Electric vehicle sales have jumped by up to 50% as conflict in the Middle East sparks fuel insecurity and rising prices at the pump, car dealers say.
EV City owner Dave Boot said sales of electric vehicles at his Christchurch business had increased by at least half this month compared with February, while Auckland’s ACEV director Greg Larsen said his firm’s EV sales were up about 30%.
“We’d typically sell 40 [EVs] a month, but we’re close to that already for the month”, Boot said.
Meanwhile, Penrose-based GVI owner Hayden Johnston said interest in EVs had “ramped up this week in particular”.
“We’ve seen a 30% increase in inquiries ... for anyone that was staying on the fence, this [Middle East] situation has given them the push.”
But a vehicle importation and distribution industry body leader said it was too soon to link fuel price and availability concerns to any change in EV sales in the longer term.
Fuel prices have risen sharply in the two weeks since the United States and Israel began bombing Iran, and the latter responded with drone and missile attacks on several Middle Eastern neighbours.
Iran’s new Supreme Leader, Mojtaba Khamenei, also vowed today to continue blocking the vital Strait of Hormuz shipping route, where some cargo ships have come under attack.
Fuel prices have topped $3 a litre in some parts of New Zealand this week, and average prices today were $2.76 for 91 grade petrol, $2.94 for 95, $3.18 for 98 and $2.28 for diesel – with petrol prices up more than 8% and diesel 22% in the past month, according to fuel watchdog Gaspy.
And petrol pumps have run dry at Gull service stations across Auckland in the past 24 hours as motorists take advantage of discount day deals amid rocketing prices, while Finance Minister Nicola Willis spoke about fuel supply plans, with car-less days the final stage of a long plan.
But market responses to fuel price movements tended to be gradual, particularly while many were still balancing the upfront cost of a vehicle against longer-term running cost savings, Motor Industry Association chief executive Aimee Wiley said.
“Higher fuel prices naturally sharpen consumers’ focus on running costs, so they can increase interest in more fuel-efficient vehicles, including EVs and hybrids.
“That said, vehicle purchasing decisions are rarely driven by one factor alone. In the New Zealand market, affordability, model availability, charging infrastructure confidence, and broader economic conditions all continue to play an important role in shaping demand.”
However, if the Middle East situation were to place sustained upward pressure on fuel prices, it “is reasonable to expect this could reinforce the value proposition of more fuel-efficient vehicles”, Wiley said.
“Over the short to medium term, higher fuel costs may encourage some consumers to look more closely at EVs and hybrids as options to help manage overall motoring expenses.”
Boot said that was already happening at his yard.
And not only were more people interested in EVs, they were “buying them faster”, he said.
Sales usually made after two or three visits lasting two or three hours were instead happening almost instantly, with customers fast-tracking earlier plans to buy an EV, he said.
“People are coming in, purchasing, and then leaving within the hour. There’s a lot more urgency in the buyers.”
Customers had mentioned the Middle East crisis as a motivating factor, especially for those dependent on a vehicle for medical appointments, Boot said.
“[The Middle East situation] is the elephant in the corner of the room. All anyone’s talking about is fuel security.”
The price of EVs was “not too much different” from non-EVs, he said.
There was a risk that demand would exceed supply, with main supplier Japan potentially holding on to used EVs as demand rose internationally.
“[The] prices of EVs over the coming weeks will start to rise at auction houses as their popularity increases … if things continue as they are, we will not be able to keep up.”
There was probably a two-month supply at the moment, based on when the most recent shipments left Japan, Boot said.
The most popular used EV was the Nissan Leaf – average cost around $15,000 – with Tesla models top in the new market.
It cost $11 per 100km on average to run an EV, compared with $19 per 100km for fuel cars – based on fuel being $2.20, he said.
Larsen, the director of ACEV, said buyers were “a little bit” – but not solely – motivated by fuel prices.
He believed stock levels “will be fine”.
“The Japanese are very smart, and when we had [Clean Car] subsidies here all those years ago, as soon as those subsidies came off we were able to buy the vehicles cheaper.
“We’ve been able to buy over the last couple of months some great product really well-priced … because we’re so small, prices usually for us change when another market like Ireland or even Belarus start buying large quantities of vehicles.”
Johnston – owner of GVI – wasn’t worried about not being able to meet demand.
His business was “always well-stocked”, with no issues with supply at this stage.
Meanwhile, more EV sales were not the only potential spin-off from the fuel squeeze.
Historically, higher prices often led to other changes in consumer and motorist behaviour, said Motor Trade Association dealer and specialist services sector manager Larry Fallowfield.
“People tend to adjust their driving habits, such as going for less leisure driving – the old-fashioned Sunday drive, for instance – or reducing driving to essential travel such as for work or taking the kids to school.
“On the positive side, less driving can mean fewer accidents, so there’s a possible silver lining.”
Increased use of public transport or other means of transport were likely too, as well as interest in purchasing other cheaper modes of transport such as mopeds and electric scooters, Fallowfield said.