Experts bust some myths on the value of electric vehicles

23 February 2016

Hot on the heels of a collaborative meeting SBN organised on electric vehicles, which saw our target of an additional 1000 electric vehicles in NZ by the end of 2018 increased to 5000, experts from our Network bust some myths.

While there have been some challenges to the value of electric vehicles recently, we’re seeing a clear surge in interest. For example, among the 21 organisations present at a meeting on 17 February (all SBN members), there was a commitment to purchase 600 vehicles this year alone. These organisations ranged from small innovator businesses (Blue Cars, ChargeNet NZ, Cityhop, PlugnDriveMan, Yoogo, ecotricity and Indemic) to government agencies (Auckland Council and Auckland Transport) and large corporates (such as NZ Post, Air New Zealand, IAG, Mighty River Power, Qrious, Opus, Meridian Energy, Accor Hotels, LeasePlan, OptiFleet, Vector and Westpac).

We’re yet to get a fuller picture from our other 520 members, but we are keen to work with them to increase the number. To reach our new target of 5000 electric vehicles by the end of 2018, the following critical areas need work:

  • Available product in New Zealand: both new and second-hand cars
  • Infrastructure: know-how, service agents, training and financial packages
  • Consumer education: to dispel myths and enable people to trial the cars
  • Collaborative work with councils and Government: to create a positive environment to accelerate the uptake of electric vehicles across New Zealand
  • Integrating electric vehicles with car sharing schemes.

What follows is a Q&A response to some of the most common myths about electric vehicles from two experts in our Network: Steve West, CEO, ChargeNet and Carl Barlev, Director of ChargeNet NZ, Founder of Blue Cars and former Consultant for Tesla Motors.

Myth 1: The number of electric cars around the country is only 700. They’re sold to us as the future but they are actually nothing of the sort. Most people in the car industry will tell you electric is not the future any more than hydrogen.

Steve: As of January 2016 there were 1015 electric vehicles (EVs) registered in New Zealand compared to 2.7 million light passenger cars. The provision of critical infrastructure like fast charging stations is necessary before EVs will be a practical option for most people.

Carl: Electric drive has actually been around much longer than the internal combustion engine (ICE). From an engineering and performance perspective, electric cars are superior to ICE vehicles. The only real exception is that they have less range, but with the average Kiwi commuter distance less than 40 km, this is more of a perceived problem than a real one.

Furthermore, with the rapid advance of battery technology and the accelerating deployment of fast charging networks, range will become even less of an issue in the months and years to come. New Zealand is already experiencing triple-digit growth in the uptake of EVs and as the range issue is left behind, this trend can only accelerate.

Myth 2: The future is diesel. It is cheap and the technology around the engines is ever improving, particularly as oil is now at around $30 a barrel (or around $1 a litre).

Steve: Diesel would have to be 40c a litre to be as cheap as electricity, and it would still continue to pollute and fund unfriendly foreign regimes.

Electric vehicle sales are better than ever. In the 12 months to January, the number of EVs on New Zealand roads more than doubled. 505 EV sales doesn’t sound like many: 0.21 per cent of the 237,000 light passenger car sales, but exponential growth can surprise you: it would take less than 6 years of doubling for 0.21 per cent to become 10 per cent.

Pollution: 52 per cent of the fossil fuel subsidy calculated by the International Monetary Fund (IMF) is the health cost of local pollution, avoided by the fuel industry and instead shouldered by governments around the world. As proven by the recent Volkswagen scandal, diesel engines struggle to meet current emissions limits, let alone provide for reducing pollution in the future.

Terrorism: Over half (52 per cent) of all imported oil to New Zealand in 2014 was produced in the Middle East [6], by countries that lack democracy and human rights. Worse yet, some of them are state sponsors of terrorism.

