In potentially big news for the Australian car industry, a proposed $15 billion Federal Government fund to support manufacturing this week passed the Senate and into law.
The National Reconstruction Fund’s (NRF) purpose is to support Australia’s manufacturing base to make it less reliant on global forces, and to incubate local companies that need capital.
Plans include investing up to $3 billion in taxpayer money (through loans, equity investments, and guarantees) on low-emissions technologies, $1b on value-adding from mineral resources, and $1b to assist “advanced manufacturing”.
The fund is designed to regenerate by delivering a positive rate of return, and will be governed by a supposedly independent board.
This is potentially big news for Australia’s automotive industry, according to Prime Minister Anthony Albanese, which is deemed a key factor in Australia’s push to be a player in lucrative green technologies.
“This is about providing some assistance, facilitating investment that might struggle to attract capital, particularly given what other nations are doing,” he said today.
“But we’ve already fallen behind. And there’s a reason why other nations back their automotive industries. Because it’s not just about cars, it’s about the multiplier effect. And we can do it here.
“We manufacture caravans. We manufacture buses. We manufacture the fastest EV charging stations in the world, Tritium, in South East Queensland. We can do all of this. What we haven’t been good at is commercialising those opportunities. That’s what this is about.
Federal Minister for Industry and Science Ed Husic elaborated, stating “we’ve got all these resources, and yet, we do not extract the greatest value out of the battery value chain”.
“If we get the battery value chain right in this country, it could create up to 60,000 jobs,” he claimed.
Much of this mirrors the views of Tesla and Technology Council of Australia chair, Robyn Denholm, who last year told the National Press Club that: “Australia should aim to do the refining, the battery cell manufacturing, and the vehicle manufacturing”.
As noted here, Harvard Business School’s Economic Complexity Index (EDI) found Australia has slipped from a ranking of 60 in the world in the year 2000, to 91st in 2020. Countries improve their ECI by increasing the number and complexity of products they export.
In its submission to the NRF discussion paper, the Electric Vehicle Council said Australia was well-positioned to capitalise on growing demand for critical minerals with its deposits of lithium, nickel, and other key minerals required for EVs and clean energy.
“However, to fully realise the economic opportunities provided by the energy transition, it is important for the country to expand its focus to include downstream opportunities in refining, processing, and manufacturing of battery components and vehicles, which is currently dominated by other players,” it added.
The lobby group adds that the NRF’s goal must be to create a local environment that attracts investment “across the full EV value chain” from mineral extraction and processing to battery manufacturing, and eventually electric vehicle manufacturing and assembly.
What do you think? Is it a good thing that the Australian government wants to grow local manufacturing and development, including the automotive sector?
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