The RACQ looked at total annual ownership costs (including depreciation which is often left out of popular cost assessments) for an EV (not just energy costs as outlined in the WhichCar article for Telsa supercharging stations) and ICE car, still is significantly in favour or ICE vehicles…
The biggest hurdle is the additional capital cost and associated depreciation, which more than offsets any savings in energy of maintenance costs.
The upfront purchase cost is not always a deciding factor for many motorists. There would be zero Ford Mustangs or Dodge Rams on the road today if that were true.
Most consumers would understand that.
Which is why I don’t own a Kona Electric BEV. It’s more than we can afford for now due to the higher upfront purchase cost. Depreciation may be a business concern or opportunity. It may not be a concern to a private user who does not trade cars every model change.
Consider that instead of a Kona Electric or its near competition, some if they had that cash to spare might buy a low end BMW 3-Series or small Lexus Sedan. They all require similar investment. Each says something different about personal priorities.
The Kona Electric or similar would be more than adequate for 99.5% of all our travels. We would also meet 90% of recharging needs from home solar PV.
Tesla’s pricing decision for it’s SuperCharging stations is hardly going to cause a halt to the BEV revolution.
Today’s options
With Audi’s E-tron price wise matching up similar to a top model Tesla, I know which would be the easy choice.
It can be for a private consumer as the trade in price, when it is done, will be impacted far more greatly.
It will be at resell/trade-in where the cost impact of depreciation is felt.
The longevity of batteries is also something yet to be proven. Telsa has had to modify its battery warranty to better represent the battery capacity loss over time.
Why would this be so?
The average age of Aussie motor vehicles is 10.1 years. Tasmanians hang onto theirs for a average of 12.8 years.
https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/9309.0Main+Features131%20Jan%202018?OpenDocument=
It’s only an average, supported by a suspicion most self funded owners do not care about the future trade in price.
Someone buys a car new and sells it at some stage. Others but second hand and often sell at a later date Between buying new/second hand and selling there is depreciation on all vehicles (with exception of some collectables/historic cars which can appreciate in value).
Even those who buy new/second hand and keep the car until it’s death will replace their cars at some stage. The loss of value (to wrecking value) over the life is depreciation.
The age of a fleet isn’t relevant as it is the value at purchase (new or second hand) and it transfer value after use (selling or wrecking) which is.
Currently it appears that EVs and ICE lifespans are similar, and if one pays a premium for EVs, then the depreciation is greater over the vehicles life.
The elephant in the room is batteries. It is likely these may need replacement over a EV life is one wishes to maintain range capacity of a vehicle. While an ICE also may need considerable work as well (rings, turbos, pumps, seals, hoses, gaskets etc), these costs are considerably less than the high cost if battery replacement (current battery replacement for Tesla is similar to buying a smaller or cheaper brand ICE vehicle).
Depreciation is currently a killer for EVs is one is looking at the economics of owning a EV or ICE vehicle. The economics can only change if batteries and the vehicles fitted with them become substantially cheaper. This why EV manufacturers lobby governments for very generous subsidies to make them economically competitive.
Irrespective of the purchase price and the ongoing costs of EV’s, the main problem at present is how are road construction and maintenance costs going to be financed without some equivalent contribution to fuel excise?
Isn’t the real lobbying actually public opinion looking for leadership on reducing green house gas emissions more reliably and honestly?
It is fact that governments do subsidise electric vehicles in support of manufacturers.
Note: However it does for liquid fossil fuels. It could also readily tax hydrogen fuel under the current system.
And what if the comparison is between a $75,000 EV and $75,000 ICE vehicle, 5yrs from now, 20 years from now 15years from now? Alternately a $150k+ Audi Etron with a $150k BMW. Past performance is not a reliable guide to future performance.
Any one putting large capital into an ICE today needs to consider the risk it will be worthless tomorrow, or not too far into the future?
No, the lobby groups are the EV industry. This is the main lobby group in Australia and there as others as well.
Most consumers are after cost effective solutions within their own personal budgets. The general consumer won’t mortgage the house to buy a car because it is electric.
This is not a comparison. Furthermore, a $75K vehicle is well outside the budget of most Australians.
One has to compare like for like models, such as the electric and ICE Hyundau Kona or the electric Hyundai IONIQ and the Hyundai Elantra (on which it is based). One sees that for the same manufacturer and effectively the same model, there is a substantial price premium for purchasing a electric over ICE vehicle. Other brands which have similar models in both EV and ICE also reflect similar price premiums for EVs. This is discussed in the RACQ article.
One can’t directly compare a Tesla EV with a ICE vehicle, as Tesla doesn’t produce ICE vehicles. There are articles which compare them to similarly speced BMWs or Mercedes, and these show that the Telsa still has a price premium over these traditional luxury brands for similar sized vehicles.
While energy and maintenance costs of EVs may be cheaper in the short term (and ignoring any other costs), one reported ‘benefit’ is performance. EVs typically outperform ICEs in many cases. A few consumers only buy on performance, however, most buy based on other factors such as upfront cost, size/style/functionality, manufacturer/quality/reputation, safety, reliability etc.
One view point is that consumers are always going to buy what is cheaper, irrespective of means or needs or outcome.
There are alternate view points. This is not about one being absolute. Understanding that many consumers make decisions based on more than the upfront cost or total cost of ownership is a significant factor in decisions for so many different consumer products. Motor vehicles included.
