A unique combination of advantages has handed Australia a historic chance to become a sustainable global manufacturer of electric vehicles – provided the federal government acts swiftly and decisively, according to new research by the Australia Institute’s Carmichael Centre.
The new report, Rebuilding Vehicle Manufacturing in Australia: Industrial Opportunities in an Electrified Future, has found Australia is uniquely blessed with advantages to attract and retain EV manufacturing and rebuild the nation’s car-making capacity. This potential, however, will not be met without major government action.
“When it comes to creating an EV manufacturing sector, Australia enjoys advantages other nations would die for: rich reserves of lithium and rare earths, strong industrial infrastructure, a highly skilled workforce, powerful training capacity, abundant renewable energy options, and untapped consumer potential,” said Dr Mark Dean, the report’s lead author.
“And contrary to popular belief, we wouldn’t be starting from scratch. Thanks to the resilience of our remaining automotive manufacturing supply chain, a surprising amount of auto manufacturing work – including components, specialty vehicles, and engineering – still exists here.”
But Dr Dean said his research found Australia’s advantages would count for little without significant government support. The report makes a number of recommendations including:
- Establishing an EV Manufacturing Industry Commission
- Using tax incentives to encourage firms involved in the extraction of key minerals – primarily lithium and rare earths – with local manufacturing capabilities, especially emerging Australian EV battery industries
- Introducing a long-term strategy for vocational training, ensuring the establishment of skills to service major EV manufacturers looking to set up operations Australia
- Offering major global manufacturers incentives (tax incentives, access to infrastructure, potential public capital participation, etc) to global manufacturers to set up – especially in Australian regions undergoing transition from carbon-intensive industries
- Introducing local procurement laws for the rapid electrification of government vehicle fleets
“No nation builds a major industry without its government taking a proactive role. Our new research shows there’s no excuse for inaction, because there are a huge range of powerful levers our government could be pulling,” Dr Dean said.
“If we capture the moment we’ll capture abundant benefits: creating tens of thousands of regional manufacturing jobs, reducing our dependence on raw resource extraction, reinforcing our accelerating transition toward non-polluting energy sources, and spurring innovation, research, and engineering activity in Australia. We just need our government to act.”