Of EVS, price cutting, and CD players…
Electric vehicles have certainly become the flavour of the month, with both BMW and Renault announcing they will be importing full plug-in EVS (see page 12) following the Government’s announcement of mild incentives – but pricing still remains a major obstacle to widespread adoption of the new technology against a background of massive price cutting in the rest of the motor industry. This time of the year there are always good deals to be had around Fieldays, but it started early in New Zealand in 2016, with just about everybody offering some sort of “special” price to get people into their vehicles from the beginning of the year, and some even before that.. However, the best deal is not necessarily the one that’s posted on a website or advertised on TV or in mainstream media, and, as Lance Manins of Driveline Fleet points out in our Finance and Leasing feature on page 32, the best deals for businesses, especially in the long term, are often those cut by leasing companies leveraging their special relationship with the importers. I can’t help thinking that some of what’s going on out there at the moment is what I call “retail thinking”, chasing a quick buck with no regard for what’s going to happen further down the track. It’s what too many people do in a buoyant market, trying to whip off the cream without worrying about what happens when the bubble bursts, or at least starts to leak, and they have to go back to what they should have been doing in the first place, only to find that those who carried on doing business properly have leapt away and cemented their positions at the top of the tree. At media briefings and press launches of new products we are often told “we’re not chasing fleet, we’re aiming at the private buyer”. This is a good example of what I’m talking about here. Why would you spend all your effort chasing 30 percent of the market, because that’s what the “private buyer” represents, when a little more effort can help you to reach ALL the market? That’s like aiming for the clouds instead of the Moon, and finding yourself ending up down in the cow paddock. Which brings us back to the EV discussion. I’ve been accused of being a petrolhead who is anti-electric, but nothing could be further from the truth. Two of the most interesting vehicles I tested last year were the Mitsubishi Outlander PHEV – plug-in hybrid – and the BMW i3 EV with range extender. I loved the raw power under acceleration, and I liked the idea that I could recharge their batteries at much lower cost than putting in petrol or diesel fuel. I’d love to get my hands on a Tesla S, especially one with the Ludicrous option, and frighten myself silly in near-silence, or hot-foot it in a BMW i8. So what am I? Well let’s put it this way, I’m not an early adopter. I’ve seen too many new things come to nothing, and although I know EVS may be the future, the future is not here yet. Remember how much you used to pay for a CD player? Early adopters quickly found not only did they pay a lot for them, but they were quickly superseded by newer, smaller, and better versions – at much lower prices than they paid. You couldn’t give away a used one, and these days you’re only likely to buy one so you can rip your CDS and turn them into MP3S that you can listen to on your phones, ipods, and the like. It’s the same with electric vehicles. At the moment EVS are horrendously expensive to buy, and this in turn embitters the value proposition, because the total cost of ownership is much higher than an equivalent petrol or even diesel vehicle, even though the cost of electric power is much lower, (although it might not be such a good deal if it carried the same sort of taxation as petrol and diesel). Much of the cost of EVS is in the batteries, and I know there are legions of scientists and other technical boffins working flat-out to bring down not only the cost, but also to increase battery life, cut recharging time, and increase battery capacity. Eventually they’ll succeed, and electric vehicles will become a thing not just of the future, but of now. That is, of course, unless something else comes along to make plug-ins with batteries obsolete – such as hydrogen power driving electric motors via fuel cells – in which case your EV might metaphorically morph into a CD player!
John Oxley