Speaker 1:
I’ll just very quickly introduce Boundless because we are a relatively new organization. Boundless’s mission is to ensure that Australia’s on track to becoming a renewable energy superpower by 2030. We, like all of you in the room, want to contribute to an Australia that we can all be proud of. To us, that means a prosperous, renewable energy superpower and a global force towards a decarbonized world. We’re here today because dealing with transport is a big part in bringing that vision to a reality. Transport accounts for 18% of Australia’s emissions and the majority of those emissions are already addressable with mature technology, such as electric vehicles combined with a shift to active transport.
As we know, Australia lags the rest of the world in EV uptake. The good news is that the policy measures that can encourage EV adoption are well understood and the really good news is that Australia, completely dependent on imported oil and with access to cheap, renewable electricity, has more to gain than most. We helped put together today’s summit to put those policy measures and the benefits of a fast transition to EVs in the spotlight, especially with a new government that’s just signed up to more ambitious emissions reduction targets. We won’t hit those targets without dealing with transport emissions. So Boundless is proud to support our partners, the EV Council, the Smart Energy Council, the Australia Institute, and we appreciate FEMA coming on board and sponsoring the event as well today.
Now, I’m super excited in particular for this session and honored to be able to moderate it. I’m going to invite two people to the stage that require no introduction and I can’t wait to hear what they have to say, but just in case you’ve been living under a rock, we’ve got Robyn Denholm, the chair of Tesla, the company that’s done more than any other to lead the EV revolution, and Mike Cannon-Brookes, co-CEO of Atlassian and, more importantly, the chair of Boundless.
Is this working? Yeah. So to kick off, it’d be great to get your reactions to the minister’s speech today.
Robyn Denholm:
Why don’t I start? Yeah. So thank you, Minister Bowen. I really appreciate not only you taking the time to be here, but also how many people are in the room here today. It is actually a pleasure to hear the government actually putting forward what will be, I think, quite an important step for Australia in reducing emissions over time. So the goals in which Minister Bowen talked about in terms of affordable EVs, actually reducing costs for average Australians, working through consultation with industry, I think is key for Australia to move forward in EV adoption overall. So from my perspective, great progress. Bring on September so that we can all have the submissions and hopefully a resolution for a national approach with state, local government and industry participating. I think it’s a great step forward.
Speaker 1:
Great. Mike, what did you think?
Mike Cannon-Brookes:
Look, I think the good things to take out of the … well, Chris has just announced that maturity with which the government seems to be approaching the problem is a really refreshing step, I suppose. We have to have clearly fuel efficiency standards. We’ll hear a lot of that today. So the fact that they’re on the agenda is excellent. The fact that as someone, Robyn, who builds cars that have great speed, the fact that we have a date in September for consultation and we hope that that process moves fairly expeditiously. Because as BJ talked about, the speed with which we get this adoption comes to how fast these standards get implemented. So we hope there’s expeditious speed in there. I think most importantly, and I’m sure we’ll talk more about it is the fact that our standards cannot be a step forward from where we are today.
They have to catch up to where the rest of the world is. The problem is right now, we are far behind the rest of the world. Whatever we get to can’t be then continue to be far behind the rest of the world. We have to make that leap to catch up to where they are. I believe I heard that in the remarks today, so that’s probably the thing I would take out and highlight as a real light that we need to hold onto because that’s what we need to get to is to be on par with the rest of the world.
Speaker 1:
It was great to hear Minister Bowen talk about the point that a market hits a tipping point of EV adoption and take up accelerates from there. Boundless has been looking at 2024 as a target for that tipping point for Australia to hit 10% of new car sales being EVs. Mike, why don’t you start this time? What do you think it’ll take for Australia to get there by 2024?
Mike Cannon-Brookes:
To get to 10% by 2024 from two and change? Look, firstly, we have to have the belief that it’s possible. We can see that. We didn’t talk about our friends across the ditch in New Zealand who’ve gone from 3% to 10% in a bit over a year. So we know that that leap is entirely possible. When we like to talk about, “Oh, well, it’s totally different in Sweden because they’ve got this different world and it’s very different,” I’ll give you a hint, it’s no different over the ditch. They actually use all of our vehicle standards in terms of seat belts and regulations and most of the road standards are exactly the same and they have far less to gain than we do as a country. So we should take great optimism from that.
The one thing they do have is very sensible fuel efficiency standards and general EV policies that we could implement relatively quickly, which I think would be the major gap closer for us to get from that two and change percent towards 10. Again, 10 is a really big tipping point, as been seen globally, as you’ve mentioned, around the world. I think that’s obviously what we need and the question is how fast we can get that implemented.
Speaker 1:
I mean, Robyn, Tesla’s brung in the majority of the 2% that we are already getting. Is Tesla scaled up to get us to the 10% and what do you think it’ll take?
Robyn Denholm:
Yeah, I mean, I think very much in terms of what it will take is education. So forums like this in terms of educating the vast population out there about EVs, because quite honestly, there’s been a lot of fud in the past in terms of what EVs can do and can’t do in terms of your weekend activity. But from my perspective, that’s the number one thing. The second thing is a charging infrastructure because range anxiety is real, even though latest models can get up to 500Ks in terms of range, but people don’t know that unless you’re driving an EV. Then to me, the other thing is the incentive around the efficiency standards and the fuel standards. To me, that’s a really important part of this because whilst there aren’t models across all of the categories of transportation today, there will be. So the sooner we can get those standards out there, the better the industry will be prepared to actually have a roadmap to get to all of the different categories of transportation in Australia.
So for me, that’s a really important ingredient for the long term. The way I think about it in terms of an analogy is that where we’re behind the pack. It’s like that high school student in Year 12 who knows that they’ve got exams in October and we are in March and they haven’t actually opened the books yet. So the reality is we’ve got to start swatting. We’ve got to set that roadmap up. We could give up and say, “We’re never going to get there,” but the reality is we can and we should. Having those ambitious targets to actually contribute to the 2030 real reductions that the government’s put out, to me, transportation is part of the low hanging fruit of getting there and we’ve done it before. I am old, so I was around me in the vehicle space. When we went from leaded to unleaded petrol. You put out the marker, you say where you’re going as an industry and everybody lines up to get there. So from my perspective, I think they’re the ingredients that we need.
Mike Cannon-Brookes:
I think one of the things I might add is we’ve seen from all the comments today, again, I used the word maturity, as someone who’s driven an electric vehicle, a few of Robyn’s wonderful cars, for nine years now, I haven’t missed a weekend and I actually live in rural original Australia. So we can kind of dispense with a lot of that fight, as we said. The second thing to point out is that the demand is real. We see that in the room here, we’ve had to not let people in and we see that in all the queuing and the waiting and the frustrations. BJ talked about it’s winning the lottery to get an electric vehicle. We should be ashamed by that. That shouldn’t be the case.
The narrative that, “Oh, people don’t want these,” or, “It’s going to change,” I think we can hopefully put that completely behind us and realize that demand is not the problem at all. The problem is entirely about supply. So we should just focus on the supply problem. We are well progressed in terms of charging infrastructure, and I think we’ll continue to improve there, but really it’s about a supply problem and that that’s the fundamental sort of brick we need to remove so that we can get through.
Speaker 1:
Okay. So let’s get into the detail a little bit. We’ve heard that fuel efficiency standards are a big part of the solution of unlocking supply to Australia. We’ve heard Minister Bowen say they’re going to open up for submissions. Tesla will be writing submissions. I’m sure most of us will be writing submissions, but what does a good fuel efficiency standard look like?
Robyn Denholm:
I’ll start and you can … So to me, we’ve got to catch up to the rest of the world quickly, as quickly as humanly possible. So having a standard that doesn’t get us close to meeting the European or U.S. standards I think doesn’t cut it. So having that ambition of having a global leading standard or at least in keeping with the global leaders I think is really, really important. I do think 2030 is an important date that we’ve got to have a date by which we’re reducing materially the emissions from our vehicle fleet. It isn’t just about EVs. It’s also about reducing the pollution and the emissions from petrol vehicles.
Because as I said, there’s not a range of vehicles that covers all of the requirements of a market, but they will get there over time. But to me, what we can’t accept is the world’s dirtiest cars in Australia and that’s what we have today and that’s increasing. Again, having seen this movie before, if we actually are out there talking about what the standards are for petrol vehicles, as well as for total emissions, it’s really important that we put that out there so that we can clean up our act before we get to a fully electric world.
