QUESTION: Electric vehicles in the state fleet

During Question Time, Mark asked the Treasurer in his capacity as the Minister responsible for the South Australian Government Financing Authority which is in turn responsible for Fleet SA, questions on the subject of electric vehicles in the state fleet.


The Hon. M.C. PARNELL: Approximately 20 per cent of Australia's greenhouse emissions come from the transport sector. Today, in InDaily, Electric Vehicle Council chief executive Behyad Jafari, in response to news that only 6,900 electric vehicles were sold in Australia last year, blamed political inaction, and stated:

We have no targets, no significant incentives, no fuel efficiency standards…our governments are apparently doing everything possible to ensure Australia is stalled with its hazard lights on while the rest of the world zooms into the horizon.

By contrast, in January this year, new US President Joe Biden pledged to eventually replace the entire USA government fleet of 650,000 vehicles with electric vehicles. In South Australia, according to the South Australian Government Financing Authority's Fleet Snapshot from February this year, only 1 per cent of the government's fleet of 6,742 vehicles are plug-in electric, which category also includes plug-in hybrid electric vehicles which still have petrol engines. There is no detail provided about how many 100 per cent electric vehicles are in the state fleet.

Also, according to the list of approved state fleet vehicles able to be leased by members of parliament, a majority are now lower emission hybrid vehicles, which is good; however, none of them are fully electric. I note that the Premier's commitment, via the State Electric Vehicle Action Plan, is for the state fleet to be fully electric by 2030.

My questions to the Treasurer are:

1. Can the Treasurer advise how many vehicles in the government fleet are purely electric vehicles as opposed to petrol/electric hybrid vehicles?

2. If the intention is for the South Australian government to be 100 per cent electric by 2030, when will the government start to include more fully electric vehicles in the state fleet?

The Hon. R.I. LUCAS (Treasurer): I am happy to take the honourable member's questions on notice and bring back a reply. Certainly, the government has taken a number of actions in relation to encouraging the take-up of electric vehicles, contrary to—I think the inference in the honourable member's question was that in last year's budget the government announced a range of initiatives, $18.3 million, in relation to the Electric Vehicle Action Plan for South Australia.

One of the key issues that has to be addressed in relation to the uptake of electric vehicles, putting aside the critical issue for consumers of cost, is access to recharging facilities. The government has recognised that and part of the expenditure in the Electric Vehicle Action Plan, the $18.3 million—which I might say, as I commented in the budget last year, is significantly more than the projected possible collections from a road user charge in South Australia.

This government has demonstrated its commitment to transitioning to electric vehicles, but it is not the mere fact of by dictate saying, 'Everyone shall drive an electric vehicle,' if you don't cater for the essential infrastructure that is going to be required, which is recharging. I am sure the honourable member, when he reflects on that, will accept that there are other issues that will have to be addressed.

I think I indicated earlier that even the opponents of the electric vehicle user charge, one of whom the honourable member quoted, have all, in their discussions with me, agreed with the industry assessments that I have been given, that the cost of electric vehicles will be competitive with our current range of vehicles by around about 2025, due to the natural progression of both the improvements in technology and the greater economies of scale in terms of international production.

As I said, that is an assessment that has not only come from government advisers within the departments that are involved but has also been confirmed in some of the meetings that I have had with opponents of the proposed road user charge. They concede that the price of electric vehicles will come down, and come down significantly, in the relatively short term, that is, by 2025.

Of the two key issues that all the research shows inhibit consumers from taking up electric vehicles, one is the initial cost, because at the moment it is more expensive to purchase an electric vehicle. As I said, all the advice is that over the next five years that will significantly disappear, if not completely.

The second issue is the issue of infrastructure, in terms of recharging or charging capacity across the state. You don't want to head off on a lovely trip down to the South-East or up to the Flinders Ranges and find that you have run out of power part way there and you don't have the capacity to recharge. There are all these issues that the government is seeking to address in the significant budget allocation we gave last year of $18.3 million to try to address some of those issues.

In relation to the state fleet, the government has made it clear that we will have a program of transitioning the government fleet over time to electric vehicles that are fit for purpose and cost effective. There is a clear commitment from the government there. Regarding the issue of cost-effectiveness, if the industry experts are correct and the price of those vehicles in terms of the initial cost comes down, then clearly the overall running costs are going to be significantly cheaper, and therefore whole-of-life cost is likely to make the purchase of electric vehicles attractive not only for the taxpayers of South Australia but also for consumers when they purchase their own vehicles, as to whether they choose an electric vehicle or not.

The Hon. M.C. PARNELL: Supplementary question: is the Treasurer saying that in relation to the number of electric vehicles in the state fleet it is not inclined to buy more vehicles until 2025, when price parity is reached, in order to be cost effective? Is that the effect of the minister's answer, that the less than 1 per cent of state fleet vehicles is likely to remain until price parity is achieved in four years' time?

The Hon. R.I. LUCAS (Treasurer): No, it's not. I am happy to sit down with the honourable member and run through the detail of it again, but no, it's not. The issue, as I indicated to the member, was in relation to whether they are fit for purpose and cost effective. One looks at a combination of both the initial purchase price and the ongoing whole-of-life costs of a vehicle. It's not just your purchase price, you look at what the cost of running the vehicle might happen to be and you work out a whole-of-life cost. That is the way the state fleet has always been run in relation to the purchase price. 

We have also introduced some other flexibilities for departments. If, for example, as part of their package they previously had purchased 100 vehicles, if they were prepared to reduce the number of vehicles by five, so that it was 95 vehicles, we would look flexibly in terms of keeping the overall cost; that is, if they are going to run 95 instead of 100, we would look at that in terms of being cost effective.

So we are looking at all ways of trying to encourage cost-effectiveness on behalf of taxpayers, because this is taxpayers' money we are spending in relation to what is occurring. We are looking at flexibilities in terms of how we can encourage departments and agencies. The simple answer to the honourable member's question is no, it wouldn't be correct to interpret my original response in the way that he did.