With Electricity Cheaper Than Petrol, What Is Hindering EV Uptake In Australia?
Originally published on RenewEconomy.
By Sophie Vorrath
Electric vehicle uptake in Australia has been painfully slow, a situation that a recent report estimated could cost the economy more than $350 million over the next 20 years, not to mention the environmental cost and risks associated with energy security.
That report, published by Energy Supply Association of Australia in July, blamed the “do nothing” approach of Australian governments for this, and suggested the introduction of some basic, low-cost incentives could boost EV uptake to almost one million in just 10 years.
But according to Bede Doherty, the e-mobility services manager at BMW-owned Alphabet Fleet, a lack of government subsidies is not what is hindering EV uptake in Australia (although policy support would be helpful). Neither, for that matter, is the perceived lack of public charging infrastructure. But the lack of education is.
A key part of this education should be on cost. As you can see in the graph below, which Doherty used in his presentation at RenewEconomy’s Disruption and the Energy Industry conference in Sydney on Wednesday, the cost of electricity to move a car is less than 2c/km, well below the rising cost of petrol.
The other key bit of information people should know about EVs, he says, is that “range anxiety” – that is, the fear of the EV battery running out of electric charge before reaching its destination – is only an issue with battery EVs (BEVs), or pure electric vehicles, that have no back-up fuel option. For the rest of the EV line-up – hybrid EVs and plug-in hybrid EVs – this is “simply not an issue.”
Which brings us to another myth, says Doherty: that major EV uptake would require huge investment in public charging infrastructure in cities and suburbs.
But according to Doherty – whose big boss happens to own 50 per cent of EV infrastructure company ChargePoint – “only BEVs need it, sometimes. It’s nice, but it’s not essential.” That’s because more than 90 per cent of driving per car per day in Australia amounts to well under 90km, which is less than most current EV models outer range limit.
The other problem for Australia, Doherty told the conference, was a lack of EV model diversity – probably due to the lack of demand – despite the fact that every auto manufacturer in the world has an EV model, and will soon have more.
So what can we do to boost EV uptake? Get people to engage emotionally and intellectually, Doherty says, by highlighting the opportunities.
To illustrate those opportunities, Doherty provided another chart, showing that pure EVs were cheaper than their internal combustion engine (ICE) counterparts, regardless of the range they were driven each year (the average in Australia 14,000km per vehicle).
And while private buyers might still be put off by the initial purchase price, companies should be leading the way.
To help develop an understanding of the long-term savings, Doherty said, company fleets were vital to progress. “Private ownership follows company leadership,” he said.
Already, we are seeing companies in Australia turning to EVs to save money and cut emissions. Particularly large corporates dependent on fleets for their business – taxis being a prime example.
And while Doherty doesn’t see the need for governments to fund subsidies to drive electric vehicle uptake, they could certainly lead by example – like in Norway, which has achieved 100 per cent EV penetration in its government fleets.
Reprinted with permission.
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Please correct the statement that “Norway, which has achieved 100 per cent EV penetration in its government fleets.” I live in Norway, and know for sure that this fact is wrong. Indeed, there is no such thing as a “government fleet” of cars either. Ambulances, fire trucks, police cars and garbage trucks are all still have ICE engines, as does other community service vehicles for postal service, care for the elderly etc.
What Norway has achieved though is a record high EV penetration per capita. This has been done by an extensive set of incentives from the government, both economic and practical (driving in bus lanes, restricted parking spaces for EVs etc).
I am happily driving a Nissan Leaf. It’s both economical, comfortable and free of emissions!
Thank you for pointing out that mistake and giving us the inside informatiion. But I will mention that when we talk about government fleet vehicles in Australia we often just mean passenger vehicles used by the government, which is pretty dumb of us as the government actually uses plenty of other vehicles. So I presume the author means that new passenger vehicles used by the Norwegian government are electric, although I don’t know if that’s actually correct.
Has any Australian city signed up to the green cities movement? Has ant tested electric buses and taxis? A city bus operator can order hundreds of buses at once. That would raise awareness very fast.
Retail electricity prices in Australia are very high (29c/kwh), as in Germany, another ev laggard. The price difference with gasoline is still very large. Perhaps it’s a psychological effect: people think of electricity as expensive and husband its use.
I’ll have you know that Australia has been testing its first electric bus for longer than any other country in the world. (Hmmm, now that I think it through, that doesn’t seem so impressive.)
When people are unfamiliar with something new they are often reluctant to try it out. And sometimes they make up ex cusses to explain why. i saw that with computers, cell phones, solar panels, and now EV.
When desktop computers first came out some coincided it a toy because they couldn’t see how it would help them at work and besides it was too expensive.
for cell phones it was too expensive, didn’t work better then a desk phone and would not work outside of the city or why would I need a phone in the car?
solar was too expensive, doesn’t generate a lot of power or was only for those that wanted to be green.
for computers and cells phone the people dropped there reluctance very quickly. For solar that has taken longer. For electric cars the few manufactures that made them 15 years ago most didn’t believe anyone would buy them. And as a result didn’t produce many, discouraged people from buying them etc. now that people see what a good electric car can do (Tesla), most manufactures are selling EVs and more people are interested in buying them. In 20 years we will see that Fossil fueled cars will start to look like typewriters, and rotary dial phones, and the model T.
Australia is isolated enough that many there probably are not aware as to how fast things are changing in the US and Europe. that is changing.
Cell phones and computers brought/bring immediate advantages. Solar panels simply replaced something else and while prices were higher the savings didn’t drive a lot of adoption.
Get the purchase price of a 150/200 mile range EV down close to that of an ICEV and the transition will take off running.
I live in W. Aust. I’ve never seen a Leaf or a Tesla. The only plugins I’ve seen are a couple of Mievs and a couple of Volts. There is a Miev that I see regularly at my local Supermarket. This State has very little charging infrastructure, has a population of only 2.6 million but is 12 times the size of Britain. A Volt is a good option here. It would cover the daily work drive for most people in EV mode. For a two car family something like a Miev is okay if it covers the daily commute. Many people have 4WD vehicles here to get to fishing and camping spots that must be accessed by beach driving or via very rough tracks. I’m not a fishing or camping person so my 14 year old little 1800 cc hatch is fine. I can cycle to work in 10 minutes so I don’t have to worry about a gasoline bill for the daily commute.
I live in the San Francisco bay area. Its not unusual to see two EVs a day during my short commute to work. When I purchased my volt earlier this year the dealer had almost no trucks on the lot. It was full of mostly small cars and a lot of volts. I was told the volt was their top seller. Chargers are being installed in a lot of places. Unfortunately many of those chargers require you to preregister to get a access card of FOB to activate the charger. Stupid buisness model.
I’d think the reasons for slow uptake in WA would be similar to the reasons in Texas—large distances between cities.
We do have a much larger population and plenty more chargers, though.
Yes, lack of education is the biggest problem. I live in N.Tx, and I doubt more than 10% of people know that plug-in cars exist. They sure don’t know that plug-ins can be “filled up” for 60 cents to $1 per gallon equivalent. Problem: the dealerships aren’t even trying to sell plug-ins. Most of them steer customers to ICE cars.
There is a need now for an affordable 4wd utility and van platform vehicle EV that will tow 1800kg and has a 1000kg load capability and that wont happen until batteries are 80% cheaper than what they are now and half the weight. Will likely be the case in about 10 years time though.
Cost is a obstacle, but I don’t think weight is. The larger the vehicle the smaller the extra weight as a proportion of total weight.
We have electric vehicles that have 300,000kg load capacity in Australia. And some of them drive themselves. They are diesel electric at the moment, or in a couple of cases CNG electric, but there is no technical reason why they couldn’t have their generators replaced with batteries. Or given how they are used, a bank of capacitors that would be quickly recharged after each time the mining truck dumps a load.
There is only one company that has marketed an electric car in Australia and that is Tesla. No other country is interested in Australia as a market. All other production electric cars have only been sold to individual buyers at special, first adopter, high prices.
Now I can understand holding off on marketing to Australia until all the bugs have been worked out of a model, but after Leaf adjusted its battery pack to handle conditions in hot US states there was still no interest in marketing it in Australia.
