News

May 08, 2023

"Third world" for EVs: VW says electric ID range won't be in Australia for years

Volkswagen says its ID.3 and ID.4 electric vehicles are unlikely to arrive in

Volkswagen says its ID.3 and ID.4 electric vehicles are unlikely to arrive in Australia by 2023, as previously foresadowed, after accusing Australia of being "hostile" to EVs, with little if any support and encouragement from federal and state governments.

Volkswagen says the ID.4, a small electric SUV, would likely cost around $60,000 in Australia, while the ID.3, a Golf-sized electric hatchback, would be less than that.

The company's Australia boss Michael Bartsch had previously said 2023 was a likely date for their arrival, but even that looks unlikely with no positive regulatory change on the horizon, a spokesman for the German car maker said.

Bartsch's exasperation was clear in an interview with The Age and The Sydney Morning Herald on Tuesday, in which he lashed the government's "embarrassing" position on EVs.

"Hardly a day goes by when we don't get an inquiry from someone who would dearly love to buy a Volkswagen electric vehicle, and we have to tell them we don't know when we can introduce them. It seems to get more and more uncertain," he was quoted as saying.

Energy Minister Angus Taylor's office responded to the comments in hostile fashion, saying it wouldn't "be lectured about vehicles emissions by a car manufacturer that has a track record of deceiving motorists and violating clean-air laws" – a reference to the "diesel dupe" scandal of more than five years ago.

A spokesman for the firm told The Driven Australia was "positively hostile" to EVs and was in the "automotive third world".

"I don't think it's a left or right issue, it's a right or a wrong issue, and Australia is in the wrong," he said.

Jeff Shafer, product planning manager with Volgswagen Australia, said the company wanted to sell EVs in Australia, but the lack of incentives simply meant it would go to the back of the queue.

"We are very much predisposed to bring EVs to Australia as quickly as we can, but at a global level there's production capacity restraints and engineering and resource constraints. In every market there are local regulation that the vehicles need to be tailored to. At an outright level there are only so many batteries that can be produced," he said.

"It means that we are effectively competing with other Volkswagen markets to secure an earlier timing, and markets that have a stronger claim to need the vehicles get moved up the queue, and markets that have disincentives like road user taxes are moved back in the queue."

Bartsch flagged 2023 as the arrival date for ID.3 small SUV and the ID.4 golf-sized hatch back back in December. But since then there have been further setbacks in the Australian market, most notably Victoria's EV road user tax and a widely-panned federal EV "Future Fuels" discussion paper, which rejected any meaningful incentives of EVs.

Volkswagen isn't just unhappy with the lack of EV incentives. It says Australia's lack of fuel standards means its newest ICE models simply won't run on Australia petrol, which has an unusually high sulphur content.

Volkswagen currently builds its cars to meet the "Euro 6" fuel standards, which have been in place in Europe since 2014. Currently Australian fuel, which is "stuck in Euro 5", is not likely to meet Euro 6 standards until 2027. By that time Volkswagen says the next generation of European fuel standards will likely already be in place.

This means many of Volkswagen's plug-in hybrid elective vehicles are also unable to run in Australia, because they are built to the European Union's much stricter standards.

The car maker made this point in a submission to the Ministerial Forum on Vehicle Emissions’ Light Vehicle Emissions for Cleaner Air Draft regulation impact statement last month.

"As our range of Plug-in Hybrid Vehicles (PHEV) often deploy the latest technologies for emissions reductions, in general these are not currently available for introduction to the Australian market as they have not been tested for compatibility with low quality petrol.

"Additional local durability testing may be undertaken specifically for the Australian market, adding cost and delays to market introduction. Given the low local volume and ability to recover this additional expense, this also rules out products for Australia."

In the same submission, Volkswagen said stricter fuel standards would incentivise EV uptake. "The current status quo of Euro 5 and the lack of clarity on future steps for emissions standards has a direct bearing on the EV uptake in Australia. First, the lack of policies, standards, and targets conveys the message that this is not a priority for our market.

"When negotiating for limited production of EVs, Australian importers have less leverage than other markets with well-defined policies. Second, as ICE emissions standards are improved, the relative pricing between ICE and EVs is reduced, encouraging a shift towards those cleaner technologies."

In its "Future Fuels" discussion paper, prepared by Angus Taylor's department, the government signalled it would favour hybrid EVs over full battery EVs.

In the Light Vehicle Emissions for Cleaner Air draft regulation impact statement, the government justified the 2027 target because it would give "Australia's refineries the necessary lead time for scheduled refinery upgrades".

"This lead time is also important to provide refineries with certainty for major investment decisions and allows them to plan workplace arrangements," the paper said.

James Fernyhough is a reporter at RenewEconomy and The Driven. He has worked at The Australian Financial Review and the Financial Times, and is interested in all things related to climate change and the transition to a low-carbon economy.