Sales of EVs, PHEVs and hybrids surged to a record high in June, accounting for 47 per cent of new vehicle sales during the month. Image / Getty Creative
Sales of EVs, PHEVs and hybrids surged to a record high in June, accounting for 47 per cent of new vehicle sales during the month. Image / Getty Creative
“It seems New Zealand’s love affair with electric cars is coming to an end,” reads a spiel introducing the latest instalment of EY’s Mobility Consumer Index - a survey of EV buying intentions.
Last year, the survey found the number of Kiwis who wanted to buy a pure electric, plug-inelectric or hybrid vehicle had jumped 19 points to 49 per cent as the Clean Car Discount (and associated penalties for high-emission vehicles) was ushered in.
In the 2023 edition, that’s fallen 7 percentage points to 42 per cent.
The survey - released this week - is based on the responses of 500 New Zealand adults in March. At that time, buyers knew that the rebates under the Clean Car Discount would be reduced on July 1.
Sales of EVs (2643), PHEVs (1318) and hybrids (4297) duly surged to a record high for June, accounting for 47 per cent of new vehicle sales over the month (August saw a hangover after the July deadline sugar high, with registrations crashing to 787 pure battery vehicles, 406 PHEVs and 1150 hybrids),
With the discount now reduced, up-front costs emerged as a significant objection, alongside range anxiety and a new issue came to the forefront this year: concern over battery replacement.
With increases in the cost of living, high fuel prices are the biggest motivation for purchasing an EV at 55 per cent while rising penalties on internal combustion engine (ICE) vehicles have dwindled from 49 per cent to 34 per cent despite the increase in fee-bate for high emitting vehicles increasing in July.
A reason could be that National committed to abolishing the “ute tax” back in March. The party, now in pole position to lead the next Government, confirmed it would abolish the Clean Car Discount scheme, and the related penalties earlier this month. At the same time, it promised 10,000 public EV chargers by 2030.
So while enthusiasm for buying an EV has dimmed overall, there could be a buying surge ahead of the election.
While enthusiasm for buying an EV has dimmed overall, there could be a buying surge ahead of the election. Photo / Dean Purcell.
“I think it will be similar to what we saw in June, prior to the changes in July - noting that upfront cost is still the main barrier for why people aren’t buying an EV,” EY NZ director Ashley Kearton said.
Looking further ahead - specifically, to March 31, 2024 - there will be another development that could dampen long-term demand.
That is the date that EVs are due to lose their exemption to Road User Charges - the fees charged to owners of non-petrol vehicles, starting at $76 per 1000km. The AA says the average motorist drives 12,000km per year, which means $912 in RUCs, taking a lot of the gloss off the fact that a battery top-up only costs the equivalent of around 40 cents per litre.
Both Labour and National say that with EVs now accounting for more than 3 per cent of NZ’s vehicle fleet, and counting, the exemption party has to end (if nothing was done, there would be a $2 billion hole in Crown accounts from lost petrol tax, once EVs become the norm).
A plan to avoid double-charging plug-in hybrids with both petrol tax and RUCs (or neither, if their owners are sly) has yet to emerge. But the RUCs are on the horizon, regardless.
Battery replacement anxiety
Of those who don’t want to buy an EV, upfront purchase costs and range anxiety remain the two of the biggest objections.
But of those who are considering buying an electric car, a new issue came to the forefront this year: battery replacement - which has also become the number two issue overall, worrying 38 per cent of potential EV buyers or upgraders, when you also factor in current EV owners.
There were concerns about the cost of replacing batteries, how they would be recycled, and the possible impact on re-sale value.
“This goes to the point that EVs are an emerging technology. We haven’t had a lot of these vehicles - certainly the newer models - on the road for that long, so there’s just uncertainty around ‘Will I need to replace my battery after 10 years?’” EY NZ director Ashley Kearton said.
The largest-selling EV maker, Tesla, warrants its batteries to maintain at least 75 per cent efficiency after eight years.
Tesla has yet to hit that eight-year mark for mass-market models - and the firm says it won’t give a price until closer to the date, given battery prices are shifting as the market scales. But the broad rule of thumb is that for most makes and models of EVs, the batteries account for around a third of the new car price.
Kearton also sees a larger issue. A petrol car simply ages. But in five years’ time, an EV sold today could be completely eclipsed by new models featuring breakthroughs in battery technology, or other technologies. He compares it to the early days of buying a smartphone or a laptop - when every six months there would be a bigger display or a substantially faster processor.
The EY survey did show that once people have purchased an EV, 78 per cent are likely to do so again.
Kearton said that while tax incentives could play a role - as they have in one of the highest EV adopters, Norway - there needed to be a “holistic approach” to create an incentive ecosystem, involving both the public and private sectors.
He noted that in Norway, EVs can drive in bus lanes, and get free municipal parking. They are also exempted from road tolls.
The EY survey also found 70 per cent of people would be more likely to buy an EV if an installed fast charger was included in the price. It would also make things easier if power plan options were bundled.
In terms of a public top-up, Kearton says the focus of buyer concerns has shifted from, “Lack of charging to availability of charging and that’s consistent with what we’ve seen in countries where they’ve got higher penetrations of EVs, people start to become more comfortable that there’s going to be a charger. It’s more like when you get to it; Is my payment mechanism going to be accepted? Is it going to be out of order? Is there going to be a line? That’s something I’ve experienced myself on public holidays.”
There has been progress on that front, with three of New Zealand’s main EV charging networks - ChargeNet, Z Energy and Counties Energy’s OpenLoop network - recently launching an EV charging roaming trial.
Supported by funding from the Energy Efficiency and Conservation Authority (EECA), the project aims to develop and trial “EV-roaming capability” between the three charging networks, which would allow drivers to charge at any of the three networks’ chargers from their choice of account (each has apps that feature the likes of charger location and live-availability). The aim is to make it as easy as using a different bank’s ATM.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
