There's an easy way to reach NZ's EV target - but you might not like it

Monday, 4 February 2019

Pure-EVs are a small part of NZ's electrified vehicle fleet - but there's still a lot of choice.

OPINION: So much talk about how to grow New Zealand's Electric Vehicle (EV) fleet.

So much angst about the recent (sic) realisation that the Government will fail to hit its target of 64,000 EVs on the road by 2021.

To that, I'd have to say… well duh.

Meeting that target requires the number of EVs to double every year. That's been happening since 2013… except that doubling a big number is much more difficult than doubling a tiny number. Who'd have thought?

**READ MORE:

* Can you charge an EV anywhere in NZ?

* How much could an EV cost to run in NZ?

* Best selling 'electrified' cars in NZ**

If NZ is to seriously expand its EV fleet, pure-electric cars need to be cheaper than equivalent petrol or diesel ones.

Actually, 64,000 is only about 1.5 per cent of NZ's total fleet and there's a really easy way to achieve or even greatly exceed it. But most of you might not like it.

Used-import Nissan Leafs have done a job in boosting the EV numbers quickly, but that's not the answer.

Battery technology is moving at a huge pace and besides, don't you want the most modern cars with the longest shelf life on the road?

Dramatically increasing the EV share of the new-car market will mean more used cars available for longer periods in the future; whereas a five-year-old imported EV is already a long way through its useful life.

EV technology is rapidly improving, but they still don't go as far as ICE vehicles. Why pay more to get less?

There's only one way to boost the new-car market for EVs: they have to be cheaper than Internal Combustion Engine (ICE) vehicles. Simple.

If Norway is the way

Norway seems to be the guiding light for NZ's EV aspirations: similar size (population 5.4m), similarly clean electricity and yet a new-car market that's 30 per cent zero-emissions (or nearly 50 per cent plug-in overall).

Incredible… or not so incredible when you consider that EVs are favoured in Norway's tax structure to the point where they are cheaper to purchase than equivalent ICE models.

Norwegian EV owners are also exempt from road tax, tolls, many parking fees… it all adds up to drastically reduced running costs.

You can't argue with that. Although you could point out that it's partly funded by Norway's oil production; or that 70 per cent of Norway Electric Vehicle Association members also have a second ICE vehicle, presumably for longer trips.

Perhaps that's because the used values of such vehicles have collapsed in this EV-centric market, making them more attractive to keep - or just cheaper to buy. But still, they exist and are presumably put to work.

Proof that even in Norway, nothing is clear-cut.

A Hyundai Kona Electric is thousands more expensive than a normal Kona. That's a problem.

Except for this one thing: if EVs are cheaper then ICE cars, lots and lots of people will buy them.

The price isn't right

To quote somebody in the Kiwi motor industry who would not want to be named: 'If I offered you a mobile phone that did a particular job, then showed you one that did basically the same job but only lasted half as long… then that second one should be cheaper, not more expensive.'

That's the situation EVs are in. They're more expensive to make than ICE cars but in the cold light of day are simply not as useful.

They're cheap(er) to charge at home, but as we've said previously, it's possible that in the near-future an EV could cost as much as a petrol car to run in NZ with Road User Charges (from 2021) and more reliance on paid DC charging stations as battery power increases.

Making EVs like the VW e-Golf affordable is going to mean making ICE cars more costly.

While most modern EV models will do at least 200km on a charge, that's still less than half the range of an equivalent ICE vehicle (and you can't fill them up in five minutes). Some, like the Hyundai Kona Electric 64kWh can now crack 400km, but it costs $73,990 - many thousands more than any Kona ICE model. You can see the problem.

Even with the best environmental will in the world, cars are the second-most expensive thing most of us will ever buy (first for some people) and all car buyers want to feel like they are getting value for money.

Paying more for something that does less is a hard sell.

Opportunity cost

Government intervention is the answer. While it's a pleasant fantasy to think that incentives alone would do the trick, that's never going to happen. Let's say EVs need a $15k subsidy for price-parity with ICE vehicles; that's $750m to get another 50,000 EVs on the road. Taxpayers, who's keen?

So making EVs affordable will inevitably result in many ICE vehicles becoming more expensive, whether that's through a 'feebate' type system (where taxation is weighted on emissions) or something more simple and perhaps onerous.

It won't be enough to make EVs cheaper. To achieve EV progress in NZ, people will have to be dragged out of their ICE vehicles by their wallets.

And let's face it, at the moment EVs don't suit everybody, so there would be a lot of financial pain for this eco-gain.

Norway is removing many of its EV perks by 2021, although it also has an ambitious plan to be zero-emissions-only in its new-car market by 2025. It's likely that this transition will be partly achieved by even more extreme taxes on ICE vehicles.

Getting real

While we're having a little reality check, proposed bans on ICE vehicles (most coming into effect 2030-40) internationally are often cited as evidence that we'll all have no choice but to drive pure-EVs within a few years.

Seriously? Only Norway and the Netherlands have explicitly cited a desire for zero-emissions vehicles; both are small, wealthy countries that have made electric motoring a highly political issue.

Other countries (including the UK and France) have only specified a ban on petrol and diesel engines, but have remained conveniently unclear on what level of electrification is acceptable to escape it.

For example, under the UK's Road to Zero strategy, vehicles powered exclusively by petrol or diesel will be banned from 2040. But hybrids - even the ones without a plug - are not exclusively ICE.

There has been much discussion in the UK about which vehicles conform and which don't. Or whether there might be a rule about hybrids having to be capable of a certain distance under zero-emissions power to qualify.

Much discussion, but no actual confirmation.

With most of the global motoring industry embracing hybridisation (or 'electrification' as many call it) already for future models as a way to improve the efficiency of petrol powerplants, ICE engines are going to be around for many decades yet.