Huge opportunities for dealers?​

This story first appeared in the May issue of EVTalk – CLICK HERE to download the magazine FREE

Why is the world rushing headlong into electric vehicles, and what does it mean for dealers here?

AutoTalk publisher Vern Whitehead went to last week’s ID Tech conference in Berlin, Germany, to find out what all the fuss is about, and how it will affect dealers, and the broader vehicle industry, in a small country on the other side of the world.

The theme of the conference was ‘Electric vehicles – everything is changing’.

Here’s what he found out

Firstly a bit of background: I’m not an EV evangalist and went to Berlin as a cynical journalist to find out about the latest technology developments in the EV world.

I came away gobsmacked, not at the cars themselves, but at the depth and breadth of the global research and developments going on in the whole EV support structures.

Electric vehicles are not only coming here, they will be arriving – both new and used – in unprecedented volumes over the next few years, as politicians in dozen of different countries turn up the heat on the internal combustion engine (ICE), and diesels in particular.

Thanks to Volkswagen emission ‘cheat devices’ fitted on 11 million vehicles worldwide, Mitsubishi’s outright lies about some of its vehicles’ performances, and some definitely dodgy figures from other manufacturers, no one in authority overseas appears to trust the automakers anymore.

In other words, they’ve lost their power to influence the politicians that make the rules. Nothing illustrated this more clearly than the sight of the head of the Volkswagen Group, Matthias Mueller, grabbing two minutes of President Obama’s time on his visit to Germany last week, apologising abjectly for VW’s actions against the American people, and appealing to Obama not to let the fines being imposed destroy Volkswagen as a company.

Expect even more draconian emission standards than those already timetabled in Europe – standards that the car, bus and truck makers can only meet by going largely electric.

Countries in Europe, such as the Netherlands and Norway, are already planning to ban non-electric vehicles from 2025, and that means that bus and truck operators have to order electric replacement vehicles NOW, if they are going to get the usual 10-12 years operating life out of heavy vehicles.

Diesels are on the way out it seems. Petrol-powered internal combustion engines may eventually follow. Even hybrids are regarded by many as no more than stop-gaps till fast charging EV networks are established. Now hybrids are characterised as products – but not in Japan – whose time has come and gone.

There are three strands to the unprecedented advances of the electric vehicle, and the importance of each influence varies from country to country.

The three key factors for electric vehicles are:

• Technologies – and their fast-paced, on-going development
• Consumers – who want what EVs offer – and want it NOW
• Politicians – who are pushing the EV barrow to create more liveable environments

Let’s take them one at a time.

Technology advances

You often hear three big arguments against EVs – range (how many kms before re-charge), performance and capital cost.

Range anxiety is possibly the biggest bugbear in buyers’ minds, followed by price. However EV models available now will cover 300 kms without charging and 450 kms is expected to be the norm by the end of the year.

Even the Renault  Zoe on sale in  New Zealand now, has a 250 km range, and its no slouch on performance either, with a top speed of 135km/h, 0-50km/h in four seconds and the legal speed limit in 13.5s.

Speed of charging is also improving dramatically, with fast charging stations coming to market offering a full charge in three minutes, not even enough time for a cup of coffee while you wait.

But it’s the new technological advances, outside batteries, that were presented  at the conference that caused most excitement – the use of solar power, and energy harvesting from a vehicle’s braking and suspension, to boost range.

The talk was of virtually perpetual motion with EVs picking up their energy by wireless from roadside stations or in-road charging..

And it may not be the traditional manufacturers that bring the greatest advances in EVs, with the likes of Google, Apple and Dyson (the world’s largest vacuum cleaner manufacturer) gearing up to throw their billions of dollars and unmatched pools of intellectual talent into providing the EVs of the future.

Consumer power

52% of Kiwis would willing swap their current cars for EVs, according to a TV3 Paul Henry poll this week. EVs it seems are no longer the domain of  just “geeks” and “save the planet greenies”.

With diesels vehicles banned from some European cities on several days a year – when particulate and NOx pollution problems become ultra-severe – EVs are seen as the answer to people being able to enjoy a sustainable quality of life.

But even with government incentives and subsidies, the capital cost of EVs remains a stumbling block . Mass production is required to bring down prices and it is forecast that this ‘tipping point’ will start to be reached by 2020 in Europe –later here, of course.

When price parity is achieved between internal combustion engined (ICE) vehicles and Evs – and those ultimately will be cheaper to produce, with less moving parts – industry experts believe the advantages will all lie with EVs – far lower fuel bills and maintenance, quieter and non-polluting vehicles, better acceleration, etc etc.

The politics of EVs

Around the world, politicians are imposing new emission standards and timelines that can only be achieved by the fast introduction of Evs.

The new European light vehicle standard enforces a limit of 95gsm of CO2 emissions by 2020, which allows only four years to get from the current average of 130gsm – believed to be impossible to achieve without the introduction of more EVs.

In some countries or cities, non-zero pollution vehicles will be banned within the next decade – and thanks to VW, Mitsubishi, et al, the vehicle manufacturers are widely regarded as having lost their bargaining ability to have the speed of change moderated.

At the same time, the proponents of EVs seem to be largely educated, affluent and articulate – riding the wave of the worldwide move to roll back pollution.

Politicians control pubic transport services in most major cities and it is relatively easy for them to force a move to zero-pollution buses – and impose congestion charges of more than $NZ35 a day on all non-zero polluting vehicles,  and even outright bans on ICE vehicles, in some cases.

We probably won’t see such draconian moves in New Zealand, but neither will we escape the worldwide invluences.

After all, NZ is a taker of technologies, not a supplier,  and the way the world moves will influence what happens here.

Ultimately it comes down to economics . Overseas industry speakers see it as a no-brainer for a country which produces no vehicles of its own, and imports billions of dollars worth of fuel to power these vehicles, to move to an electric future, with home grown renewable energy replacing oil.

What do these changes mean for kiwi dealers?

The charge to electric vehicles will be led by used vehicle dealers, not the new vehicle sector, at least initially. It’s no surprise that several of the pioneers o the used import trade here are already making moves to stock EVs on their yards.

Unlike franchised dealers, they don’t have to worry about a loss of service income from introducing simpler EVs to their customers.

These born again pioneers report that their early adopter customers are affluent (sadly, zero finance deals but better margins), educated (many from the academic sector), and a sprinkling of Kiwis returning home from overseas, who have experienced the practical benefits of EVs, while living abroad.

Yes, there will still be vehicles to sell but according to what I saw and experienced in Berlin, they will be increasingly different and diverse as a new wave of EVs comes on to the market – lightweight, one or two-person commuter vehicles, for example, as well as traditional cars, SUVs, utes, etc.

(By the time you read this the minister of transport, Simon Bridges, will have announced the government’s plans for EVs in New Zealand – official recognition of electric vehicles that even this cynical journalist can no longer ignore.

Footnote:
Over the next few weeks, Auto Media Group will bring you a series of articles covering some of the more interesting EV developments discussed and on show in Berlin.