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href="http://www.theage.com.au/business/electric-cars-should-drive-our-dreams-20110113-19pv7.html">http://www.theage.com.au/business/electric-cars-should-drive-our-dreams-20110113-19pv7.html</A></FONT></DIV>
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<H1 class="cN-headingPage prepend-5 span-11 last">Electric cars should drive our
dreams </H1>
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<H5>Matthew Wright </H5><CITE>January 14, 2011</CITE>
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<P><STRONG>The Australian car industry faces a big drop in demand. </STRONG></P>
<P>AUSTRALIA'S car industry seems to be travelling well, but serious challenges
are just over the horizon. British entrepreneur Richard Branson recently
predicted that oil would reach $US200 a barrel by 2015.</P>
<P>This would have big implications for Australia's three main car makers that
specialise in petrol-guzzling rear-wheel-drive vehicles. How will the industry
cope with a big drop in demand for such cars?</P>
<P>The upward trend in electric vehicle production and demand - which will
increase along with oil prices - is the key to future-proofing the Australian
car industry.</P>
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<P>The first Chevy Volt electric vehicles rolled off GM assembly lines in
Michigan last month. The US car maker has made the electric vehicle (EV) a key
plank in renewing its brand.</P>
<P>Renault/Nissan has followed suit. The Leaf, its first pure electric car, and
new EV models will be mass-produced at 500,000 units a year within three years.
Chinese electric car maker BYD is already there, with an estimated 500,000
electric vehicles sold this year.</P>
<P>These companies are betting on huge upswings in EVs, and rightly so. American
company General Electric is committed to having 25,000 electric vehicles in its
global fleet by 2015.</P>
<P>If we want to avoid being left with an increasingly weak car industry, we
have to move ahead with manufacturing pure electric and plug-in hybrid electric
cars in Australia.</P>
<P>The time has come for the Labor government to strengthen the car industry and
turn threats into opportunities, providing matched funding to retool Australian
car plants for electric-vehicle production.</P>
<P>The government can stimulate domestic demand for Australian-made EVs.</P>
<P>According to an IBIS World Report from 2009, only 15 per cent of the million
cars sold in Australia each year are supplied from our local plants.</P>
<P>A commitment to electrify the government's entire vehicle fleet and
refocusing fringe-benefit tax exemptions from petrol vehicles to EVs is the key
to driving demand.</P>
<P>These measures can be timed to coincide with retooled factories starting
production. (Just imagine Australian families buying Chevy Volt-type plug-in
hybrids packaged as Commodores and Falcons).</P>
<P>The Gillard government can work with state and territory governments to
develop a plan for the strategic development of Australia's rare-earth
resources.</P>
<P>Lithium and other magnetic minerals are the critical ingredient of EV
systems. Developing domestic rare-earth supplies will boost our EV manufacturing
and break China's tight grip on global rare-earth supplies.</P>
<P>Public investment in research and development and enabling infrastructure
(recharge stations) can position Australia at the forefront of electric-vehicle
technology.</P>
<P>While our economic competitors in North America and Europe are entering an
era of austerity, Australia's economy is healthy. We can afford to invest in
measures to future-proof our car industry and protect jobs. Indeed, this is what
is needed so Australia can catch up with leading innovators in Japan, Europe,
and the US.</P>
<P>The switch to EVs is on. But Australia's role in the switch is not
assured.</P>
<P>It remains unclear whether the Gillard government will act this year to
empower the Australian car industry. Failure to do so will squander that
industry's opportunity of a lifetime.</P>
<P>The change from the 19th-century combustion engine to electric drivetrains
can boost Australian-made vehicle sales from 150,000 cars a year, as they are
today, to more than 500,000.</P>
<P><I>Matthew Wright is a director of Beyond Zero
Emissions.</I></P></DIV></DIV></FONT></DIV></BODY></HTML>