Even with the fastest supercomputer in the world, capable of 1.1 quintillion calculations per second, it has always seemed to me that macroeconomics is not an exact science. Governments pull levers and sit back and see what happens. I hope that governments do extensive modelling before those levers are pulled but results are not really known until it hits the real world.
In terms of Plug-In Electric Vehicle (PEV) car sales around the world, I am sure economics students in decades to come will study the various levers that were pulled to change the landscape. Norway still leads the world with 86.2 per cent of all new cars last year being PEVs. Sweden is at 45 per cent. Netherlands hit 29.8 per cent. Germany, home of the second, third and sixth largest car manufacturers, has hit 26 per cent. China, although only at 15 per cent of new car sales, has the highest number of PEV sales at 7.84 million cars last year. Australia, with only 20,665 sales, sits at only 1.95 per cent.
Why are some countries so far ahead?
The incentive programs vary dramatically. In some countries, PEVs are allowed to drive in the bus lanes. That makes the commute time better in a large city. Other places give PEVs special parking privileges or the charging stations, reserved for PEVs only, are in very convenient locations. Free charging is another great incentive. As you can see, encouragement can be offered at minimal expense. Just by virtue of the incentive, people start to consider the option.
There are also financial incentives. Some countries remove registration and/or stamp duty. Others might remove the VAT or GST or give tax breaks. Other countries have used the stick rather than the carrot approach. Norway is banning the sale of internal combustion engine vehicles (ICEV) by 2025. Singapore is 2025 for diesel and 2030 for petrol. Belgium: 2026; Germany; Greece; Iceland; Sweden and many more from 2030 on.
Dozens of countries also offer cash incentives that vary from a few thousand dollars to over ten thousand. In countries where market penetration has reached a relatively mature level, the cash incentives are being scaled back or removed altogether.
I have been a PHEV driver since 2012; a PEV driver since 2015 and back in the early days I bought my first hybrid in 2005. I have been preaching the future of PEVs to many of my colleagues but my advocacy has fallen on deaf ears – until now. A combination of federal and state initiatives has pulled enough levers to get to the point where people are now asking me about PEVs.
The new Federal Government has announced an exemption on Fringe Benefits Tax (FBT) from 1 July this year provided the PEV is below the Luxury Car Tax (LCT) threshold which is $84,916. The estimation from the government is that this can save up to $9,000 per year for an employer. The NSW State Government also offers a reimbursement of the stamp duty paid on the purchase of a new PEV provided the cost is below $78,000. That could reduce the purchase price by up to $3,000. That same government also offers a $3,000 cash rebate on your PEV purchase provided it is below $68,750. When you factor in the current price of fuel and the reduced maintenance costs of a PEV, the cost equation starts to make more sense.
It is an early prediction, but I am going to call it. 2023 will be the year of the PEV!
Tell me what it would take for you to purchase a PEV at firstname.lastname@example.org