You are here

Treasurer – Electric Vehicles

Dr Rosalie Woodruff MP

Dr Rosalie Woodruff MP  -  Tuesday, 7 June 2022

Tags: Treasury, Electric Vehicles

Dr WOODRUFF - Treasurer, the Government made a commitment last year to convert the fleet of government vehicles to 100 per cent electric by 2030. This year's Budget papers show the target for that conversion to be 50 vehicles in 2021-22, with only 13 vehicles changed over for electric vehicles in the previous financial year. Excepting that the 2021-22 financial year is not quite over, how close is your Government to achieving the target of electrifying 50 vehicles for that year?

Mr FERGUSON - Thank you, Dr Woodruff. I gave some quick headline data on this, this morning, but I have information here that I will share with you. The Government's light vehicle fleet as at 31 March was 2599 vehicles. The light vehicle fleet includes 448 low-emission vehicles comprised of 421 hybrids, 13 plug-in hybrids and 14 fully electric vehicles. As at 31 March there has been a 65 per cent reduction in the number of six-cylinder vehicles in use since 2015 and 81 per cent of the Government's light motor vehicle fleet are now four-cylinder. That excludes fully electric and plug-in hybrid electrics.

To the actual numbers that you specifically asked about in the year change.

Dr WOODRUFF - 2021-22.

Mr FERGUSON - We are still a month off that. The data I have is to 31 March. The only extra information I can provide to what I was reading out before does not indicate what the change is from last July. I do not seem to have that, but I can tell you there are a further seven battery-electric vehicles, eight plug-in hybrids and 262 hybrids currently on order as at 31 March. This gives an indication of appetite.

Dr WOODRUFF - Seven, eight, and what?

Mr FERGUSON - Seven battery-electric, eight plug-in hybrids and 262 hybrids currently on order as at 31 March. Some of those will have arrived. There is a fair wait on new cars. Does that information meet what you were asking?

Dr WOODRUFF - Can I take that on notice? That is not the actual figure of the new cars for that year, they are the ones in the future.

Mr FERGUSON - Well they're ordered and you can't get them until they're available. I have last year's data if you're interested.

Dr WOODRUFF - Is that 2020-21?

Mr FERGUSON - But from last year. This will be full year because the budget was in August so I have to 30 June of last year. The light vehicle fleet included at 30 June, 307 low-emissions vehicles made up of 294 hybrids, eight plug-in hybrids, and five electric vehicles.

Dr WOODRUFF - Okay. Can I take on notice the actual number that had been added to the fleet in the 2021-22 year?

Mr FERGUSON - I'm happy to do that, even though we're not at the end of the year.

Dr WOODRUFF - Can you take it just for the 11 months?

Mr FERGUSON - I'll do what I can with the question on notice.

Dr WOODRUFF - Thanks. The target for 2022-23 is 50 vehicles and the budget papers suggest that the government fleet is around 2500. You've just told us it's 2599. That means that the target you've set is approximately 2 per cent of the fleet, and next year's target is 3 per cent of the fleet. To meet your own target of 100 per cent electric by 2030, electrification of the fleet would need to increase by approximately 13.5 per cent each year after the next financial year, or an additional 330 vehicles per year. You don't seem to be approaching that figure at the moment.

Mr FERGUSON - I'll just ask the secretary. In last year's budget we provided extra funding to be used over three years to support that transition because these vehicles are more expensive. In this Budget in front of us commits a further $2.25 million over three years. That means we have had a total of $4.5 million for the initiative since 2020. I'm certainly comfortable with asking the secretary to go in deeper in terms of the turnover that would be required to meet that future objective but I'll quickly add that I would imagine that as more manufacturers are adding more options to the marketplace, we'll be in a better position to meet our target each year that goes by.

Mr FERRALL - The Treasurer's correct. There have been challenges to date in terms of basically vehicle supply but that will improve as we go forward. As to your question about how rapidly the step-up may need to be as you go forward, I think you've got to keep in mind that the vehicle fleet effectively gets replaced every two to three years, depending on how it rolls over, so in the period between now and 2030, the fleet broadly will have at least two complete rollovers. As you see those rollovers you'll see those moves up more rapidly because we'll be able to get supply, which is very difficult at the moment, but you'll see significant components of the fleet rolling off going forward, so you'll see a curve going upwards more steeply as opposed just a steady 50 per year.

