Trans Tasman's Political Pulse - August 15, 2017

15 August, 2017

A Nissan Leaf at a charging station.

Electric Vehicles Are Well Suited To NZ, But Country’s Sights Set Too Low To Reap Benefits

INSIGHTS ABOUT THE NEWS - The Govt is full of cheer about electric vehicles, announcing on Saturday one in three cars in the 15,500-strong Govt will be electric by 2021. Its annual target of 4000 EV registrations in NZ was reached at the end of July and are now at about 4200.

As reported in the NZ Energy & Environment Business Alert and the NZ Transport Intelligence Business Alert, Transport Minister Simon Bridges and Minister responsible for Climate Change Issues Paula Bennett made the announcement.

Bennett says “we want the public sector to lead by example so we are setting a hard target of one in three electric or electric hybrid vehicles in the Govt fleet by 2021 ... electric vehicles are the future. A move from petrol and diesel to low emission transport is a natural evolution, and it is our aim to encourage that switch sooner, rather than later.”

Bridges says NZ is “on track to meet our challenging target of 64,000 EVs registered in NZ by the end of 2021.” The goal is to double the number of registrations each year, reaching about 2% of the national passenger car and van fleet of 3.2m.

The Transport Ministry says NZ is particularly suited to EVs, with more than 80% of electricity generated from renewable sources and supply sufficient for widespread adoption of EVs. Even if every vehicle is electric, there is capacity to charge them.

The Ministry defines EVs as vehicles which can be charged from an external electricity source. They can be powered solely by electric batteries or by a combination of batteries and a conventional engine (called plug-in hybrid electric vehicles). Conventional hybrids, such as the Toyota Camry hybrid, cannot be charged externally, are not classified as EVs.

Three developments influenced increased sales of new EVs in NZ this year. Tesla, whose high-spec vehicles must be ordered, opened a pop-up outlet in the old Ponsonby fire station in Auckland in April.

It offers the fully electric Model S sedan and Model X SUV, priced from about $119,545 to about $140,895, respectively. The Hyundai Ioniq, a pure electric vehicle, went on sale in February for about $59,990.

A new version of the hybrid Mitsubishi Outlander is being offered at from $59,990 plus on-road costs, which is comparable to the price of many petrol-driven SUVs. However, secondhand Japanese EVs, predominantly fully electric Nissan Leafs, are much cheaper than new EVs and dominate the new registrations. Leafs accounted for 1,757 of the 4,214 EVs registered in NZ at the end of July.

The Outlander and the Leaf are both from the Renault Nissan stable, which beat the much-vaunted Tesla in global EV sales in the first quarter of this year.

NZTA has also finished consulting on allowing EVs to use special lanes on highways in Auckland. If this goes ahead it may tempt those with the financial ability to take the opportunity to beat gridlock.

The Govt will be able to use its buying power to help Govt depts buy EVs and as these are updated, these vehicles will flow into the secondhand market. There has not been much progress so far, but if this does happen it will bring about a medium to long-term increase in supply as fleets are upgraded in years to come.

While EV developments in NZ are relatively small scale, overseas momentum is picking up quickly. Swedish carmaker Volvo has announced all its new models from 2019 will be either fully electric or plug-in hybrid.

Writing in news website Quartz, Akshat Rathi says the UK last month became the fifth Country — after the Netherlands, Norway, India, and France — to commit to selling only electric cars in the near future.

He says as battery prices fall, it is clear electric cars are the future. “How soon we get there will depend on how serious we are about reaching emissions goals set under the Paris accord.”

For countries to achieve their commitments under the accord “they will have to create incentives that promote electric-car purchases, build thousands of charging stations, and ensure enough electrical capacity.”

Rathi says China leads for EVs with 350,000 registered last year. Tax exemptions worth $US6,000 to $US10,000 a car are in place. It has 150,000 charging stations, with another 100,000 due this year and it has plenty of spare capacity to power all these vehicles, with its thermal power plants running only half the time.

The NZ Transport Agency hosts an independent database of public charging infrastructure which as of Aug 1 listed 71 rapid charging sites and 24 slow or medium (type2 socket) sites. Some of these sites have multiple charging stations and exact numbers difficult to pin down, depending on what definition of charging sites is used.

All this shows NZ is well placed to expand the number of EVs, but election promises from National of 5,000 or so Govt EVs out of 64,000 EVs altogether by 2021 are modest. Unless a bolder programme giving greater incentives to buy EVs, to construct thousands of charging stations, and to ensure the grid has enough capacity for them to be charged, NZ will lag behind the world leaders.

Trans Tasman’s sister publication, NZ Energy & Environment Business Alert, is a weekly source providing you with in-depth news, analysis and opinion on NZ’s energy and environment sectors.

Trans Tasman’s sister publication, The New Zealand Transport Intelligence Business Alert, is a weekly source providing you with in-depth news, analysis and opinion on NZ’s transport and logistics sectors.

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