Inquiry into the transition to electric vehicles

Kevin Cox
2 min readMar 21, 2024

The following is a submission to the Australian Government Inquiry on the Transition to Electric Vehicles.

Australia has successfully built rooftop solar by mobilising local capital and community buy-in through government incentives and making local ownership of renewable energy production possible. The government can achieve the same result for electric vehicles. The challenges are not technical but ownership and financial. This paper outlines how to fund electric vehicles and the new infrastructure they need with existing local capital and encouragement from the government.


In 1980, 70% of housing finance was supplied by Credit Unions and Mutual Funds. Most loans were of existing money to transfer existing assets. Today, the big four banks supply 90% of housing finance with bank loans. Bank loans are new money that is used to transfer old assets. Before the banking reforms of the 1980s, the Reserve Bank limited the amount of new money that could be used to transfer old assets.

With new money, a Bank destroys its repaid capital and keeps the interest. With old money, the money goes back to the depositors. The change looked similar to depositors and borrowers. Unfortunately, the emergent properties were that bank shareholders made a larger profit, depositors received less interest, and housing prices increased. The result was a substantial decrease in capital productivity because new capital was not used to produce new assets.

There is a solution.

Community Banks can come to arrangements with local communities and dramatically increase capital productivity using Permanent Home Markets.

Permanent Home Markets release Capital, meaning the need to destroy capital with repaid bank loans disappears, and new money becomes available for investment.

The same approach can be used with Permanent Vehicle Markets. They remove the cost of debt finance and can funnel the released profits into more investment in electric cars, taxis, buses, trucks, and infrastructure.

The approach will increase Australian Productivity by releasing money tied up in unnecessarily expensive assets (without dropping their price) for investment in new productive capacity. The profits from finance will stay in Australia in local communities as high returns on superannuation investments and lower car operating costs. The increased capital productivity will reduce inflation and allow the Reserve Bank to target zero inflation.

There will be a change in the Australian Vehicle Markets as consumers move to Permanent Vehicle Markets.

We can use agent-based models to show how it works, fine-tune the introduction of Permanent Vehicles Markets, and recognise and reduce emergent anti-social behaviours. However, as with solar panels, it will not happen without government support and control to ensure Permanent Vehicle Markets behave as markets that encourage competition and choice and reduce the cost of owning and operating a vehicle.



Kevin Cox

Kevin works on empowering individuals within local communities to rid the economy of unearned income.