Commercial Electric Vehicles (CEVs) present $110 billion opportunity to decarbonise Australian industry

• Leading peer-reviewed research from Beyond Zero Emissions (BZE) shows that while the focus to date in Australia has been on passenger EVs, commercial vehicles represent 9% of Australia’s carbon emissions, and this is rising
  
• The bus and truck manufacturing industry in Australia currently employs the same number of workers as the coal industry. 
• The research shows that replacing existing internal combustion engine buses, trucks and light commercial fleet vehicles would reduce commercial vehicle road emissions by 50%, while generating 105,000 jobs and $110 billion in revenue for businesses by the end of 2030. Similar opportunities exist in Australia’s freight and mine haul industries.
  
• Government policy and procurement targets are urgently needed to ensure the commercial vehicle (CV) assembly industry can embed itself in the fast-growing global CEV supply chain.
  

Australia has a healthy commercial vehicle assembly industry which, with the right support, can take the important next step to transition from assembling internal combustion engine (ICE) buses and trucks to their electric equivalents. There is huge potential for the industry to grow - with existing commercial electric vehicle (CEV) manufacturers expanding their production capability and others retrofitting fossil fuel vehicles; both are key to decarbonising commercial vehicles, new research from BZE shows. 

Upscaling our onshore manufacturing capability would see significant opportunities for Australian manufacturers to meet domestic demand, and to grow export market capability in high Environmental, Social and Governance (ESG) standard markets in Asia, Europe and the US. 

Making this happen needs an appropriate federal government policy response to stimulate industry, as well as government procurement targets, to ensure Aussie CV manufacturers can keep pace with global trends and remain competitive. 

In 2023 our automotive industry workforce of 34,000 - equivalent to that of the coal mining industry - is a skilled base, well-positioned to pivot to support the growth of CEV manufacturing onshore. 

Growing the CEV industry will also create demand for the batteries required by electric vehicles. Integrating our supply chain opportunities across industries will be key to Australia becoming a renewable energy superpower. To do this, we also need to identify the key industries in which to invest, to remain competitive in global supply chains.

BZE’s research outlines detailed recommendations for government, to:

• Set targets for all new commercial vehicle sales to be zero emissions by 2030. 
• Deploy or retrofit 1.8 million zero-emission CEVs over the next seven years, including 300,000 buses and trucks
• Grow Australia’s sovereign CV manufacturing capacity through Production Tax Credits that encourage manufacturers to go electric and a national communication plan to attract tomorrow’s workforce
• Stimulate demand by securing a zero-emission government bus fleet declaration from state and territory governments
• Incentivise retrofitting and battery reuse, to further reduce overall emissions and kick start the circular economy.  

BZE Senior Researcher Rowan Moorey said: 

“At this critical juncture, the Australian government has a defining role to play in helping the commercial vehicle industry transition to all-electric, ensuring that secure longer-term jobs are generated and the industry is revitalised.‍

Government action is urgently needed now to create the conditions for CEV manufacturing to grow as a sector, as this window for Australia to embed itself as a key player in the global supply chain for CEVs will not last forever.”‍

These findings complement other key research into decarbonising the commercial transport sector in Australia, conducted by Climateworks Centre and Climate Energy Finance (CEF). Released in recent weeks, Climateworks’ research found that decarbonising short-haul road freight could halve Australia’s freight emissions; Climateworks transport program lead Helen Rowe said: ‘Freight will be an important component of Australia’s overall transport decarbonisation strategy and implementing solutions, many of them available now, will help companies and industries that rely on freight operate more efficiently; and it will help Australia meet its climate targets and commitments.’

Similarly the opportunities for decarbonising Australia’s world-leading, but highly emitting mining sector (accounting for 21% of total emissions), offer huge opportunities with the electrification of haulage fleet vehicles. Tim Buckley, CEF’s founder and Director said in response to their recent report ‘‘Fuel Tax Credit Scheme and Heavy Haulage Electric Vehicle Manufacturing in Australia: 

‘“Australia has the opportunity to leverage its world-leading mining industry by collaborating with global leaders on mine haulage equipment electrification. We should be the first mining jurisdiction to deploy EVs at scale and speed, working with the likes of Liebherr, Komatsu and Caterpillar to manufacture EV trucks onshore so as to create Australian domestic manufacturing supply chains and demand for onshore battery manufacturing. “A cap on the federal diesel subsidy at $50m per year per group would raise $14bn by 2030 that could be 100% reinvested to derisk and incentivise the upfront establishment costs of a mining EV industry here. This would be a massive step towards decarbonising the Australian mining industry and enabling it to achieve its net zero emissions targets.”