The British billionaire who saved South Australia's steelworks believes the state could once again manufacture cars.
Sanjeev Gupta said the fact Australia had ceased traditional auto production leaves it well placed to build the next generation of electric cars.
"The biggest inhibitor to this technology is existing production, in a country where there is car production you will have to basically kill that production," Mr Gupta said.
Traditional car manufacturing would be disrupted by the small-scale production of electric cars, thanks to improvements in manufacturing costs and the use of generic components across a range of vehicles, the business leader said.
"The fact that the car industry in Australia has died is an opportunity," he told a business lunch in Adelaide on Friday.
The South Australian government recently revealed Mr Gupta was in talks to buy equipment from the former Holden plant in Adelaide in a bid to turn it into a base for making vehicles.
"People say Australia is a small market. It is not a small market, it is 23 million people, which is going to double over the next few decades," he said.
"It's a big market for cars."
His potential investment came after his company, GFC Alliance, bought the struggling Whyalla steelworks in regional SA last year.
Pledging to spend $1 billion revamping the site, he said he wanted to lift production by 50 per cent to 1.5 million tonnes a year.
Mr Gupta also invested in renewable energy in SA and raised the possibility of new port facilities, mining activity and the development of pumped hydro and solar power plants to lift energy production.
Australian Associated Press