interest – where you're using very little energy out of your battery. But because you're selling something called frequency control, it's very valuable.
It’s not like you're discharging your entire battery, you're helping level out the electricity system, making the system more secure and reliable – and you get paid for it. It's a neat way to continue making money out of your vehicle.
While it’s normally sitting there doing nothing 96% of the time, now it's creating value instead.
Q: Is that happening right now or is that an idea?
Some vehicles are capable of doing it, are monetising it and turning it into products. Those projects are happening in the US, UK and here in Canberra. We're one of the few places in the world developing it.
What's we’re working on solving now is how do we make it so the customer doesn't have to do anything? We do all this on the backend for them and all they’re concerned with is: ‘I charge my car for free, or I got paid to charge my car today’.
Q: Kind of like having solar panels on your roof and getting $0 bills?
Yeah, you don't have to think about whether or not to discharge or sell back to the grid right now etc – it’s about we can automate that part for them.