Mike Cannon-Brookes:I think I would add … look, again, we talk about 2030 a lot. Just as a reminder, that seems like a long time away. It’s 100 months next month. So you can start your clocks from 100 months and start counting down. That’s not a lot of months. So expeditiously doing this is probably one of the more important factors. As Robyn said, it just has to be on par with the rest of the world. So we are lucky in a little bit of a way, let’s take some optimism, that there are many examples of this in the rest of the world, both of the standards and the numbers, but also how they’ve been implemented and the effects of that. That lets us watch and see what’s worked best and presumably take best practice. We shouldn’t be ashamed of copying from what’s best in the rest of the world.
One of the parts of what has worked well is these cannot be voluntary standards.
Robyn Denholm:
No, that’s right.
Mike Cannon-Brookes:
There must be compulsory standards and they must have teeth. We currently have a voluntary standards regime. I joke about it. It’s like marking your own homework. It’s actually not, because no one has to mark the homework. You don’t even need to submit the homework, the standards we have have no penalties, no regulations and not even any reporting. So it’s not even marking your own homework. It’s literally just that nobody bothers to even have a look at the homework and you don’t even need to do it. So they have to have some sort of teeth in them to get that balance. Again, there’s lots of great examples of that around the world. That will send a very clear message to the industries, not just vehicles, but all sorts of other electrical transportation about where we’re headed and then that’s what brings the signal in for those companies faster.
Speaker 1:
Okay. You mentioned it’s not that long to 2030. It’s also not that long to 2050 and considering that every new car on the road stays on the road for 10 to 15 years, if we start to think about the climate trajectory and the emissions trajectory, I mean, what does it mean for the Australian transport market if we’re serious about hitting our Paris Climate Agreements in Australia?
Mike Cannon-Brookes:
Well, look, congratulations to Minister Bowen and the new government, 43% is a better target than we had before. I think we’re clear it’s not enough as what we’re going to have to get to, but as that target is 43% and will presumably go up between now and 2030, we have a lot of work to do. Again, transportation is a significant part of Australia’s emissions, about 18%, about two thirds of that are passenger vehicles. That is one of the easiest sectors for us to actually attack and make a meaningful difference in. Because we have electric vehicle technology where this is not some future magical thing we need to invent. I drive on every single day and have done for nine years and there’s plenty of them out there and they’re getting cheaper and it has lots of contingent advantages. We’ve talked about consumers bills going on and everything else.
So if you’re looking at how Australia’s going to get there, this has to be one of the major sectors that we go after very, very fast, firstly. Secondly, I think if you look back at the stats, it’s one of the sectors that’s actually gone up over the last few years. So the problem we have is since 2005, I think it’s 5%, 7% rise in transportation emissions.Speaker 1:
12%.
Mike Cannon-Brookes:
12%? Sorry. 12% rise. [inaudible 00:14:25] a numbers man. So people don’t realize that sometimes, that our emissions from transportation are actually rising. So the first thing we have to do is stop them from going up and then start them going down. So we should be clear that this is a sector with a huge amount of opportunity to contribute to that 43% and beyond reduction. But also that it is currently a sector that’s taking us away from that. It’s going in the reverse direction.
Robyn Denholm:
Yeah, I totally agree. The other thing I will add, being a part of the technology sector for a long time now, over 30 years, great technology always has two paths. You always have the early adopters, but you also have the economic equation and there’s a crossing point where the new technology actually is much more affordable than the old technology and you actually end up in a wholesale shift into that new technology. That is what’s happening with EVs today. So my view is the economic equation is better than it was eight years ago when I joined the board or nine years ago, when we started driving EVs, it’s better than it was even five years ago. Because the cost of oil has gone up, the cost of the technology for EVs is coming down. Hopefully it will continue to come down. There are lots of battery innovations that are happening.
We as Australians can actually contribute to that. As we talk about the supply chain in terms of how we reduce the cost of EVs globally through battery technology and battery minerals. But to me, that economic tipping point is actually already behind us. So I think that’s a very important part of the equation and I was very pleased to hear Minister Bowen talk through the economics as well, because every day Australians are struggling with what’s happening at the petrol pump each and every day.
Speaker 1:
Actually, I love when you hear countries that put on a 50% target for EV adoption, because if you understand S-curve adoption of technologies, you never really get to 50%. It’s kind of like the example Minister Bowen gave about Sweden. You go from 20% to 60% to 80%. 50% is actually a very unstable point that you just kind of generally blast through. So given that we’re on that economic trajectory, we’re trying to encourage take up. Australia, hopefully we’re going to move faster and we’ll get to that tipping point. What are the opportunities for the wider economy in Australia to benefit? It’s a huge change. The opportunity for Australia goes beyond that we’re just going to be driving cars that are cheaper to run. What do you think some of the bigger benefits are?
