How Australia could have been building its own EVs - if it wasn't for a major government error

An ex-cabinet minister has argued Australia could have been making its own electric vehicles if manufacturers had been given more support from the government.

Former Labor industry minister Kim Carr, who is now a professional fellow at Monash University, said an all-electric Holden Commodore could have been made locally.

His comment comes as Australia becomes increasingly reliant on overseas imports with Chinese cars now accounting for 80 per cent of Australia's EV market. 

Mr Carr said vehicles, such as a hydrogen-powered Toyota, could have been made if car manufacturing still existed in Australia with government subsidies.

'There's no doubt in my mind we could have been building hydrogen cars,' he told Daily Mail Australia.

'The industry would have evolved as we set the foundations for that evolution. There was actually a green car innovation fund project to produce an electric Commodore.'

Manufacturing the vehicles would only have come at a cost to taxpayers of $300million a year. 

Mr Carr argued things would have been very different if the former Coalition government a decade ago hadn't complained to General Motors in the United States about the cost of keeping Holden as a local manufacturer.

In December 2013, recently elected Liberal prime minister Tony Abbott said he wanted Holden to stay in Australia, but added his government would not 'chase them down the road waving a blank cheque'.

On that same day, Holden chief executive Mike Devereux told a Productivity Commission hearing the GM offshoot was unsure about its future in Australia but wanted to stay.

But Mr Abbott said Australia's former carmakers and unions were to blame for the demise of the local manufacturing industry.

'We would still be making cars if the car companies had better integrated their local operations into their global ones, and if unions hadn't been so bloody minded about productivity improvements,' he told Daily Mail Australia.

'There is sometimes a case for doing marginally uneconomic things in the overall national interest, especially with defence industries, but the Labor idea that we can subsidise our way to prosperity is simply crackers.'

A decade ago, Toyota manufactured a petrol-electric hybrid Camry sedan in Australia, with subsidies from the federal government's old green car innovation fund, as it exported more cars from Melbourne than it sold locally.

'It was a highly successful export industry,' Mr Carr said.

By October 2017, Holden made its last car in Adelaide, a year after Ford and Toyota closed their Victorian factories.

'It's a shocking, shocking loss of national sovereignty,' Mr Carr said.

Mr Carr, who was aligned with the Australian Manufacturing Workers Union as a Labor senator for Victoria, rejected the notion car plant workers in Australia had been overpaid.

He said that back in 2013, when he was still a cabinet minister, car plant workers were paid an average of $70,000 which at the time was below the average, full-time salary of $74,760, citing departmental data when he was minister.