Plugged-in: Our electrifying future

The impending onslaught of hybrid, PHEV and EV vehicles on the New Zealand market could be compared to the recent media hype over the arrival of Cyclone Lusi – everyone knew it was coming, but few had the slightest clue about what it meant, or what to do about it.

Yet, if there is one certainty the trade, and especially the used import side, must face in the very near future, it is getting our heads around the market for hybrid vehicles.

The absolute domination by hybrid-based cars – increasingly multi-seater – and SUVs sold new in Japan these past 12 months leaves little room to speculate – the Japanese consumer has developed an insatiable appetite for EV and assisted propulsion systems, whether hybrid based (Toyota Prius, Aqua, Estima, Alphard, Sai etc), PHEV (plug-in hybrids, Mitsubishi Outlander, Prius PHEV etc) or pure electric (Nissan Leaf).

And this means in five or six years time, our used import shopping lists are also likely to be dominated by EV-based choices.

It’s not hard to see why, either.

Previously a vocal skeptic of the hybrid bandwagon, content to throw rocks at the perceived sandal-wearing, whale-saving bearded university lecturer image, two events occurred to the writer that forced a change of perspective.

Last year, I traded a 2008 Prius Gen-3, NZ-new and complete with Organic Living Magazine sticker on the bumper. Not only did I hate it with passion, I found it difficult to find a buyer for it, too. So, in a day of dark desperation, needing a later-model driver for a week or so, I gritted teeth, hopped in, and away I hummed.

I confess now – and this is completely out of character – I grew to like it. Not only was it brutally economical to run, but I enjoyed the smooth and comparatively quiet drive, ease of use and even caught myself checking the on-board readouts to see if I’d improved my economy with better usage techniques. Horrors!

The second event was the use of a Holden Volt for a week.

Hop, in, figure out the complexities of the electric park brake and drive system sequence, and the Volt delivered a driving experience quite unlike anything I’d ever sampled. Not least the whisper-quiet drive, (making road and tyre noise a greater annoyance), the excellent seating position, array of controls plus the feeling you were driving a car off the set of Bladeruuner, this thing performed seriously.

I could happily live with one of these – it was that seriously good. There were a few minor niggles – carrying around a charge pack and asking friends if I could “borrow their electricity” raised a few eyebrows – but nothing major.

With all this goodness, you’d wonder why half the population hasn’t already converted.

And herein lies one of the issues the whole EV market will struggle with – price. Released at a whopping $85,000 here in NZ, it was pretty clear from the outset that Holden would sell few outside the true believers and cashed-up early adopters.

Even with a resigned nod to the absolute sales flop so far by dropping to a mere $75,000, it would appear you would need only a finger or two more than one hand to count the number that have found actual non-dealership buyers in NZ so far.

Which, given how good the Volt is, seems a little sad, since I suspect far worse cars are being sold in greater numbers, for far more, simply on the basis of marketing seduction. Yet the new retail price here in NZ is not necessarily the issue. The new Outlander PHEV, by all accounts a decent bit of gear, has come in under $60,000 which makes it an equal proposition to other mid to higher-end SUVs on the market. A new Prius C, at $31,280 plus ORC list, is several thousand LESS than the cheapest new Corolla.

Here lies the first of two not inconsiderable hurdles to overcome for EVs to gain market acceptance.

In Japan, favourable government incentives to purchase hybrid powertrain vehicles have in part fuelled the demand – but even without these, Japanese consumers would, I suspect, likely favour them over their conventional petrol brethren.

This in turn has created a huge second-hand market that simply cannot get enough EV-based Toyota product to satisfy demand. A good example of this while in Japan last week, a friend, having purchased his 2011 Prius new for just on Y1,900,000 and travelled 135,000km, put it through auction, where it proceeded to fetch an astonishing Y1,300,000. That’s right – $7000 total depreciation over three years and 135,000km of hard motoring- almost unheard of for a regular everyday car- and more so, a standard pricing expectation on the Japanese market.

