Let's not be fundamentalist about feebates and EV ownership

Thursday, 11 July 2019

Pure-EVs are a small part of NZ's electrified vehicle fleet - but there's still a lot of choice.

OPINION: Doesn't take much to shine the light back on electric vehicles (EVs), does it?

The Government's proposal for a 'feebate' to tax thirsty cars and use the money to subsidise clean ones got us all talking about EVs. Again.

The prospect of an $8000 saving on a brand-new EV is tempting. Getting it from people burning too much fossil fuel is even more appealing.

But let's take a bit of a reality check. There aren't that many EVs to choose from in NZ (or indeed globally) and the cheapest is currently $60k.

Leaf looks like a promising EV and it's NZ's cheapest. But even with a potential 'feebate', it's still an expensive car.

* There's an easy way to reach NZ's EV target - but you might not like it

* How much will an EV really cost to run?

Toyota Corolla ZR is a natural combustion-engine rival for Nissan Leaf. And cheaper to buy/run in some future scenarios.

* Lowest to highest: every EV you can buy in NZ**

There will indeed be more by the time the proposed feebate comes into force into 2021 and almost certainly a few more affordable ones - but if you think the market will be awash with EV options you're dreaming.

The EV argument often assumes it costs almost nothing to run one. That's not true.

The other reason we're living in a bit of a false consciousness is that some power companies are currently offering free DC fast charging for EVs (Vector and Waikato's WEL Networks among them) and the Government has temporarily exempted EVs from Road User Charges, which drivers of petrol cars pay as part of fuel tax.

Neither of those things will continue into the future; no business can afford to give a product away for too long and RUCs will be re-evaluated in 2022.

New-gen model finally brings all the latest Leaf technology and equipment to NZ new-car buyers. We like.

Last year we looked at what it might really cost to run an EV if you were paying to use fast chargers and contributing your share of RUC (which you really should if you're driving your EV on the, ahem, road).

The results were surprising when compared with a conventional petrol car. So we thought it would be worth revisiting the issue with the newest, cheapest EV on the block and with one eye on the potential capital-cost savings through a feebate.

If you want zero emissions, buy a Leaf. If you want a clean car that's potentially cheaper in overall ownership, buy a Corolla.

That's the new-generation Nissan Leaf of course, which is now on sale in NZ for $59,990. It's not just a good price - it's a great package of relatively decent range with cutting-edge safety and driver-assistance equipment for the money.

Post-2021, let's assume you get a feebate of $8000 (a figure that has been mooted for a car of this type), making your new Leaf $51,990.

What to compare it with? NZ's best-selling passenger car of course, the Toyota Corolla. Like the Leaf it's a small family hatchback. And let's face it, the Leaf is very much the Corolla of the EV world.

The Kiwi Leaf is extremely well-equipped so we'll need the top Corolla ZR at $37,490, which is also fully loaded. A typical feebate for a Corolla is $800, so let's call it $36,690.

Why not the Corolla ZR hybrid, which is even more thrifty? Because the Toyota is here to represent petrol cars and not many mainstream brands use petrol-electric technology. Yet. Let's keep it extra fair.

It's not surprising that an EV has a much higher capital cost than a petrol car. So we start off $15,000 behind.

I can already hear fingers clacking on keyboards saying that you should just buy a used Leaf. But the path to eco-growth lies in adding new EVs to the fleet so that they will be available to used buyers in the years to come, rather than importing other people's old vehicles that are already half worn out.

And there are actually a lot of used Corollas out there as well, if that's the argument.

Onwards. According to Global Petrol Prices, the average petrol price in NZ for April-July is $2.281 per litre. The official ADR fuel consumption for the Corolla ZR is 6.0l/100km, so it's going to cost you roughly $130 to drive it 1000km.

The new Leaf has a 40kWh battery and claimed range of 315km under the same ADR test (or 270km in the more 'real world' WLTP test). That's 12.7kWh per 100km.

If you're not doing big mileage you could charge your Leaf at home (although it takes around 24 hours from flat). EECA quotes an average off-peak electricity rate of 15 cents/kWh for the purposes of EV charging, but let's keep it real and go with Canstar's average Auckland power price of 20.88 cents.

That's $27 to drive the Leaf 1000km, saving you roughly $100. So if you're worried about capital cost, it will take you 150,000km to recover the extra cost of a Leaf over a top-line Corolla. Without RUC.

If you're paying RUC, that's an extra $68 per 1000km, so it will cost you $95 per 1000km to run the Leaf. That brings your saving over the Corolla down to just $5. I'd call that price parity - or about three million km of driving to make up the difference.

If you choose to charge at paid public stations, which you probably will if you're planning to drive more than 60km per day (that's the amount you can charge up at home in eight hours overnight), it will cost you about $70 (25 cents per kWh plus 25 cents per minute to park at the machine) for that same 1000km.

Without RUC that's a $60 saving over the Corolla (250,000km to make up the difference). With RUC you've tipped just over the Corolla running cost, so you'll never make that difference back.

I love EVs and there are many reasons to run one other than cost: environmental, performance. And yes, petrol prices could go into the stratosphere (although there's no law to say power prices have to be stable).

But let's keep it in perspective is all I'm saying.

I think many of us may have missed the point about the consumer relevance of the feebate system. It's not designed to get everybody into EVs immediately (the cars won't exist to let that anyway), but rather to encourage people to buy the most fuel-efficient vehicle possible for their needs.

Even with a massive EV uptake, petrol cars are going to be around in our fleet for decades to come. So let's not be fundamentalist about the electric thing.

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