Electric cars to reach value-parity in 2020 – researcher

It will be some time before we see a substantial fleet of electric cars on New Zealand roads, according to a leading University of Canterbury researcher.

Electrical engineering researcher Dr Allan Miller said at the national energy conference in Wellington today, that his research into electric vehicles found they were too expensive for New Zealand at present, but the country could benefit substantially from the adoption of electric vehicles in terms of reduced greenhouse gas emissions and reduced air pollution.

“The only real solution is to wait until the markets and manufacturers in other countries drive the prices down through improved technology and the economies of scale,” Miller said.

“The price of an electric vehicle is largely determined by the cost of the battery system,” Miller says. “Until this cost is reduced by improved technology and increased manufacturing volumes, they will remain prohibitively expensive.”

Electric vehicles in New Zealand – two full and one ‘range extender’ models – are more than double the cost of a comparable vehicle. Nissan’s Leaf costs $69,700, while a similarly sized Tiida model starts from $31,300.

Miller says we are eight years from the tipping point.

“The key tipping point at which the battery cost per kilowatt-hour drops below an affordable level is expected to occur around 2020,” he notes. “This will result in these vehicles reaching near price-parity with standard vehicles and consequently increasing market volume.”

Miller said despite hybrid vehicles being on the New Zealand market for about 10 years and offering considerable fuel savings, they only made up 0.2% of the New Zealand fleet in 2012 with 5000 to 6000 registered hybrids on New Zealand roads.

However, as hybrids dropped to near price parity with new fuel vehicles 2012 saw more hybrid sales than the last two years combined. So while it will take time for any vehicle to become established in the market, the rate of this uptake is ultimately dependent on price.

He explained it was worth noting that even if the balance was tipped in favour of electric vehicles now, there were about 2.6 million private vehicles in New Zealand, which at the current rate, could take 50 to 100 years to be replaced.

Dr Miller’s electric vehicle project was headed by Electric Power Engineering Centre scholarship student Scott Lemon, and funded by the National Energy Research Institute and the University of Canterbury (UC).

It will lead into a national smart grid project being undertaken at UC. The project is to be funded by the Ministry of Business Innovation and Employment.

Electric vehicles have the lowest operating cost per kilometre across petrol, diesel and hybrid vehicles.

Miller suggests that they should be considered by any fleet owners who drive considerable distances annually, such as taxi companies and possibly local government.

However, the vehicles still have only a limited driving range before they need recharging, which can only be addressed by improved technology and infrastructure, Miller said.

“Despite all the interest and excitement around electric vehicles, New Zealand will have to wait,” he said.
“We are simply not able to decrease prices or encourage uptake in an efficient and affordable manner. Instead, we should keep an eye on global developments and take action when it is economically appropriate.”

“In the interim, money is best spent doing what we can do now at a reasonable cost and which might take longer to implement,” Miller says.
“This includes tightening regulations on the fuel economy of imported vehicles, setting targets for fuel economy improvements, educating consumers about the benefits of improved fuel economy, planning for new charging infrastructure, increasing renewables in the grid and developing the smart grid.”