Mike Cannon-Brookes:
Well, I leave the mineral side and everything for Robyn who’ll comment for me adeptly on that. We’ve talked a lot about the individual consumer and reducing their costs. Again, your petrol bill on average for an Australian household is twice your electricity bill. So if you think how many column inches have been spilled, and I’ve spent a bit of time in that space, on your electricity bill, it’s a lot. The amount that’s been spent on your petrol bill and how much you spend on that is far less, right? That’s before we get to things like maintenance costs and other things. So yes, we have to get the cheap supply in, but once we get the cheaper supply of vehicles, we understand that will reduce everybody’s household spending.
From a sort of national economy point of view, we are a massive net oil importer. We don’t have any natural resources in oil, particularly that help us with this equation, and that will completely change. The less oil we import, it’s better for our balance of trade in all sorts of ways. We do have, as has been mentioned, a huge ability to generate our own electricity as a country, both nationally in terms of industrial scale and the grid scale, but also individually. We have the highest amount of household solar adoption. One of the things you see with electric vehicles is your propensity to install solar panels goes up I think three or four fold once you get an electric vehicle.
Because you suddenly realize, “Wait, I can make my own petrol and it’s very cheap to get it off my roof and stick it straight into my car?” The economics of your panels get much cheaper as does the economics of your electric vehicle. So we’re actually well poised to do that from a sort of household economics on a daily point of view and that’s a really big point. We’ve talked about emissions, so maybe I’ll leave it to you to talk about minerals and other things which I know your passionate about.
Robyn Denholm:
Yeah. I was going to say Mike knows that I get quite excited about this topic. So I actually think that electric vehicles’ battery technology is the biggest and best economic opportunity for Australia in a century. I mean that, because if you look at the bill of materials in terms of what goes into batteries, Australia has them all. There aren’t many other countries in the world that actually do, and we have a core competency in the first area, which is in mining. So whether it’s lithium or copper or manganese or any of the different elements that go into a battery, we know how to do that. But last year, Tesla bought a billion dollars worth of minerals. 70% of those came from Australia in terms of lithium. But what happens is we dug the rocks out of the ground, the spodumene main rocks, and we sent them offshore to be refined.
So no value add. So that billion dollars, a fraction of that comes back to Australia because of the way we’ve gone about the supply chain. What we need to do is to get the resolve to actually go up the food chain in terms of the electric vehicle and battery [inaudible 00:20:02], because it’s the same batteries that firm renewable energy, as do power electric vehicles. We’re very, very early in that whole cycle, but that supply chain will start to be locked in for the next decade and for the decades after that pretty soon. So I was very pleased as well to hear about the government policy to actually look at battery technology as being an industry that we want to invest in as a country.
It is not just up to government. It needs to be public private partnerships because we have the knowhow, we have the technology, we just need the will to actually move forward. We also have the capital. It is a very real opportunity for Australia to actually participate in that and become an energy superpower.
Mike Cannon-Brookes:
We talk at Boundless a lot about using our time, talent and treasure towards making Australia renewable energy superpower and this is a perfect example. When you say that, people assume that’s all about putting up solar panels and it is a piece of the puzzle. Turning Australia to renewable energy superpower, which is, I agree with Robyn, the largest economic opportunity we’ve ever faced as a country, is about exporting our cheap energy. We should have the cheapest energy in the world and we’re going to export it. Now we can talk about how we’re going to do that via a wire. We can talk about how we’re going to do that as hydrogen or some sort of material, but the category we leave out the most is by basically higher valued exported goods that come from a very cheap cost of materials, that come from a cheap cost of energy and that come from using our national time, talent and treasure to go at that problem. Again, we have a huge amount of financial resources in Australia, we have huge amount of talent in those industries and so we should think about that as exporting our bounteous resources, our boundless resources, pun intended, of those renewable energy assets that we have and the resources assets we have as higher valued manufactured goods. Batteries is one fantastic and huge category example of where we could be doing that, but we should see that as a portion of being a renewable energy superpower as a country.
