Slow electric car sales need kickstart
It’s time for the Government to change its stance on electric vehicles and offer financial incentives, writes
Japanese vehicle manufacturer Mazda raised a few eyebrows recently when it announced that when it begins introducing electric vehicles and other electric drive technologies from next year, it will only offer them to ’’clean’’ countries.
In a media release detailing what it calls Sustainable ZoomZoom, which is its long-term vision for technology development, the brand said it will only sell its EVs in regions that use a high ratio of ‘‘clean’’ energy for power generation or restrict certain vehicles to reduce air pollution.
On the face of things that’s a very big call, because all of the world’s biggest new vehicle markets are hopeless in generating power using renewable sources such as hydro and wind.
In USA for instance, only about 15 per cent of electricity is generated the renewables way. In Australia it is less than 17 per cent. Even in Mazda’s home country of Japan the figure is just 17.4 per cent.
In the fossil fuels-rich countries of Kuwait and Saudi Arabia no electricity at all is generated using renewables, and in the United Arab Emirates the figure is almost as bad at 0.23 per cent. Hardly high ratios.
So with that as background, New Zealand can feel rather proud that it is second-best in the world in the way we generate electricity. Hydro, wind and geothermal energy combine to produce 85 per cent of our power, with the remainder generated using gas and coal.
Our performance is not that far behind the top country, Norway, which generates 97.9 per cent of its power using renewables. Other countries that are performing well include Colombia at 82 per cent and Brazil at 81.2 per cent.
So does this mean we can feel all self-satisfied and now sit back and wait for car companies such as Mazda to come zoom-zooming to us with selections of brand-new fullyelectric and plug-in hybrid offerings?
The answer has to be no – because although we’re up close to Norway in generating our electricity the green way, we’re nowhere near matching the Scandinavian country when it comes to our takeup of electric vehicles.
In the past few days there’s been a fair amount of crowing over the fact that the number of electric vehicles on New Zealand’s roads has grown 2290 per cent since 2013.
The might sound impressive, but the actual number of such vehicles is 4500 – which is not many. Look at it another way: during August 331 EVs were registered – a pittance compared to the 13,063 new vehicles and 14,483 used imports registered during the same month.
It’s estimated that the 4500 EVs now in use in New Zealand represent less than 1 per cent of our total car ‘‘park’’. Compare that to Norway (which is not much bigger than us, both in terms of land area and population), which boasts more than 150,000 EVs and plug-in hybrids. Not only that, but last year 40 per cent of all new vehicles registered in that country were EVs.
There’s a lesson to be learned in all of this for New Zealand. Statistics and surveys show that the Norwegian acceptance of EVs is not necessarily for environmental reasons – but economics. Norway’s government offers generous subsidies for EVs (and imposes restrictions on the use of conventional vehicles), and that’s primarily why the locals buy the cars.
Recent surveys showed that 72 per cent of buyers are choosing their electric cars for economic reasons, and just 26 per cent for environmental reasons.
And statistics from neighbouring Denmark support this. They suggest that if the subsidies weren’t in place, this takeup of EVs might disappear. In 2015 Denmark reinstated registration taxes on EVs after some years of exemptions – and sales last year fell 68 per cent.
So what does all this tell us? How about this: in stark contrast to the situation in Norway, so far our takeup of new electric vehicles has largely been for environmental reasons. The electric vehicles on offer here new are simply too expensive for the reasons to be otherwise.
That also explains why close to half all EV sales so far in New Zealand have been used Nissan Leafs imported from Japan and the UK, the prices for which are probably benefiting from financial incentives offered in their home markets.
All this means the key to mass acceptance of new EVs is for the Government to stump up with financial incentives.
Although the Government wants the takeup of EVs to reach 64,000 vehicles by 2021, it isn’t doing much to help the country achieve that goal. So far it is spending $1 million a year on information and promotion aimed at trying to convince people to buy, exempting the vehicles from road user charges until they make up 2 Here’s a quick snapshot of electric vehicles available in New Zealand with information from the Ecotricity website’s buyers’ guide:
❚ Nissan Leaf $15,000-$40,000 (used)
❚ BMW i3 $85,000 (new)
❚ Audi A3 e-Tron $70,000 (new).
❚ BMW i8 $270,000 (new).
❚ BMW 330e eDrive $89,990 (new)
❚ BMW 2 Series eDrive $68,500 (new)
❚ BMW X5 eDrive $161,000 (new)
❚ Hyundai Ioniq $59,990 (new)
❚ Mercedes-Benz C350e $95,900 (new)
❚ Mercedes-Benz GLE 500e SUV $149,000 (new)
❚ Renault Zoe $75,000 (new)
❚ Toyota Prius III $35,000 (used)
❚ Tesla Model S P100D $200,000 (new)
❚ Tesla Model X 90D $159,000 (new)
❚ Porsche Panamera e-Hybrid $175,000 (new)
❚ Mitsubishi Outlander $55,000 (new)
❚ Audi A7 e-Tron $158,000 (new)
❚ Volvo XC90 T8 $134,900 (new)
❚ Nissan e-NV200 van $36,000 (used).
per cent of our total vehicle fleet, and letting EV users drive on priority lanes in Auckland.
Compared to Norway, that’s nowhere near enough. In that country, electric vehicles are exempt from VAT and purchase tax, which on average reduces their prices by up to 50 per cent – which means their prices are about the same as those of conventional vehicles. On top of that there are all sorts of other incentives such as free parking, free charging, and exempted lanes on trunk routes.
Little wonder then that EVs command such a large market share in Norway. Maybe we in New Zealand could be doing the same, so we can truly take advantage of the abundance of our clean energy.