Safescape is testing a prototype electric-powered mine vehicle capable of dramatically slashing worksite greenhouse gas emissions and parts for the game-changer fill its Golden Square premises.

It is a promising time for the company and wider electric vehicle industry but a new paper by Canberra-based think tank the Charmichael Centre may push hopes a little too far, founder and managing director Steve Durkin says.

"If the question is 'is it realistic for Australia to have a large scale automotive manufacturing industry?', then my gut feeling is that the horse has probably bolted on that," he said.

The newly-released report urges governments to offer overseas manufacturers tax incentives to set up major operations in Australia after concluding the nation risks losing its advantages in global race to electric vehicles.

Contrary to popular belief, not all Australia's car manufactures have collapsed in recent years, the report's lead author Mark Dean said.

"Thanks to the resilience of our remaining automotive manufacturing supply chain, a surprising amount of auto manufacturing work - including components, specialty vehicles, and engineering - still exists here," he said.

It means Australia would not be starting from scratch if it was to decide it wanted to become an electric vehicle powerhouse.

But it would have a long way to go and would need "significant" government support, Dr Dean warned.

"No nation builds a major industry without its government taking a proactive role," he said.

The Carmichael Centre's paper notes that manufacturers were the driving force of Australia's economy in the 20^th century.

When Holden's last fully assembled car left a South Australian production line in 2017 Australia had no coordinated response to deal both with industry closures and the rise of electric vehicles, the paper stated.

"Moreover, the COVID19 pandemic further exposed the gaps in our supply chain, and highlighted a concerning dependence on imported manufactured equipment," it noted.

Tax incentives for overseas manufacturers was one of a slew of options put forward in the Charmichael Centre paper.

Other ideas included tax incentives for miners digging for lithium and rare earths, new procurement requirements to electrify government road fleets and an electric vehicle manufacturing commission.

Mr Durkin doubted governments would get excited about the prospects of large scale automotive revivals in Australia and noted some had been reluctant to impose the strict emissions standards seen in other countries.

"There would need to be a huge amount of base level work done before governments put any serious investments into attracting big electric vehicle manufacturers," he said.

"Honestly ... I don't see value in that. For a start, it would say to all the smaller niche manufacturers that they don't get any help but these other guys will get free rein.

"And the reality is that these large overseas manufacturers often don't pay taxes in many countries they are operating in anyway."

That said, Mr Durkin agreed with report authors that government support would be vital to Australia's emerging electric vehicle industry.

"It certainly does make sense for us [Australians] to look at the opportunities for niche manufacturers, and really try to foster that for innovation and skills in our country," he said.

That could include Safescape's prototype 'Bortana' trucks.

Bortanas are the latest niche vehicle assembled in Bendigo, a city that also builds the Thales Group's Bushmaster and Hawkei defence vehicles.

The four-wheel-drive style Bortana truck is about the same size as a Toyota Landcruiser, can carry up to two tonnes and be used in underground mines to move people and equipment.

Bortanas could help mines dramatically slash carbon emissions - and not just because it would reduce the number of onsite vehicles using diesel fuel.

Taking diesel-fueled vehicles out of mines would reduce the amount of energy needed to pump fresh air underground, Mr Durkin said.

"Essentially, the average Australian mine uses 10 times the amount of energy to ventilate a diesel vehicle underground as it does to drive it," he said.

Safescape is preparing test vehicles to be rolled out to mine sites from April.

Should testing prove a success, Bortanas could become vital for a host of mining giants that have pledged to reach net-zero emissions by 2030, Mr Durkin said.

Commercial production could begin by the end of 2022.

"It will be small-scale to start with, and perhaps 50 a month in a few years. So it won't be huge volumes but will be an important niche market," Mr Durkin said.

Below: The Carmichael Centre's new paper: