Global statistics show that Australia’s per capita transport emissions are 45 per cent higher than the OECD average1. Given its geography and land size, the country’s transport industry is a large and an important contributor to the economy's growth and development. By the same token, the transport industry is the country's third largest source of greenhouse gas emissions, and as such it is a significant source of climate change risk for residents in the long term.
Given the Australian governments’ commitments to net zero emissions by 2050, led by Victoria’s steadfast resolve to cut the state’s emissions by 75-80 per cent by 2035 (Victoria’s Climate Change Act 2017), gaining a clear understanding of factors that influence demand and take-up rates of electric vehicles is a move in the right direction. According to the latest report by the Australia Climate Council, to reach the Australian government’s target of net zero carbon dioxide emissions by 2035, 75 per cent of Australia's new car sales by 2030 need to be electric (see Purtill, 2021). The last 12 months appear to have been a good year towards this end with the Electric Vehicle Council (EVC) reporting rapidly rising EV sales. Accordingly, 46,624 EVs were sold in Australia between Jan and June 2023 which is almost 3 times higher than the same period in 2022. EVC further reports that EVs this year represent 8.4 per cent of all new cars sold in Australia – a rate which is more than doubled the 3.4 per cent observed last year2.
While the country’s EV market continues to expand, Australia’s EV sales share of 8.4 per cent is still a long way behind reported figures in Europe: 88 per cent in Norway, 54 per cent in Sweden, 35 per cent in Netherlands, 31 per cent in Germany, 23 per cent in the United Kingdom and 21 per cent in France (IEA 2023). The strong performance of the domestic EV market, however, meant that Australia’s EV sales share in 2022-23 has caught up with that of the United States, where the EV sales rate has been slow to improve relative to Europe. A 2021 survey by The Australia Institute found that two-thirds of Australians support all new car sales to be zero emissions vehicles by 2035 (The Australia Institute 2022), while EVC’s Consumer Attitudes Survey in 2021 found that about half of respondents saw themselves driving an electric car in 2030 (EVC 2021). However, the same reports also show that domestic consumer willingness to buy an electric vehicle is generally low, and that regional Australians are more cautious about making 2035 an all-electric vehicle zone compared to their counterparts in more urbanised areas.
It has been noted that rural and regional Australia faced the challenges of distance and limited access to EV charging, but the authors believe there is more to it than that. Australia is a very large continent with a wide variety of landscapes and climates – including deserts in the centre, rich tropical rainforests in the north-east, and lush mountain ranges in the south-east. Its mixed-market economy is richly endowed with natural resources which are unevenly spread across the land. The economic profile of states, territories and regions – and the consumers therein – vary widely, with some having greater level of dependence on primary resources and others mainly drawing income from the service and financial industry. The diversity of the national economy is also manifested in its energy consumption. Coal and natural gas remain the main source of energy for the country, accounting for 64 per cent of all energy in 2022, while energy from renewable sources such as wind, solar, hydrogen and bioenergy accounted for 35.9 per cent3 of the country’s total electricity generation (CECA 2023). Given this, it is apparent that Australia’s regions can differ in their environmental goals.
In this study, we explore the observed variations in regional adoption rates to understand preferences and how they can affect EV adoption behaviour over the foreseeable future. We utilise club convergence analysis to understand the underlying patterns of EV adoption across the country, and gain insights into factors driving the direction and speed of EV adoption in the medium term. Additionally, we develop models of consumer preferences which can provide valuable clues into the role of green awareness on the speed of EV adoption, amongst other more well-known factors. To our knowledge, the potential impact of green awareness on EV adoption has not yet been empirically tested, so this study will allow us to understand how economic, social, technical and gender status across regions can affect the evolution of Australia’s EVs usage.
The remainder of the paper is structured as follows. In Section 2, we review the literature on EV adoption to focus on factors that influence EV adoption decisions, examine lagging EV adoption regions and look at various modelling methods used in previous work. In Section 3, we introduce the club convergence methodology and describe in detail how we apply it to the case of EV adoption. We discuss the dataset and our key variables in Section 4. In Sections 5 and 6 we present our empirical results with discussion and analysis. Section 7 concludes.
Footnotes
[1] Climate Council, Transport emissions: Driving down car pollution in cities(opens in a new window), accessed 27 February 2023.
[2] Electric Vehicle Council, Australian Electric Vehicle Industry Recap 2023(opens in a new window), accessed 10 October 2023.
[3] This is up from 32.5 per cent in 2021.
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