Australia has cheaper gasoline prices than Europe and in addition to that we also run many commercial vehicles off LPG, and with no incentives for electric cars and no fuel efficiency standards what so ever except for a requirement that a new car’s fuel efficiency be shown on a sticker on the windshield, Australia probably seems like a tough sell. And they are. Given high capital costs than in Japan, Europe, or the US, marginal cars are pretty marginal here. If someone only cares about their wallet and not what portion of a child their actions drown, then electric cars don’t pay for themselves here yet, even if we could get them at their overseas prices instead of the special Australian mark up. (Thanks Tesla for selling your car for what it costs in the US.)
But it’s close. And that’s the thing about money. As soon as something steps over that cheaper than the competition line, it’s like a switch gets flipped and suddenly instead of being repulsed, money flies towards it.
It might not be this year, but soon an electric vehicle, plug-in or not, will be produced that will beat out prius and LPG cars as taxis on total costs. Business fleets will go electric, and people will start buying all electric vehicles as one of their family cars to save money while driving about town.
Now personally I would be fine with Australia leading the world in rooftop solar installation and the elimination of coal from electricity generation and let other countries do the heavy lifting on electric vehicles. But unfortunately our Abbotts have decided to go for none of the above.
The Aussie car market is small and remote. Only Teslas are expensive enough to justify the shipping cost.
All the foreign made internal combustion engine cars here must know the secret shortcut.
HAR!
Hi Ronald, BMW is also doing a good job marketing their i3 in Oz, and it is an awesome car, and I know several owners. I drive a Leaf, which hasn’t been marketed strongly, but Nissan have cut the price sharply to $35K since bringing it into the country in 2012. I agree that Australia is a tough sell at present, but making people aware of EVs is the first step. I’ve had lots of interest when taking part in EV displays. I’m running my car on off-peak electricity, which comes to 3 1/2 c per km once I factor in buying certified GreenPower.
I thought BMW i3s had a mark up over what they costs in Germany, but I certainly could be wrong about this. I hope I am. Anyway, I went to BMW’s Australian site and I could not find a price for it. Maybe the price is there somewhere, but I did not have the patience to look using the copper wire and animal bone internet we have here in Adelaide.
Glad to hear you have made the step to electric driving and are perking people’s interet with your Leaf. My sister gave me a leaf for my birthday, but unfortunately it was green and photosynthesized. (She thought it was funny.)
The BMW i3 either comes as straight electric or electric with a small petrol booster engine (Rex model) that recharges the battery if needed. The cost in Australia goes from about 70 – 82K depending on the specs. I don’t know the cost in Germany, but it isn’t unusual for many types of cars to cost more in Australia than OS, particularly in the luxury class. We did have a test drive before buying the Leaf, and were very impressed with the great design and performance – however, the Leaf fits five, has a larger boot and is a lot cheaper, and is still nicer to drive than any petrol car we’ve owned.
After 5 years EV sales are 0.1%, after ten more it might be 1%. People who think EV will be the next revolution are the same ones who don’t own one, but are sure YOU need to.
Okay, so sjc_1, to me it seems you are saying that electric cars won’t be cheaper overall than ICE cars, plus whatever externalities are priced in, by 2030 in Australia.
I wouldn’t take that bet. Once produced en masse, an electric car sans battery pack (three French words in one sentence!) is considerably cheaper than an otherwise identical gasoline car as it is far simpler mechanically. And that simpliciity should greatly reduce maintenance costs. By 2030 battery packs could be $100 a kilowatt-hour or much less. And are likely to have a much improved lifespan as well. And this will make for very low running costs.
And then there’s the question of where the oil is going to come from to fuel cars if only 1% of car sales will be electric by 2030. Unless you are expecting very large increases in fuel efficiency in ICE cars, I would expect demand to really push up oil prices before then if electric car uptake is negligible.
avec, ne sans
(And I had to look up all three words. My French 101 is a bit rusty after 50 years.)
Pretty sure it’s sans – without a battery pack an electric car is considerably cheaper than an ICE car. Sans means “without” as in the Comic Sans font, which means, “We should do without the Comic font”. Unfortunately far too many people have failed to pay attention to its name.
And I’m pretty sure I’m right. I did learn French from a Scottish Australian who had never been to France and surely there can’t be a better education than that, och ay!
I guess I should have put in more froggy words.
Once battery prices drop to where they are expected to be in a couple of years avec will be the correct word.
