Australia's high-cost economy and small market potential provide a sobering reality to the Greens' policy to encourage the production of electric cars, according to economy and manufacturing experts.
However they say the nation's high rate of education and pollution-conscious population offers an ideal platform to construct technological components for modern electric vehicles.
Speaking at a press conference in Adelaide last weekend, party leader Senator Dr Richard Di Natale proposed five years' free registration for car owners who purchase electric vehicles as an incentive to drive the economies necessary in the industry.
"We need to do what we can to support electric vehicles in Australia and to create the jobs that come from that here in South Australia," he said.
This follows the idea put forward by SA Greens Senator Robert Simms and his Victorian counterpart, Janet Rice, to respond to the decline of car manufacturing plants in each state by transforming to producing electric cars.
Mr Simms said their bill before the Senate, the Automotive Transformation Scheme, could encourage electric car production in South Australia and Victoria.
"There was about $800 million that was allocated under the previous Gillard government and our bill is designed to ensure there is support being provided to kick start electric car manufacturing," he said.
This issue is particularly significant in Mr Simms' state, South Australia, where the closure of the Holden Elizabeth plant will result in the loss of hundreds of jobs, while also capitalising on electric car production.
"This would be a way of trying to ensure that Australia is moving in to that space," he said. "It's actually a $500 billion industry internationally, yet South Australia doesn't play a role at the moment."
Dr Matthew Doolan, a senior lecturer at the ANU and an expert in manufacturing processes, innovation and technology adoption, said Australia's potential as an electric car manufacturing nation would suffer from similar challenges that depleted the automotive industry.
"We're a relatively small market in Australia and I think any vehicle manufacturer has to be a global vehicle manufacturer."
Despite automotive construction sites already existing in South Australia and Victoria, he said the transformation from producing traditional vehicles to producing electric vehicles would be significant.
Because Australia is a high-cost economy, the manufacturing potential of electric cars is more aligned with the technological assets such as the control and drive systems for electric motors.
"The bits like making doors and panels and those sorts of things you can do just as easily in a low cost economy," he said.
Organisational economics expert at the ANU, Professor Kieron Meagher, said the manufacturing potential of electric cars would depend on low wages and being geographically positioned to minimise transport to areas with high market possibilities such as Europe, America and central Asia – both not applicable to Australia.
Considering the risks and the recent struggles of manufacturing cars in Australia, Professor Meagher said it would be more beneficial to focus on manufacturing a range of smaller industries to minimise risk.
He said this would be more suitable to Australia's high rate of education and access to innovative technologies.
"We don't have a huge local market so you have got be selling to a global market and what we have is higher educated workforces and better infrastructure, not cheap wages and a massive scale [of market potential]."
"It's a big gamble, and when you're gambling it's better to take a lot of small bets and win on average than put all your money on one horse and run the risk."
ANU Senior lecturer in renewables and energy storage Evan Franklin believes Canberra is perfectly positioned to become the country's electric car capital no matter where they are made.
He said the fact Canberra was a renewable energy leader and a compact city were two reasons why EVs could really take off in future in the territory.