In comparison EVs are almost too good to be true. Electric motors are four times as efficient as internal combustion engines, and require none of the expensive maintenance. Electricity generation in New Zealand is already 80 per cent renewable with a pathway to 90 per cent or more by 2025. So in addition to the ‘fuel’ being a quarter of the price, it is almost completely non-polluting. And of critical importance to a tiny island nation like New Zealand, the electricity to fuel an EV is all made here, providing energy independence and supporting the local economy.

Carl: Yes, diesel technology is improving. But these facts are completely irrelevant and distract from what matters most – on measures of performance and energy efficiency, diesel is not only miles behind electric drive, it has no chance of catching up. EVER.

As with any heat cycle, diesel engines will always be limited by ‘thermal bottle-neck’. The effect of this physical limitation becomes apparent when you consider that despite huge investment in Research and Development over the past century, diesel car engines are still only around 20% efficient, while by contrast, an EV typically achieves over 80% energy efficiency.

Myth 3: Governments are artificially supporting the industry when it should be made to prove itself on its own two feet.

Steve: The International Monetary Fund (hardly a bunch of greenies!) reported in 2015 that fossil fuels are subsidised to the tune of US$5.3 trillion globally.

Unlike many countries overseas, our Government does not subsidise the purchase of EVs, provides no tax breaks, and no funding for infrastructure.

The only subsidy the New Zealand Government support currently provides involves not applying Road User Charges, mainly because they have yet to figure out a fair way to assess vehicles that run on a mixture of excised petrol and unexcised electricity.

Carl: I agree with Mike here, with the addition of two important points:
1. Loss leaders can lead to better returns in the long run. A small investment in support of EVs would, thanks to their significantly better efficiency and ability to run on locally produced energy, return many-fold over to New Zealand in years to come.

2. In the case of transport, we have been doing the exact opposite – supporting a ‘loss-loser’. For much of the past century we have been subsidising the inferior technology – fossil-fuelled vehicles. This has not only been unfair, it has given these dinosaur technologies decades more life than they ever deserved on their own merits, costing society countless $billions in completely unnecessary expenses and lost opportunities (not to mention the thousands of lives lost and stalled progress in living standards).

Myth 4: You can’t really charge your car for free – Vector customers are paying for it.

Steve: companies like Vector, which has two installed charger stations, will start billing users of their stations later this year, as soon as they have the technical ability to do so. Currently 95 per cent of charging is done at home or the workplace, which Vector and its shareholders (customers) benefit directly from.

As with any new technology companies are testing the market.

Myth 5: Heaps of resources are used to build the many batteries required and we’re going to have massive disposal issues.

Steve: In 2015, the Energy Efficiency Conservation Authority (EECA) commissioned a lifecycle analysis of the environmental impact of electric vehicles compared to internal combustion engine vehicles (petrol and diesel). The report confirmed that EVs are better for the New Zealand environment than petrol or diesel powered vehicles, across the lifecycle of the vehicle as well as in use.

The significant findings included:

  • A reduction of carbon dioxide- equivalent emissions approaching 60 per cent will be realised over the full life cycle of the vehicle for an EV compared with a petrol vehicle.
  • Whilst EVs do contain rare earth materials in small amounts (as do most petrol and diesel vehicles), the study findings show that the resource depletion impact of rare earth metals was not a significant issue. 
  • The lithium salts used in lithium-ion batteries for current EVs on the market are neither a rare-earth nor even a precious metal.

The batteries in modern EVs contain no heavy metals, nor any toxic materials, and could be disposed of by putting them in a landfill. But that would be foolish, because when they have reached their useful life in a vehicle, EV batteries still have 70 to 80 per cent of their capacity, and can be re-purposed for highly valuable uses such as stationary storage.

Myth 6: They’re not going to be mainstream in our life time.

Carl: I expect to live past 2030 and I predict EVs will make up over 50 per cent of all new car sales by then.

Find out more about SBN’s project on Electric Vehicles and contact Rachel Brown if you’d like to get involved.