In a nutshell, at this time, Kiwi importers are being thoroughly out-gunned in the pricing stakes by their Japanese dealer counterparts – a trend evident from the onset of the Nippon hybrid marketplace and one that appears likely to continue.

So the very real concern for our market is the dominance of EVs on the sales charts, resulting in a shortage of conventional stock for purchase come 2017-2018. In turn, the volume EV’s may be priced out of reach for New Zealand consumers.

That is, if they’ll buy them in the first place.

Our second hurdle is acceptance by Kiwi buyers – will they walk in to dealerships in 2018 and be as comfortable selecting a used import Aqua as they would a Demio?

With the exception of our city taxi fleets, the answer so far would seem to be ‘no’. And in a chicken-or-egg scenario, it’s hard to say if the issue is consumers shunning the product, and in turn dealers sensing market oblivion, or the suspicious approach by dealers to the product in turn being picked up by would-be buyers? Either way, there’s yet to be seen any real market penetration by EVs into the used import volume statistics. Aside from a handful of Prius sedans, we’ve seen the quick appearance of the Nissan Leaf here (panned in Japan by consumers, the limited EV-only range a real handicap compared to the hybrid powertrains on offer elsewhere) and little else.

Then there’s the almost-now urban myth of battery replacement costs. There may have been some initial issues, but now not only battery life exponentially greater, but the network of replacement and recharge companies giving the informed consumer few reasons to baulk.

And you have to admit, up till now, the typical image of the Prius owner hasn’t exactly endeared itself to the average Kiwi – it’s not the sort of car you’d throw the keys on to the bar with your mates watching.

Could all this be about to change though?

Relatively stable fuel prices (albeit at over $2.00 a litre for some time now) aren’t enough- yet – to propel Kiwis to adopt hyper-mileage cars, nor into the waiting arms of public transport. But our energy production costs and methods – green by the standards of most of the developed world – give a compelling reason to consider less dependence on a resource we must import, versus our renewable energy – including geothermal and hydro.

Standard hybrids such as the Prius go a small way to addressing the issue – but you still use fuel, just less of it. And the New Zealand lifestyle, lack of population density and relatively high infrastructure costs may rule out the likes of the Leaf, as a pure EV.

But the Volt struck me as the perfect combination for a Kiwi consumer, the 75km range enough for the commute, yet the petrol generator backup for long trips the antidote to sitting in the rain for half an hour while your EV fast-charges enough go-juice to get you from Papakura to Mercer – and the next charge.

And given the pricing of the new Outlander and Prius-C, initial cash outlay for a new product will soon cease to be a barrier for new-car buyers, given that even the Volt is probably only the beta version of the next PHEV from GM, the next to be targeted I would have thought at a more affordable price bracket. The key to energising (if you’ll excuse the pun) the imagination of used vehicle buyers will be marketing and education, not just an individual product either, but the overall concept of EV ownership as a desirable everyday choice, practicality coupled with efficiency and design.

Leading the charge (I know, I know) will be the used import industry. Importers have become used to educating the public – whether getting over initial much-spouted myths like ‘thinner steel’, ‘orphan models’, ‘throw-away-car’ etc (all lines used almost exclusively by those who have never visited and observed the Japanese car industry), the concern over odometer tampering, the transition from manual shift to autos – importers have been the great schoolroom of motoring these past twenty-five years. Industry must also rise to the challenge of “normalising” public opinion over the merits of choosing an EV platform in a used car – but of even more urgency, the support infrastructure must get their collective heads around the changes afoot, and get on board. It is only this changing tide that will combat the strong market price in Japan for used EVs.

Until then, if we don’t find a way to plug in to our intended market, we run the very real risk of having access to the very best technology in the world, with only the need to upgrade price expectations, yet being unable to exploit this through sheer consumer apathy. And we know – given our analysis of the market ahead – if this same level of resistance is persistent in 2018, our marketplace for used vehicles in New Zealand could be in for some vey rocky times indeed.