Dr WOODRUFF - Treasurer, you don't seem to have budgeted for that in the forward Estimates. It's a flat figure. I don't see increasing numbers there. They should be straight numbers that any actuary could do for the forward Estimates leading up to 2030. You should know now how much to put into the next four years and I don't see that in the Budget.

Mr FERRALL - Are you talking in terms of dollar value?

Dr WOODRUFF - Yes, the financial commitment to make the switchover. Also, is it all just for hybrids, not pure electrics?

Mr FERRALL - In all likelihood, as we go forward the battery-electric vehicles will not be as expensive as they currently are. That is the position the Government has taken going forward on this. We're managing the fleet costs going forward.

Dr WOODRUFF - Are we waiting, then?

Mr FERRALL - No, we're not waiting, we're genuinely struggling to get the vehicles and we're not alone in that situation. In terms of whether you need to see a rapid increase in costs going forward, more battery-electric or electric vehicles in the longer term should lead to the equivalent of a lower cost, because you'd expect those vehicles to become lower in cost as the volumes increase in the market.

Dr WOODRUFF - Most Tasmanians can't afford to a new electric car, or certainly not at the moment, but many more could afford to buy a second-hand electric car. It's really incumbent on the Government to be leading with the fleet to generate the supply of electric vehicles so other people can choose electrics. Can you please tell me why you're choosing to buy so many hybrids and whether you're going to continue to do that, because those are obviously are still a fossil fuel option? Also, what is your time frame for switching from hybrids to full electric vehicles or FEVs?

Mr FERGUSON - I think it is the very word you used, which is transition. This is part of our climate-friendly policy. The Government does not quarrel with the science on this. We are accepting that we want to emit less CO2. Tasmania has a very good story to tell here. We should be proud of what Tasmania has achieved. If the rest of the world were like Tasmania, we would not be having Copenhagen and confabs on climate change policy, because the world would be more or less net zero already. We're not there, so Tassie is prepared to play a role, and the role of government is exactly as you have outlined, which is to transition the Tasmanian government fleet to electric vehicles by 2030. The very point you made to people watching or reading this is that this means it will be future seeding of the secondhand car market to allow a greater uptake over time. It really is your very point about transition. The hybrids, while still fossil fuel powered, nonetheless consume less and I could speak if you want me to about the fuel reduction and fuel consumption.

Dr WOODRUFF - No, I think that's probably for another conversation over a wine.

Mr FERGUSON - Indeed, but I'm saying that I could do that, because we are consuming less fuel as a result. The gold standard for us is to get to a situation where more Tasmanians who are not government employees using government vehicles will feel comfortable considering electric vehicles because, for example, there is charging infrastructure, there are taxation arrangements that are fair to all concerned, including a coming road user charge, which I have to mention needs to happen. The Government has taken a lead role in generating demand for EVs to come into the state and then eventually offering them to the second-hand market.

Dr WOODRUFF - Thank you, Chair. Back to electric vehicles. The Budget papers have figures of what are the actual amounts for the electric vehicle fleet, with 13 in last year's financial year; 50 in the current in the current year that we're just about to finish; and the estimated 75 next year. The notes in the Budget papers say that electric vehicles includes battery electric vehicles, plug-in hydrogen and hydrogen fuel cell vehicles. It does not include non-plug in hybrid vehicles. The figures that you gave for the vehicles on order have five per cent, I calculate, EVs and PHEVs, plug-in electrics. The rest are hybrids. Can you confirm that the hybrids are plug-in hybrids? Is that what you mean?

Mr FERRALL - I've just been advised that the way I've expressed previously is correct. Where I use the word 'hybrid', but don't refer to plug-in or non-plug-in, they are not plug-in hybrids. Your understanding is correct. That is what I intended when I earlier answered that question. When I refer to plug-in hybrids, they are as distinct from 'hybrids'. You're quite right to point that the bigger number are non-plug-in hybrids. That's a correct observation.

Dr WOODRUFF - They're not actually what the Budget papers classify as electric vehicles.