Approx 18,000 BEVs have sold in Australia over 8 years since 2012. In comparison annual passenger vehicle sales are around 800,000 annually. Who has the greatest lobbying ability in that instance?
I’m going to politely leave that discussion as is.
An article regarding the centenary of the founding of Qantas and a couple of key points.
"Fysh and McGinness were tasked with surveying possible aircraft landing strips across western Queensland and the Northern Territory.
As they travelled over rough terrain from Longreach to Darwin in a Ford Model T, at an average speed of 25 kilometres per day, the pair hatched a plan to establish an air service connecting remote communities."
“In December 1919, McGinness came to the aid of a wealthy grazier whose car had broken down in the riverbed.”
No roads. No fun.
In 1905, my Scottish grandfather bought the first motor vehicle in the Canterbury region of NZ. It was a Cadillac, a red one, as even way back then, red cars went faster.
When vehicle registrations and registration numbers were introduced a few years later, he was assigned registration number “1”, and he handed his sons a small brush and a tin of white paint and told them to paint “1” on the car.
He paid £350 for it and sold it in 1912 for around £10. In restored condition,they are worth a small fortune today but the registration number would probably be worth even more.
Back in the 1960’s, most bridges on the Bruce Goat Track in North Qld were Giveway, and many were underwater in the wet season.
By the 1980’s, most had been replaced execpting some between Ayr and Mackay, and all have been replaced now with bridges which rarely go under water.
Without vehicle registration fees and fuel excise, we would still have the roads they had in 1919.
With the phasing out of ICE vehicles, either we quickly introduce a realistic tax system for EV’s or we will just have to wait for flying cars when the road intrastructure deteriorates as happened after the collapse of the Roman Empire.
The vested interests spruik their “reasons” not to charge EV users for using the roads.
No mention of how they expect the roads to be built and maintained.
In much the same way they are now. As I noted previously in another post on this site, the GST and other taxes on fuels are not kept aside for roads. They flow into Federal and State/Territory General Revenues in the same way money from gambling, tobacco, alcohol etc do; those three cost more than they gather but I don’t see many arguing that in Govt. If seeking to make it more about road users paying for the roads than say billing everyone who pays taxes (even those who do not often drive on roads) then I say increase Registration to the level needed. They could increase the cost of electricity to everyone so they make more profit. There is also the options to increase general taxation, get those who avoid tax to actually pay taxes and I think that roads and their costs could be met.
For EV owners just because the fuel they use is mostly cheaper doesn’t mean it isn’t taxed at some point. The panels that people put on their houses, the energy they buy from the Electricity suppliers is taxed, if they buy a fast recharge they pay tax. What seems to me to be the problem is that Govts have been caught with their pants down in hanging so much reliance on FF usage and mining when they have given up so much tax income generating methods in other areas eg manufacturing. Then some don’t like renewables and they see any way to put extra pressure on these as a good choice. Put more recharge stations in and put a charge that covers the cost and allows some revenue without a gross impost on the use of them and this will help pay, they would/should encourage more EV use so that the stations become more heavily used and more money will flow in. Too many in Govt have such narrow vision that they only see problems and don’t see opportunities.
BSA set to join the league of “born again” British bikes.
And electric bikes as well.
Harley Davidson started out as a bicycle maker. It’s now on the path to produce both pedal e-bikes:
Also a range of larger more everyday electric powered motor bikes, road registration required. No pics in case it starts a debate.
Of course in the world market, there are nearly 30million electric vehicles sold every year! Those about to beat up on the stats, China is the number one consumer. The great majority of the sales are classed as Electric scooters. And the source unreliable. At least one too many zeroes!
On China and scooters/bikes.
A more realistic view of 2019 sales of electric vehicles with more than 2/3 wheels is 2.1 million. Forecast sales world wide for 2020 are for 3% of all new vehicle sakes to be EV’s, not including scooters etc.
P.S.
I’m politely avoiding the EV road user costs discussion. This is at least the third time it has popped up in the community discussions. That SA and NSW are considering introducing a new tax on EV’s to collect additional funds has a partisan flavour. More so when the Federal Govt has decided to subsidise EV use by not taxing their fuel consumption at a similar rate to Hydrocarbon based fuels.
The practicalities aside it is there are two states that stand out although NSW is only considering in the future a new big fat tax on EV’s.
It would appear more appropriate for the Commonwealth to wear the costs and to decide what is fair/reasonable (acceptable at the next election) than states to go it alone.
A few articles regarding the phasing out of ICE vehicles in the UK.
Don’t write off hydrogen just yet. 40 cars will not make a difference, but the success or failure of them will.
Now there is something that can be easily taxed. Not much chance that car drivers will have hydrogen generation plants in their home in the near future.
I see that the Victorian Government has anounced a tax of 2.5 cents per kilometer for EVs in their state budget. How they intend to collect this is not clear. The story in the Age news online doesn’t say.
MG has released Australia’s cheapest electric car…
While the range is modest compared to other offering, being $44K on road, it is about $4-6K cheaper than Hyundai’s cheapest offering.
It is worth noting that it is about double the cost of its petrol equivalent, which has about double the range between refils. There is much to be done to make eCars cost effective when compared to their ICE cousins.
Victoria is taking the step for better or worse. Whether or not it is enacted the discussion has begun. Will it sway the balance of electric vs hydrogen or other new fuel technologies?
