Government and big business are buying into electric cars

by Rebecca Howard / 07 November, 2017
RelatedArticlesModule - Electric cars

Photo/Henrik Moller

Thousands of electric cars are plying New Zealand roads as prices and practicality drive them into a fast-expanding market.

The number of electric vehicles on New Zealand roads is rising fast as they become more affordable and ­reliable and Government agencies and big companies buy into the technology.

The latest Ministry of Transport data shows the electric-vehicle fleet more than doubled in the past year: 4567 light electric cars were on the road in August, up from 1869 a year earlier.

“It is a reasonably small proportion of the market, but the interesting story is how quickly those numbers are growing,” says Brent Lewers, principal adviser at the ministry.

Affordability is an important ­consideration for buyers. According to Lewers, about three-quarters of the vehicles being sold are used imports, and New Zealand buyers are benefiting from government subsidies in markets such as Japan. Of 2045 EV registrations so far this year, only 222 were new vehicles.

Among new cars, a base model full-­electric Hyundai Ioniq has a suggested retail price of $59,900, according to a dealer, and Tesla’s Model S 75D will set you back $148,000, with upgrades ­including “full self-driving capability”, although with the caveat that it is dependent on extensive software validation and regulatory approval.

Tesla Model S.

Tesla Model S.

Used, however, a 2011 Nissan Leaf that has done 33,000km has a “buy now” of $10,500 on Trade Me and a 2016 model is about $26,000.

Vector chief networks officer Andre Botha says with countries such as the UK, Netherlands and France set to ban petrol and diesel new-car sales, “we expect the industry will respond with greater production, lower prices and more choice, which will dramatically increase EV demand”. The New Zealand second-hand-car industry is likely to see more EV imports as a result, although the flood of used petrol and diesel vehicles may also rise, he says.

Lower running costs are a major ­drawcard: the outlay for charging an EV is the equivalent of buying petrol for 30c a litre. According to a Government information site, “the cheapest and easiest way to charge your EV is by plugging in overnight at home” through a standard power point or into a home-charging station.

EV drivers can also relax a little about range anxiety as battery life improves. Depending on battery size, an EV will now take you 120-450km on a charge, ample for daily commuting, which for the typical Kiwi is about 30km, according to Government data.

Dyson gets involved

British investor James Dyson last month announced plans to build a “radically ­different” electric car by 2020, according to Bloomberg. He’s investing about US$2.6 billion ($3.6 billion) to develop the car and the solid-state batteries that will power it in place of standard lithium-ion batteries.

New Zealand cities also now boast standard- and rapid-charging stations, which can revive a flat battery in a matter of minutes. The so-called “electric highway” includes 634 charging stations, according to data from plugshare.com, extending from Invercargill almost to Cape Reinga.

Nissan Leaf.

Nissan Leaf.

Also in EVs’ favour is that their engines have only about 20 moving parts versus the 2000 of a petrol or diesel engine, so maintenance costs are slashed and fumes and noise eliminated.

More broadly, there’s the climate-change impact. Lewers says New Zealand is well suited to going electric as about 80% of power generation comes from renewable sources, “so we can get a significant reduction in emissions”.

Corporates are getting in on the act, too. A number of companies have ­committed to having at least 30% of their fleet vehicles electric by 2019, including Air New Zealand, Fonterra, Spark, Contact Energy, Xero and Vodafone. Air New Zealand says it has switched more than 75 vehicles in its light-vehicle fleet to electric models.

Incentives to switch

The Government has set a target to double EV registrations each year to reach 64,000 by the end of 2021, and has offered a series of perks, including road-user charges exemptions for light vehicles until the end of that year. It recently announced that heavy EVs would also be exempt from road-user charges until they make up 2% of the heavy-vehicle fleet.

According to the Ministry of Transport, there are 75 heavy EVs in New Zealand, most of which are trolley buses on the streets of Wellington. However, it says that number is expected to increase over the next few years as battery technology improves.

On another front, as of September, EVs are allowed to use 11 priority bypass lanes on state highways in Auckland for a 12-month trial.

One deterrent, however, is battery replacement cost. A new power supply for a Tesla Model S, for example, is put at about $35,000, and for a Nissan Leaf about $7700, according to an Energy Efficiency and Conservation Authority study. The report notes, however, that costs are coming down fast, and even if a battery replacement is necessary, the car retains its value.

A potential downside of widespread EV adoption could be strain on the national power grid. However, Lewers says electricity companies are looking to keep ahead of demand. For example, they are offering cheaper rates for off-peak charging and are looking to stagger charging times. That would mean cars were using available capacity without the need for additional generation to be built, he says.

This article was first published in the October 14, 2017 issue of the New Zealand Listener.

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