Electric avenue

Who’s buying electric vehicles? How much are they paying? What’s available second-hand? Melanie Carroll looks at the state of the EV market.

When a customer looking to buy an electric vehicle walks onto the lot at Lower Hutt’s Coventry Cars, there are plenty of questions – from the salespeople.

How far do you travel each day? What will you use the car for? And how are you going to charge it? Those are the three most important questions for an EV buyer to consider, says Bruce Stewart, the second-hand car dealer’s owner and managing director.

‘‘We probably ask them more questions than they ask us to start with,’’ he said. ‘‘A lot of people don’t know a lot about EVs. You read stuff online, but unfortunately, a lot of it is contradictory.’’

Obviously how to charge the car is important, particularly in a place like Wellington where a lot of people only have on-street parking.

‘‘You can’t really charge on an extension cord going over a footpath on a street, although some people do. It’s not recommended by us but of course when they have the car, it’s their decision on how they want to charge it,’’ Stewart said.

For the more than 42,000 EVs in New Zealand, 82% of charging happens at home. The country also has a growing network of charging stations, including at some petrol stations.

In terms of daily distance travelled, buyers need to consider the battery range they can get for their budget, said Stewart. A car that can travel 400km or more on a single charge will be more expensive than a car that does less than 200km.

David Crawford, head of the Motor Industry Association, which represents new-vehicle distributors, said the more expensive new EVs with a range of 400km-plus had outsold the less expensive models in recent years. The big-volume sellers were Hyundai Konas and Teslas.

A car with a range of 450km to 600km was more suitable for long-distance travel, with potentially one charging stop of about an hour along the way, he said.

However, the shorter-range cars were starting to catch up in sales because of their price of about $45,000 to $55,000 with the Clean Car Discount, Crawford said.

‘‘People feel they can get that as their workhorse, their daily commute, the high-mileage car because the payback is good.’’

The capital cost up front was higher, up to 70% or 80% more than the equivalent internal combustion engine models, but the Clean Car Discount had helped address the perceived lack of affordability, he said.

‘‘But where people make huge gains is if they keep the car for four, five, six, seven years, their variable cost of running them is a lot, lot lower, particularly with high petrol prices.’’

Overall, since January 2021 before the clean car discount was introduced, new EV sales have jumped from 242 a month to 2556 in August 2022.

Plug-in hybrid electric vehicle (PHEV) sales are up from 99 in January 2021 to 627 last month. Hybrid sales rose from 831 in January 2022 to 1626.

The country’s biggest-selling new electric car was the Tesla Model 3, with more than 2050 sold so far this year. The Swedish Polestar 2 sold 506 vehicles. Both models start in price above $70,000.

Other top sellers include SUVs. Sales of China’s BYD Atto 3 hit 468 so far this year, most of them in August. Likewise for Tesla’s Model Y with 590 sold, largely last month. Hyundai’s Kona and Kia’s EV6 had sales of 610 and 456 respectively.

‘‘The little SUVs where they’ve got a reasonable, 300km-plus range, seem to be selling well and the vehicles below $80,000, because they get a [clean car] discount, sell slightly better than those over,’’ Crawford said.

If someone turned up at Coventry Cars wanting to drive off today in a used Leaf for under $30,000, they would have no difficulties, Stewart said. The dealership had about 100 in stock, and it was the main choice for people wanting to spend under $30,000.

‘‘If they wanted something else, that would be tricky, but we would definitely have an EV for them. We have three or four BMW EVs and a couple of other brands, but that’s about it. We’ve got a Tesla.’’

People willing to spend between $30,000 and $40,000 could still buy a late-model Leaf, but there was more variety.

Someone wanting to spend $15,000 for a car that had a range of about 200km might be better off considering a hybrid vehicle.

Buyers wanting a used EV would have more choice in two or three years as the wave of new models reached the second-hand market, Stewart said.

‘‘There are a lot of new Teslas on the road now that will be getting traded in soon, and there’s going to be a very big second-hand market for Tesla in the next two years. But they’re quite a new model, so there’s not really much of a second-hand market now.’’

There was a lot of innovation by European manufacturers as well, but that was also very recent.

David Vinsen, head of the Vehicle Importers’ Association, said about 120,000 Nissan Leafs had been manufactured in Japan in total, of which New Zealand had imported about 30,000.

Dealers were meeting demand, but that demand was strong.

‘‘At the moment there’s a scramble,’’ he said. ‘‘Our members, dealers and importers are buying all that’s become available, mainly in Japan, but also in the UK.’’

About 95% of imported vehicles came from the Japanese domestic market, with the rest coming from the UK, Hong Kong, Singapore and a few other markets.

‘‘So the New Zealand domestic used vehicle market is a natural and logical extension of the Japanese domestic market, they’re inextricably linked really.’’

Stewart said the rising price of shipping and competition from other countries for Japan’s used EV fleet were issues for New Zealand that would not go away any time soon.

‘‘If the New Zealand consumer wants those vehicles, they’re going to have to pay more for them. And as it happens, we are paying more for them.

‘‘Our margins have never been smaller, but our volume has never been higher, either, so it compensates for that.’’

Vinsen said demand would have grown even without the Government’s Clean Car Discount programme, with the discounts for eligible used vehicles effectively going straight to Japan and lifting the prices there for New Zealand buyers.

There were three drivers of the price of used EVs in New Zealand, he said: Availability of supply in Japan, what the vehicles can sell for in New Zealand, and the strength of the New Zealand dollar.

Crawford said battery warranties for new cars tended to be around about eight to 10 years, and they were not cheap to replace. However, modern EVs could do many more kilometres on their original batteries.

For used cars, battery life had been a big concern for buyers in the past, followed by worries about range, Vinsen said. However, the main concerns now were about what happened to batteries at the end of their life.

Batteries could be reconditioned by replacing individual cells. There was also strong demand for the batteries to be used for stationary storage, for example as part of solar-powered systems.

Stewart said battery health remained ‘‘quite contentious’’, although having to replace them had not been an issue for the dealership.

A new battery from Japan could cost about $12,000 for a Leaf, he said, so rather than replace the battery, people tended to trade in the car and buy another.

‘‘It now seems that people are buying it to save money on fuel, but it still is a good feeling not burning fossil fuels.’’

Bruce Stewart, Coventry Cars

There had been cars imported with up to 180,000km on the clock which were unsellable because the battery could only do another 40,000-odd kilometres, but those batteries were being snapped up as power units for houses.

The first wave of EV buyers was entirely motivated by environmental concerns, because it was a bit of a leap of faith, Stewart said.

‘‘And it now seems that people are buying it to save money on fuel, but it still is a good feeling not burning fossil fuels.

‘‘So you get it both ways. You save money, but also you feel like you’re doing your part for the environment as well.’’

It was a rewarding feeling to plug an EV in at night, charge it, then drive off in the morning knowing you never had to go to a petrol station again, he said.

‘‘I’m for EVs, and not just because we’re in business and we make money out of them. That was the first reason why we got into them, of course, to make money. But I really believe in them, and I really do like them.

‘‘Not everyone can buy an EV and not everyone would want to buy an EV. But they are a very good alternative for someone who can fit them into their lifestyle.’’