Yep, once they get cheap enough they’ll even replace the diesel in diesel electric. I’ve given some thought to how to power combine harvesters which sit around doing nothing most of the time and then are used fairly continuously for a couple of weeks. Currently the answer is to use diesel electric and then offset the emissions but it doesn’t have to stay that way.
Swappable batteries. Rent them. Move them from area to area as need arises. Charge them up overnight and take them out to the field in the morning.
With a ‘big wire’ in the area early day use batteries would be ready for later day use.
Once batteries get cheap enough that works, though the batteries might be on the truck that takes the grain rather than on the combine harvester, and one charges while the other accepts grain, but in the meantime there will need to be an alternate use for the batteries when it is not harvest season because that’s a lot of capital to have sitting around in a shed for most of the year. Hence diesel electric might be cheaper for quite some time, although that could be biodiesel, or off-set fossil fuel diesel. A combine harvester could even be powered by chaff and spit out biochar, but that’s probably not going to happen.
With batteries there is the problem of how to charge them either on off grid farms or on farms which might only be able to draw a few kilowatts from the grid. One answer is unfold portable solar panels but that leaves the problem of what to do at night and more harvesting is likely to be done at night to make better use of capital what with humans not really being a needed to operate combine harvesters anymore, although dew conditions can limit the amount of harvesting that it is practical to do. A chaff powered generator could be used, but biodiesel might be a better option.
There are other things that could be done. For example, uncombined harvesters could be used instead of combined harvesters, which perform less steps at one time and so draw less energy and the other steps can be done later. This may not turn out to be practical, but is an option. Harvesters could wear hats made out of solar cells to provide some or potentially all their power, although current harvesters couldn’t have their needs met by any practical sized hat.
And finally, a competely different approach could be used. A lot of energy could be saved if instead of the indiscriminate method currently used, each head of grain was neatly snipped off at the exact right height and caught. Crazy you say? Well that’s what they said about the guy who ate his own underwear. But he won a prize which was a special jacket that lets him hug himself all day, so whose laughing now? He is. Maniacally.
Batteries are on route to being cheaper than ICEs.
Well-designed, battery packs can be used in a variety of ag machinery. They could even be ‘rented’ to the grid when the farm isn’t using them.
And, like labor, batteries could move with the crop season, doing harvest work in one area and then ‘next season’ cultivation in another.
Charging could be done at central stations, not unlike how product is move to warehouses and elevators.
Next revolution is going to be CNG cars and Trucks. They are only marginally more expensive than a gasoline vehicle and the fuel is more than $1 per gallon cheaper. Plus, it is cleaner than gasoline and domestically produced.
I wouldn’t bet a bent penny on that happening.
EV sales?
They’re not selling them.. not even trying.. they have maybe an Mitsu iEV at the lot and that’s it.
My dad wanted an electric A class badly.. dealership told him not in another 4 years available in Oz.
He TEST-DROVE it in Germany 2 months earlier.
Talk about selling NOT.
The cars are too expensive and don’t offer an attractive breakeven point when you consider life of the vehicle, range issues, potential higher maintenance costs, etc. Gasoline vehicles are just cheaper and consumers are self interested, so will choose the lowest cost option available 99% of the time.
That will not hold.
Rumors are very strong that Tesla will be producing battery packs with Panasonic cells for $150/kWh or less once the Gigafactory is rolling.
That will make it cheaper to manufacturer a 200 mile range EV than a same-model ICEV.
The breakeven point will occur when the buyer signs the contract. And additional savings will flow as the EV is driven.
Watch for the 99% to flip over the next few years.
what are those ‘potential higher maintenance costs’ of EV’s you speak of please?
Attractive breakeven point depend on price and for an EV that’s tied to the battery price. Just check out some projections of that one and EV’s will be on par by 2020 with an comparable ICE car.
Range issues are for people who drive more than 100km a day TODAY and who live in a place that has got no socket for overnight charging.
Everybody else doesn’t have this phobia.
I’m almost tempted to buy a used Nissan Leaf for my next vehicle, and I don’t even have a home charger.
On plugshare.com, I can find ~67 public and 20+ private chargers within a twelve mile radius of my home, and any potential commute is 20 miles or less each way.
What higher costs, pray tell? Conventional car engines have hundreds if not thousands of parts, plus a transmission with hundreds more. EVs have only a few moving parts and no transmission or gears.
I’d say the answer is distance (long), followed by density (low).