Climate activist Mike Cannon-Brookes backs a tiny startup with an ambitious, world’s first approach to getting more EVs on the road…fast.
How do you grow a national electric vehicle (EV) market with few government incentives while there is a conventional car industry that has all the tax advantages on its side?
That was the question confronting three environmental scientist friends in Australia in 2019, depressed after the re-election of the climate-denying federal government of former Prime Minister Scott Morrison.
Three entrepreneurs, a good car company and one big idea
With zero climate change leadership from the government at the time and transport emissions rapidly increasing, Anthony Broese van Groenou, Anton Vikstrom and Sam Whitehead decided it was time to take action.
So began the Good Car Company – possibly the world’s first social-enterprise-as-EV-importer, now in its third year of operation and recently marking its 500th imported, second-hand EV to Australia.
Challenging Australia’s anti-climate biases
With the average new imported EV costing over 50,000 Australian dollars (US$32,500), affordability was a major obstacle to market growth when the Good Car Company team started out. Another was the lack of a national fuel efficiency standard. Other than Russia, Australia was the only Organisation for Economic Co-operation and Development (OECD) country at the time not to have one or be in the process of developing one. The conventional car industry had little incentive to offer cleaner, more efficient vehicles, let alone affordable EVs. Add to that generous tax exemptions for four-wheel-drives and other utility vehicles – that meant gas guzzlers cost half the retail price when owners wrote them off as a business expense.
To the Good Car Company team, it felt like the deck was stacked against building a market for EVs in Australia.
The three friends wanted change fast and, initially, thought about converting standard gas-powered cars to electric. They soon discovered this took a lot of work and was not scalable. Instead, they came up with a ingenious solution:
It felt like the deck was stacked against electric vehicles in Australia.
“The simplest thing was to find used EVs from overseas and bring them over,” said Good Car Company co-founder Broese van Groenou.
Enter Mike Cannon-Brookes
The genius of this cheap, simple sales idea caught the attention of perhaps the world’s most innovative climate solver with money to burn, software billionaire Mike Cannon-Brookes. Last week, the founder of Atlassian, announced he was was putting AU$10 million (US$6.53 million) behind their venture through his private climate action foundation, Boundless Earth. The company can now hire more people and import and sell another 2,000 used EVs from Japan, mostly Nissan Leafs, for between AU$20,000 and AU$40,000 (US$13,000 and $26,000), depending on their size and range. With the help of Cannon-Brookes, the founders estimate a tenfold increase in EV imports, potentially reaching 200,000 by 2025, as long as the overseas supply of used EVs holds out.
Read our recent story about Mike Cannon Brookes: Capitalism in the right hands: How a tech bro rewrote Australia’s climate future.
Pitch perfect timing.
All the stars are aligning for Good Car. Like the rest of the world, gasoline prices are soaring in Australia and so too is interest in renewable energy vehicles. Also, things have improved politically. A new, more climate-focused federal government was elected in May, quickly passing ambitious climate policy and foreshadowing a new fuel efficiency standard.
Electric cars for the masses
It’s one thing to import cheap electric vehicles, but Good Car had another challenge: How can you make EVs more accessible to lower-income household? In 2020, the team came up with a unique idea to reach a broader market: They went local in their home state of Tasmania and launched the world’s first community EV bulk-buy scheme.
The idea was to find large volumes of used cars in Japan (right-hand drive, low mileage and good quality). Then, through a bulk purchase for a specific community committed to buying in, they could leverage efficiencies of scale to spread the costs and risks associated with bureaucracy and shipping.
It did not take long for word of mouth to spread. The team was immediately swamped with interest. The first bulk buy of 24 Nissan Leafs quickly sold out fast, even with buyers having to put up half the final cost of the car upfront, sight unseen. The company also learned a lot about how to get a wider and often skeptical market comfortable with the idea of buying EVs. The key to success was test driving, backed up by online Q&A sessions that helped settle people’s nerves about charging and range.
“It was the community doing it more than us.”
The hands-on experience of test driving was very important,” “Then it came to the peer effect of friends talking to friends and neighbors talking to neighbors and just seeing that there are EVs out there and they’re doable and affordable,” says Broese van Groenou. “It helped bust a lot of myths out there and built a lot of trust. It was the community doing it more than us.”
With the funding from Cannon-Brookes, the team can now pre-purchase larger numbers of new and used cars, eliminating the need for car buyers to make big upfront deposits.
“It de-risks it a lot for people, and we’re also able to put more money into test drives and education,“ Broese van Groenou says.
Now the government likes EVs
Local governments around Australia are now starting to get behind the idea and are putting attractive incentives on the table for their residents.
In Sydney, one progressive suburban council recently launched a community bulk-buy scheme with the Good Car Company, offering purchasers an AU$1,500 (US$970) subsidy per car. The Randwick City Council also provided local businesses and residents rebates of up to AU$5,000 (US$3,237) for installing EV chargers in their homes, apartment buildings or businesses.
Hundreds of people have expressed an interest, and the Randwick Council operation is set to be the company’s most successful bulk-buy yet.
“It’s a big shift away from the big, centralized monopolies for power, transport, energy and even finance.”
Big, big ambitions
For a little outfit, the Good Car Company has enormous plans.
“Our ambitions are now much, much greater,” says Broese van Groenou. “We’ll be working with government future funds, superannuation (retirement) funds and Green Bonds. In reality, we need a billion dollars to make this work properly and […] have social equity and environmental equity baked into our DNA.”
With that, they want to “become an entire supply chain,” Broese van Groenou said that hat encompasses everything from manufacturing batteries from scratch in Australia and recycling old batteries into storage units to back up household solar to international logistics and everything in between. It’s a vision for decarbonizing a nation of households with EVs as mobile power storage units.
“That’s the most important aspect of EVs – they can decarbonize the grid because they provide the storage,” he said. “Then we can have gigawatts of dispatchable power that’s just aggregated through all the community members – that’s the support we need for the intermittency of wind and solar.”
Similar thinking is taking place in other countries. The recently passed Inflation Reduction Act in the United States creates incentives for EVs and EV charging as part of the national infrastructure. It also incentivizes the market for used EVs, which is expected to speed up the country’s fleet transition at all socio-economic levels. Germany, the Netherlands and France have all established subsidy schemes for used EVs as part of their efforts to transition from combustion engines.
In sorting out the EV challenge in Australia, the Good Car Company team is also taking on fossilized business methods.
“It represents such a massive change – especially when you can have business models that reward people [for participating],” said Broese van Groenou. “It’s a big shift away from the big, centralized monopolies for power, transport, energy and even finance. Brilliant shifts.”
With massive growth plans and transformational thinking, Australia’s Good Car Company really is the little EV car company that could.