EV Torque - What's coming our way?
As we look to an automotive future powered by electricity, I continue to wonder - where is New Zealand’s plan for change?
We have seen draft advice from the Climate Change Commission around an ambitious uplift in EVs, and the Minister of Transport has announced vehicle emissions standards for 2025. Speculation swirls about incentives to adopt EVs, and a possible phase-out date for importing fossil fuel vehicles. However, no one has yet brought this all together and laid out a pathway for a low-emissions transport system in New Zealand.
In the UK, the Office of Low Emissions Vehicles (OLEV) has been planning for this since 2013. It’s no surprise then that plug-in sales hit 14 per cent of total sales there in March of this year. Press releases from car manufacturers arrive almost daily announcing new electrified models. Others announce the discontinuation of fossil fuel burning models. In some cases, like GM and Volvo, the missives set the dates by which these businesses will only produce battery-powered vehicles.
It’s pretty clear that change is coming to the cars we drive. So the question really is - how can we best take advantage of this change in technology? The faster we stop driving carbon-powered cars, the faster we start eating into our nation’s high levels of carbon emissions. Moving to EVs will be an even greater transformation than when New Zealand ended the local assembly of automobiles in the early 1990s.
That change benefited consumers at the time, as Kiwis gained access to a greater range of vehicles at more affordable prices. With the benefit of hindsight, it led to more people buying cars and contributed to the situation we are faced with today with a transport sector that generates around one-fifth of our emissions.
The car industry has been through significant change before, and it is on the cusp of doing so again. For those who might be thinking about buying a car soon, what does this mean for you? There may not yet be a nationwide plan to accelerate the electrification of transport, but fossil fuel vehicles are a twilight technology. Expect the transition to happen rather quickly. Think about how rapidly other technologies have been adopted, like smart phones and Netflix, once price and availability pass a tipping point. So, if you’re planning on buying a new car tomorrow, it’s worth thinking now about whether you want to invest in an old technology.
It’s also worth considering whether there will be a market for your car when it comes time to sell it. It is true that EVs remain more expensive when buying new. The question I get asked most is, ‘How can I afford an EV, when they are so much more expensive?’
There is more than one way of considering this question. Total cost of ownership modelling already suggests that EVs are cheaper to run with equivalent refueling costs of between 24c and 40c a litre when you charge at home. Your resale should be comparatively stronger too.
Bloomberg New Energy Futures predicts purchase price parity between EVs and ICE-powered vehicles will occur by 2025. Newer players from China and India will likely challenge pricing structures like we haven’t seen before, mainly through achieving critical mass via less expensive models.
Secondly, replacing your car with another may not be the wisest choice for everyone. A reduction in carbon emissions requires less vehicle kilometres travelled (vkt). We are seeing intensification in our cities, and housing and apartment dwellings are being produced without garaging. These will be better served by walking, cycling, public transport or car share programmes. I am told by e-bike retailers that they can’t keep up with demand.
So it’s a big change coming our way. Enjoy it, grasp it and make it work for you. In the meantime, let’s hope our policymakers continue to embrace this change, and set out a comprehensive plan for helping us get the most from the shift to low emissions transport.
This article first appeared in the June 2021 issue of NZ Autocar magazine.