Mr FEGUSON - And nor do I. I don't classify them as…

Dr WOODRUFF - What we have, then, is far less than 5 per cent on order are what the Budget papers classify as electric vehicles; only 15 vehicles.

Mr FERGUSON - I'm agreeing with you. They are not what I would call electric vehicles and they certainly wouldn't meet the test for the duty concession that we have available for consumers out there. I'm agreeing with you, even if it's implied criticism that there's a long way to go. That's why we've provided the extra funding to stimulate that, and ensure that the vehicle choices support moving progressively to EV. No one is saying that it should happen rapidly or suddenly; although you might be.

Dr WOODRUFF - We are, the planet is, the scientists are.

Mr FERGUSON - We are looking at it as a transition and an expensive one in the short term. It's my genuine belief and hope that with the passage of time those EVs will mainstream in terms of their pricing structures and be more competitive anyway, as the technology improves all the time.

Dr WOODRUFF - Thanks for confirming that. Can you tell us whether you stand by your commitment of 100 per cent electric vehicles by 2030, none of which would be hybrids? They would only be electric vehicles or PHEVs or plug-in hybrids - not the non-plug ins.

Mr FERRALL - Yes, the commitment stands.

Dr WOODRUFF - Sorry, I should have rephrased it. Do you stand by the fact that you will achieve that?

Mr FERRALL - It should be achievable. There's no doubt it will be challenging, but it should be achievable. The point I would make in the comment you made earlier, one of the reasons that we've effectively got a big increase in hybrid vehicles is because they are available and the electric ones aren't to the same degree. The alternative to the hybrid would be a diesel or a petrol-powered vehicle in the current market.

We are working pretty hard to get agencies to make the moves. The 2030 target is a challenge and it will depend on the availability ultimately in the market. We are a small player in a global market. There's no action by Treasury in procuring or the Government from its side, that's trying to slow things down. What is really slowing it down is the market availability, and to a degree the cost function, where some agencies are not as keen to purchase the higher capital cost vehicles. We've have been putting incentives in place to support them to do that as well.

Dr WOODRUFF - Thank you. Minister, it looks at the moment that we're nowhere near the target that you have set for next year. You've just said that there are 15 vehicles on order; presumably, none of them are going to arrive in the next couple of weeks. They are the things that are on order at the moment for next year. That is 15 out of 75. If we're not meeting next year's target it means we will be behind in the year after, and so on. I totally understand that this is expensive. I am concerned, is there no mandate for agencies to require them to be proportionately purchasing electric vehicles? If that's not happening, what is going to force the change and do you think that is what we need in order to make that change?

Mr FERGUSON - I wouldn't go there at this point in time. These are early days for our initiative - I think we only made this announcement two Budgets ago. The first funding was in the last Budget, I think; forgive me if I am wrong about that. One of the things I would ask you to bear in mind is that whatever is chosen from the current legitimate list that Government provides, it needs to meet the needs of the user of that vehicle. Maybe the electric vehicles, the plug-in or the pure battery vehicles are not always suitable for our users' needs across Government, and I am sure it wouldn't take too long to think of a few examples of that.

The point is there is a legitimate list that users of Government vehicles can select from. It's a smaller list than was previously the case and I accept your point of view that it is an eight-year vision to achieve; without a doubt.

Dr WOODRUFF - Does it include GBE's when you said agencies before? Does the 2 599 vehicles, when you are talking about the turnover in the government fleet, does that include the GBE fleets as well?

Mr FERRALL - I don't think it does.

Dr WOODRUFF - So all the Hydro, Aurora and TasNetworks vehicles driving around the state will not be required to transition? There will be no Treasurer's Instruction directing them to do the same thing?

Mr FERRALL - There isn't at the moment. What we've been doing with the government fleet is effectively reducing emissions limits on the vehicles and we've done that over a period of time so that's effectively meant that a number of vehicles have fallen off the list over time. Again, it's a matter for the Treasurer to consider, but I envisage we will continue to reduce those emissions as electric vehicles become more widely available at a better price point. As I said earlier, the fleet does get replaced quite regularly so you're looking at a broad time frame of about three years for complete fleet replacement, so as we go forward and the availability of electric vehicles improves, we will expect to see a much greater percentage across the fleet.

Dr WOODRUFF - If there's a push.