- DWS Head of Infrastructure released a document pleading for more investment into European electric transportation infrastructure
- Australia is behind the rest of the world in electric vehicle adoption
- Real estate must prepare for the impending electric vehicle boom
In tandem with 2023’s Earth Day, DWS Head of Infrastructure Richard Marshall released a DWS environmental, social and governance (ESG) Perspectives paper on electric transportation infrastructure.
The document calls for more investment in European transportation infrastructure to address the imminent climate catastrophe. Indeed, the newly published Sixth Assessment Report from the United Nations’ Intergovernmental Panel on Climate Change (IPCC) declared that efforts and ambitions to curtail climate change remain insufficient.
Marshall argues that the transportation sector needs to catch up with other economic sectors in its commitment to reducing greenhouse gas emissions. Transportation accounts for 26% of all European greenhouse gas emissions, which have grown by 7% since 1990.
The adoption of electric vehicles (EV) may be the lynchpin in radically decarbonising transportation. Along with their zero tailpipe emissions, EVs reduce the harms associated with noise and air pollution.
Though Europe leads the pack in terms of EV adoption when compared to other regions, Marshall states that critical gaps in electric transportation infrastructure have slowed the adoption process. For instance, most EU countries still fall short of the 2014 Alternative Fuel Infrastructure Directive’s (AFID) recommendation of one public charger per 10 electric vehicles.
Plans to invest in electric infrastructure are not proportional to EV demand. The Netherlands owns a third of European EV infrastructure despite having less than a tenth of the EV stock. Also, more fast charging points must be installed, which can serve more EVs than their slower counterparts.
EV usage and Australia
The messaging of Marshall’s ESG paper is especially relevant to Australia. Like in Europe, EVs are a vital tool to boost efforts in reducing greenhouse gas emissions. However, Australia trails behind the rest of the world in EV adoption. Whereas EVs made up 20% of car sales from 2021 to 2022 in Europe and 14% globally, EVs are a mere 3.8% of new vehicle sales in Australia according to the International Energy Agency’s (IEA) Global EV Outlook 2023 report.
EV sales in Australia from 2011 to 2022
Nevertheless, EVs in 2022 surged from the start of the year, from 44,000 to 83,000 according the Electric Vehicle Council. The slow EV uptake means Australia may struggle to fulfil obligations to reach net zero by 2050.
The main obstacles to EV adoption for Australians are the high costs of switching to EVs and a lack of electric vehicle infrastructure to ‘range anxiety’, which refers to the fears over an EV’s ability to reach one’s destination before running out of power.
Considering these issues, state governments have introduced a slew of rebates and subsidies to offset the costs of switching to EVs. For example, Queensland recently announced in April that households earning under $180,000 were eligible for a $6000 rebate for EVs under $68,000, the most generous rebate. Likewise, Western Australia offers $3500 for EVs under $70,000, and Victoria offers $3000 for those under $68,740.
States governments have also committed substantial portions of their budget to increase the electric vehicle infrastructure—Western Australia has pledged $22.6 million to improve the state’s EV charging infrastructure. In comparison, Queensland has pledged $10 million to do the same. New South Wales has set aside $171 million for charging infrastructure elsewhere, while Victoria has budgeted $19 million.
Electric vehicles and Australian real estate
State governments’ ambitious electric vehicle-friendly policies pushing EV uptake nationwide may significantly impact the Australian property market. As consumers become more environmentally conscious, the inevitable rise in electric vehicle uptake will see an accompanying demand for real estate with EV charging capabilities.
Once shunned by investors over concerns about traffic noise and air pollution, real estate near high-traffic roads may experience a renewed interest. With poor air quality and lowered noise pollution no longer being factors, the quality-of-life gains associated with widespread EV adoption may increase the value of such properties.
