Government pulls plug on push for subsidies for buyers of electric vehicles

The cost of subsidies would be too high federal Energy and Emissions Reduction Minister Angus Taylor said during the release of his government's Future Fuels Strategy discussion paper.

Mr Taylor was confident the present price gap between hybrids and fully electric cars and traditional fossil-fuel powered cars would quickly narrow.

"Australians are already making the choice to switch to new vehicle technologies where it makes the most economic sense with hybrid sales doubling last year," Mr Taylor said.

"Importantly, this discussion paper shows that closing this gap through subsidies for new technology vehicles is not value-for-money for taxpayers and is an expensive form of (emissions) abatement.

"Depending on the vehicle type and use, this would cost up to $747 per tonne of carbon dioxide equivalent or up to around $8000 over the life of a vehicle."

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"The Future Fuels Strategy discussion paper outlines the government's vision to create an environment that enables consumer choice, stimulates industry development and reduces emissions in the road transport sector," he said.

Mr Taylor said the future of road transport in Australia would contain a mix of vehicle technologies and fuels including hydrogen and biofuel.

"We're focusing on five priority initiatives where it makes the most impact to take action first, including commercial fleets, essential infrastructure and improving information to better inform motorists," he said.

"The Government can also foster this change by making sure our electricity grid is ready for these new technologies. Our approach will help motorists to embrace the increasing range of technologies that are available and keep Australians moving."

The five priority initiatives cover the following areas:

Deputy Prime Minister Michael McCormack said the strategy would be underpinned by significant government investment.

"We are backing this with substantial funding including the $74.5 million Future Fuels Package and the $24.5 million Freight Energy Productivity Program," he said.

"This forms part of the King Review Technology Co-Investment Fund and the ARENA-administered grants program will help heavy road freight businesses evaluate fuel efficiency technologies for both diesel vehicles or new technology fleets."

The trucking industry welcomed the future fuels discussion paper and the commitment to delivering a freight energy productivity program, chair of the Australian Trucking Association (ATA) David Smith said.

"New, low emission transport technologies will not become reality if they are not viable commercial options for trucking operators," he said.

"We need to accelerate the development, production and viability of low and zero emission heavy vehicle technologies and that requires targeted government investment and actions to remove barriers that prevent industry from adopting these technologies.

"The Government has identified electric vehicle charging and hydrogen refuelling infrastructure as a priority initiative and the Government has recognised that long-haul trucks will need dedicated charging infrastructure.

"The ATA has been calling for governments to remove the regulatory barriers that slow the introduction of new and low emission trucks, accelerate the commercial viability of low and zero emission trucks and to lead reforms to incentivise the purchase of new heavy vehicles."

Not as impressed was the Electric Vehicle Council which said the Future Fuels discussion paper was "yet another flaccid, do-nothing document that will prevent Australians getting access to the world's best electric vehicles".

Electric Vehicle Council chief executive Behyad Jafari said the government's paper claimed incentives for electric vehicle sales didn't stack up "despite the rest of the world rapidly accelerating existing incentive programs".

"The British government, for example, allocated more than $1 billion in subsidies for electric vehicle buyers and charging stations last year alone."

"A rapid transition to electric vehicles would clean our city air, drastically reduce our carbon emissions, and free us from our insecure dependence on foreign oil imports," he said.