Australia’s growing electric lawn-mower market has been driven by a shortage of land and the cost of installing batteries, a major hurdle for manufacturers who are still grappling with the challenges of building the massive battery infrastructure needed to meet demand.
The industry is also experiencing a number of challenges, including supply chain issues and competition from electric lawn care products from overseas, but the government has also been looking at ways to ramp up supply and lower prices, particularly for small-scale projects.
Here’s what you need to know about the industry and the potential impact on Australia’s electric lawn business.
The government announced its decision to introduce a tax on electric lawn equipment on Thursday, raising the GST rate from 4.5 per cent to 5 per cent, or $15 to $20 per kilowatt hour (kWh).
While the new rate will put a dent in the market for electric lawn furniture, it will also have a major impact on the supply chain.
Electric lawn furniture is often built using a combination of lithium ion batteries and a capacitor, which is made up of an insulating material and an electrochemical reaction that generates a magnetic field.
This results in an electric current that drives a motor that can move the lawn mowers.
While lawnmower makers have tried to reduce costs by using a mix of battery modules and solar panels to generate electricity, the cost and size of the manufacturing process have been a stumbling block.
In an attempt to solve this, the Australian Competition and Consumer Commission (ACCC) has proposed a new levy on electric power systems that generate excess power from the electricity grid.
This levy would apply to a range of equipment from electric power generators to inverters and inverter modules, with the GST collected on the amount of electricity generated.
It would also apply to large-scale power generation and transmission projects such as gas turbines.
As part of the new levy, the government is also proposing a range to the value of the equipment that is sold.
The Government will set a limit on the value the government collects on equipment purchased over $500,000.
According to the ACCC, this limit is a way to address the issue of over-supply in the residential electric market.
Under the new GST, electric lawn products would also be taxed on the cost they generate, meaning manufacturers will be able to charge a higher price than before.
The new tax would also put a cap on the GST on sales of electric lawn accessories to residential consumers.
Some of the items that will be taxed under the new tax are the following:Electric lawn equipmentThe value of electric mowers, rakes and wheelchairs (up to $15,000)Electric mowers that are sold in Queensland, New South Wales, Victoria and Western AustraliaElectric mower units that are imported to AustraliaElectric lawn mow units manufactured outside AustraliaElectric rakes or wheelchairs that are manufactured outside QueenslandElectric mow mower parts sold overseasElectric lawn machinery that is manufactured outside New South AustraliaElectric appliances that are made outside New ZealandElectric lawnmow accessories manufactured outside of New ZealandThe GST will be applied on all items of property valued above $500K.
The Government also announced that it will introduce a rebate on purchases of electric equipment from domestic manufacturers that generate less than $10,000 in revenue.
This will be capped at $5,000 for electric mower and $3,000 per month for electric rakes.
For more information, please visit the ACCC website.
What are the implications for the electric lawn industry?
If the GST increases, then consumers could pay more for electric energy in the long run, but it is unlikely that will have much of an impact on lawnmowing sales, since many domestic companies are already producing electric lawn chairs and rakes for home use.
However, the Government is proposing to increase the GST by a further 2 per cent on all electric equipment sales, which will make the tax increase significantly more expensive for the average Australian household.
If prices remain low for the next three years, then it is likely that the electric mowing industry will be left with a shortfall.
Despite the Government’s decision to boost the tax, there is still a long way to go before Australia becomes the second largest producer of electric power in the world.
Source: Australian Government via Al Jazeera