EV Torque – sales and storms

Well, it’s all happening! The Ministry of Transport has confirmed that EV registrations in New Zealand have now surpassed 30,000 units. It doesn’t seem that long ago that there were only 500 EVs out there, before the momentum slowly gathered. We hit 10,000 units around 2018, and then 20,000 units in 2020.

The first month of the rebates generated nearly 2000 registrations of electrified vehicles, by far the biggest month ever and more than all the total sales for 2016. It surprised me that the importers had the stock to meet demand, given the relatively short lead times.

The best selling pure electric models in July were the Tesla Model 3, the MG ZS, and the Hyundai Kona. The Mitsubishi Outlander was the most popular plug-in hybrid.

I have been contacted by people that were ready to replace their car but weren’t considering an electric vehicle. The Government’s rebate motivated them to test drive an EV and they ultimately purchased one, some even forward ordering to get the spec they wanted.

There have been varying reports as to the readiness of car owners to switch to an EV but with fuel prices increasing and a number of EV offerings priced beneath the $80,000 rebate price cut-off, demand does seem to exist.

The next few months of sales following implementation of the rebate will be interesting to monitor. We may have close to twice the numbers of EVs on our roads at the end of the year compared with last year. I’m reliably informed that forward orders for EVs are very good, with many new car importers also pointing to more new models coming to market. However, not all fall under the $80,000 price threshold but I feel sure that many will be trying hard to achieve a retail price point below that figure.

Additionally there has been a lot of interest in stock shortages. This is as much through increased demand as it is about semiconductor chip shortages.

Used cars are still an issue with importers keen to increase their volumes but facing increased pricing created by demand here in New Zealand, and Aussie dealers are also now competing for constrained supply at the Japanese auctions. Again, this will be interesting to monitor in the coming months.

Conversely, and not surprisingly, ute sales continue at a high rate. And why wouldn’t they? The Clean Car fees (or penalty) will be introduced as of 1 Jan 2022. This will apply to new vehicle purchases so there’s a window to buy before prices rise.

Further, Minister of Revenue, David Parker, is looking into how FBT rules are being enforced by the IRD on double-cab utes bought

by businesses. It has been perceived wisdom that all utes are exempt from FBT, which has incentivised their uptake as a work vehicle. You may have wondered why a graphic designer needs a ute? However, Parker has confirmed that FBT does not apply to work vehicles like single-cab utes and vans, which are not primarily passenger vehicles. However, FBT should be applied to any passenger vehicle, including a double-cab ute.

Despite all the good news with EV sales, we had a blackout earlier in August, when Transpower asked all its distributors to help shed power to meet a New Zealand peak load record. Tuesday 10 August 2021 etched itself into history as the day we went into electricity lock down, though only for a short period. Blame was being dished out in all directions, with social media feeds suggesting it was possibly all the EV owners deciding to charge their cars at the same time. Yeah, Nah. Not that simple I’m afraid.

The cold snap was extreme and it seems a number of the power generators had multiple issues that conspired to create the problem. A full investigation is underway which might make for some interesting reading!

Best we know soon what the issue was so risks of a recurrence can be mitigated before EVs are a much greater share of the NZ fleet.

But it is a good time to go and test drive an electric vehicle – it may just surprise you.

This article first appeared in the September 2021 issue of NZ Autocar magazine.