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There is "no reason" why Australia can't build electric cars, or else leave a "vulnerability" open to China and the rest of Asia, the Prime Minister has reportedly said.
Electric Cars
Prime Minister Anthony Albanese has expressed a desire for car manufacturing to return to Australia – with an electric twist – lamenting the end of locally-made Holdens as "a pity".
It follows a call from Chinese car maker Chery for the Federal Government "modify ... policy" to allow local manufacturing of new cars to become economically viable again.
Albanese said at a News Corp Australia event, according to the Herald Sun, that "there's no reason why we can’t make [electric] vehicles."
"At the very least, we can make parts and components, including batteries here. Indeed there are companies looking at doing just that."
Australian car manufacturing came to a close in 2017, and it has become little less expensive to construct and run a factory, employ staff, and build a car on local soil since then, with or without government backing.
Figures cited by Ford at the announcement of its closure in 2013 placed manufacturing cars in Australia as twice as expensive as Europe – or four times the cost of Asia.
Albanese, however, is quoted as claiming "new technology" could make it more affordable to produce vehicles in Australia.
"We saw a decline of manufacturing in Australia because of differential labour costs. New technology means that labour is less important than transport costs," he reportedly said. "Because technology is ubiquitous, it’s available everywhere."
The Prime Minister reportedly named the decline in manufacturing of products in Australia as a share of GDP – from 14 per cent in 1990 to 5 per cent in 2025, as cited to the Herald Sun – a "lesson in dependence".
"We stepped back, the United States did as well, and we saw manufacturing go largely to China and Asia. That creates a vulnerability, and we need to use the capacity that we have to make more things here," Albanese is quoted as saying.
Asked which Australian-made products he wishes still existed, Albanese named two Sunnyboys ice block flavours, before adding: "And it’s a pity we don’t have Holden cars anymore."
While there may be a desire to again produce cars in Australia, it is not as simple as reopening a dormant factory.
The high cost of labour compared to neighbouring countries has long made it difficult to justify significant funding to keep manufacturing facilities open – some of which was cut in the months before Holden and Toyota's exit announcements.
In recent years, free-trade deals signed with popular nearby car-making nations such as Japan, South Korea and, in particular, China – where many of Australia's cheapest cars are now made – have made imported vehicles even more attractive.
Much of the expertise once used for developing Ford Falcons has been moved to engineering Ranger utes and Everest 4WDs for more than 180 markets worldwide, while the likes of Premcar and Walkinshaw use local expertise to develop off-road versions of popular utes for local conditions.
Walkinshaw – the former engineering firm behind Holden Special Vehicles (HSV) – also 'remanufactures' full-size Ram, Chevrolet, and Toyota pick-ups from left- to right-hand drive for local sale, at its facility in Melbourne (below).
"Australia has too many car manufacturers, because based on the market size, I think they should have one factory or some different factories. But I think, today … most of the factories, later they are dismembered," he said.
"Time by time, our chairman has also asked me to lead the thinking if it is possible we can make the factory return back again or something."
"The cost plus the tax or something is a big difference, so I think it's difficult. This is something, maybe, the government's side need to consider.
"Why is there cost? Because, for the car manufacturer, they need a line that is very long, the channel is long, and also concerned about the component side. Also, too many people involved.
"I think Australia, the cost for the people is also not easy."
The executive suggested greater use of robots could reduce the need for humans on the production line, and make Australian production more competitive.
"Maybe in the future, when more and more robots can be working in the production line, and maybe the government need to modify the policy, I think the factory comeback is maybe also possible," said Zhang.
"But I think this is not dependent on one car manufacturer. I think it needs the whole system together, thinking it."
Alongside the likes of Premcar and Walkinshaw, firms such as Victoria's Applied EV have received government funding to develop autonomous electric vehicles, though it lacks the scale of a major car manufacturer.
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Alex Misoyannis has been writing about cars since 2017, when he started his own website, Redline. He contributed for Drive in 2018, before joining CarAdvice in 2019, becoming a regular contributing journalist within the news team in 2020. Cars have played a central role throughout Alex’s life, from flicking through car magazines at a young age, to growing up around performance vehicles in a car-loving family. Highly Commended - Young Writer of the Year 2024 (Under 30) Rising Star Journalist, 2024 Winner Scoop of The Year - 2024 Winner