Robyn Denholm:
Totally. I think batteries are the stepping stone for both renewable energies in the firming of those technologies, but also in EVs. There is no reason why we can’t produce EVs in Australia. There is no reason. I came out of the car industry in Australia. I was with Toyota when we actually used to make vehicles in Australia. We’ve got the talent. With automation and advanced manufacturing, we can actually produce economically efficient vehicles here as well. So to me, it’s just the will and the tenacity to actually work through what needs to be done.
Speaker 1:
I might just also call out, we’ve got Ambassador Kennedy with us today and obviously the U.S. President Biden just signed the Inflation Reduction Act and it has significant tax benefits and subsidies for EVs. A lot of those subsidies are tied to the origin of the materials in those EVs to either be from America or from countries that America signed a free trade agreement with, such as Australia. So I don’t think that’s fully percolated through, business and government understanding [inaudible 00:23:29] in Australia what a massive opportunity that is to kickstart the processing industry in Australia, because America is going to be only subsidizing vehicles where the materials come from countries like Australia and not countries like China, which is where most of those materials come from today.
So back up that case of a massive opportunity for Australia. So I mean, Australia, we do think of ourselves as different. We often say we can’t do things like fuel efficiency standards in Australia because we drive utes and we drive long distances. The best selling car in Australia is the Hilux. I mean, how much of the shift is cultural versus political versus economic? Can we do it as a country?
Robyn Denholm:
Of course we can. So you just have to travel all around the world. I mean, I spend a lot of time in the U.S. I’ve lived in the U.S. The cars in the U.S. are big. So from my perspective, if the U.S. can actually adopt fuel standards that are much better than ours in terms of 20% to 30%, then we can do that. I mean, no one is trying to take the tradie’s ute away from them. I have a family of trades people. But what we need to do is have utes that can actually be more efficient and we can do that today from a petrol perspective, and then over time as those models come out from different manufacturers around the world, and hopefully even here in Australia, then you can actually replace those with electric vehicles. Again, if I go back to the economics of it, driving a ute today is a very expensive proposition in Australia. So having the ability to take technology and actually apply it to that economic equation is really important.
Speaker 1:
What do you think, Mike?
Mike Cannon-Brookes: Look, absolutely no reason we can’t do it. I think it’s why we’re all here. Look, your Hilux example is a really interesting one. Obviously we have, as a broader group, the Japanese auto manufacturers are the least ambitious, let’s just say, for these standards to move. So we hope that that part of the equation moves forward. I think as we can see in the U.S. from the cyber truck to Rivian to the Ford F-150 Lightnings, there’s no shortage of electric utes and pickup trucks coming out. I forget the stats off top of my head, but the Ford F-150 Lighting, I think completely blew away at sales targets. So you think, “Oh, well, this is a category of people who they’re not really sure about your vehicles.” One comes long and it’s like, again, the demand supplier equation is out. So I don’t think from a demand perspective in terms of that it’s going to make a difference.
I think there’s also an undersold benefit in how much it can change those jobs. Right now I probably have particular types of tradies and tend to encourage the use of electrical tools, let’s just say, on the farm. But if you’ve got a ute that’s electrically based, one should not forget that you are taking around a power center with you. So in terms of charging, whether it’s a whipper snipper, whatever piece of equipment that you are putting into your ute, you have the ability to power it from the ute. So you can then recharge a battery bank that goes into a drill or whatever it is that you’re taking with you. So we should forget that this can actually be not just advantageous in terms of their bills, but advantageous in terms of their efficiency of doing the job. So I think I’ve yet to find anyone that’s against the equation. I think the demand and suppliers is exactly the same problem in that category.
Speaker 1:
Imagine a world where there’s no more petrol powered leaf blowers or whipper snippers, and it’s all just quiet electric powered from the utes. I think that’s a vision we can all sign up for.
Mike Cannon-Brookes:
See me with my electric chainsaw on the farm, mate. It’s quite [inaudible 00:27:05].
Speaker 1:
Well, thank you so much for your time today. Obviously you’re two leaders in the industry, thanks for all the work that you do at Tesla and thanks for Mike for backing Boundless and for your advocacy for causes like electric vehicles in Australia, and thanks to everyone today for attending. It’s a real show of strength, I think, that the government and media get the message this is a really serious industry and that we’re ambitious and that we want to see change in Australia. So thank you all for coming and thank you both for joining us.