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Graph of the Day: Electric cars are coming

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As Tesla approaches production of its mass-market Model 3, an increasing array of better and cheaper electric vehicles are also being rolled out around the world by both new and traditional car makers – including a new and improved, and still pretty cheap, version of the Nissan Leaf.

This trend, which is neatly depicted in the Bloomberg chart below, suggests a turning of the tide in the long and troubled ICE cars vs electric cars story. As the CEO of International Lithium Corp, Kirill Klip, puts it, “we are talking here about the magical 20/200” when $US20,000 buys you an EV with a better performance than a BMW and a range of around 350km.

“It means that not only the cost of ownership for EV is lower than a comparable ICE car, but a beautiful electric car is cheaper and better than anything ICE (Internal Combustion Engine) can offer,” Klip said on his blog this week. “We are talking here about all cars being electric much faster than you think.”

Screen Shot 2017-02-12 at 20.45.02Is this true for Australia, though, where the slow uptake of electric vehicles has been driven by a vicious circle of lack of incentives or support infrastructure, an increasingly restricted range of available local EV models, and cost.

As Phil O’Neil, a senior associate, new energy, at Advisian, said last September, “electric vehicles will become increasingly attractive from an economic perspective,” even in Australia. But we could still be looking at “a couple of decades to change-over from full petrol to full electric, which reflects the normal turnover in the personal car fleet,” he said.

“However, the rapid adoption of car sharing and autonomous vehicles has the potential to reduce this period dramatically.”  

  • Ken Dyer

    Reference to carsales.com.au reveals that out of more than 220,000 vehicles for sale, only 67 are electric. This is an improvement from about 2 months ago, when 55 electric cars were for sale. Of these for sale, over 50 are Teslas, with the balance made up of BMW and Nissan. Australia is very badly served by the car industry for electric cars, and it wont change any time soon under the current Federal Government.

    • Ian

      Certainly sounds like another good angle for labour and greens to take to the next election

      • Ken, Ian – I like electric vehicles as well, but it seems to me that the market is working just fine. Each of the cars that has been certified for use of Australian roads is available for sale. I don’t agree that the federal government should be promoting one type of drivetrain over another. What’s the benefit to Australia?

        Cheers.

        Dave P.

        • Ian

          A few benefits include
          No need to import liquid fuels at great cost, reducing the trade deficit
          Less noise in cities in particular. (esp buses)
          Lower emissions, esp as grid becomes more renewable

          • Kevfromspace

            You forgot to mention
            – no tailpipe emissions (important in places like Newcastle and coal mining towns where the air is horrid), which will put less pressure on australian hospitals and health sector
            – no fuel costs & service fees for the consumer
            – potential for grid support (with the help of AEMC rule changes and companies such as Reposit Power), ancillary services, demand management and reduced network expenditure
            – assisting australia reach its Paris emissions target (which is impossible under current policy frameworks and political gridlock on this issue)
            – lowering the crash rate (Modern EVs have fantastic 0-100 acceleration, assisting lane switching, and of course Teslas are equipped with autopilot software which reduces the crash rate by over 40% vs human drivers)

            The list goes on!

          • trackdaze

            Add energy security to the trade deficit point from not importing the majority of our fuel.

        • George Darroch

          Reduced fossil fuel emissions, improved health of its residents?

        • @sunnywindy:disqus @trackdaze:disqus @disqus_wo77jF1qvH:disqus @georgedarroch:disqus – I accept that EV can make positive contributions in all those areas. I struggle to quantify any of them however.

          Put it another way – how much money should the federal government spend to promote EVs in pursuit of these outcomes?

          By the way, I’d support an additional tax on the sale of new vehicles with internal combustion engines. I’d just rather see the money raised go into programs where the benefits are a bit easier to quantify (e.g. foreign aid for sanitation projects, saving countless innocent lives for very small sums of money).

          Cheers.

          Dave P.

          • trackdaze

            Australia imports $2billion of fuel. 90%. ….per month!

            Quantifiable enough no?

          • No, not really. What are you suggesting? Spend $x to avoid $y of oil imports?

          • trackdaze

            Only if one is interested in a good Return on investment.

          • Just_Chris

            Doctors for the environment have suggested that NSW spends an additional $15 billion a year in healthcare costs due to air pollution.

            Even if it was only $1 million, I don’t see why we can’t tax high emission vehicles more than low emission vehicles. The government is not a profit making organization revenue raised from new vehicle taxes doesn’t, IMO, have to go anywhere specific. There are roughly 1.1 million car sold per year. Why can’t we tax the top emitting 50% of those new cars by $5,000? $5.5 billion a year would go a long way to budget repair.

        • Just_Chris

          Australia is currently shutting down its refining industry. This leads to the rather bizarre situation where we export our oil to Singapore and then buy it back once it is refined. You are also twice as likely to die in Australia from the pollution a car produces than to die in a road accident. I’d be quite happy to import an electric car from the many models available in the uk, as you could do in New Zealand but I can’t because Australian law forbids it. I would rather the government choose which drive train than a multinational company that is looking dump cars it can’t sell in the eu or USA because of new emissions standards.

          • Let’s get a few facts straight:
            * “Australia” doesn’t have a refining industry. Large companies like BP, Shell and Chevron have been closing or selling their small, ageing refineries based in Australia and shifting production of crude oil products to larger refineries across SE Asia. It allows them greater margin/lower cost than refining in Australia.

            * I’d like to see the source for the “twice as likely to die” statistic, but I’ll take it at face value. There were 1,290 deaths on Australian roads in the 12 months to January 2017. Rounding up, you are saying that pollution from cars causes 2,600 deaths per year.

            * Let’s say that, to replace the entire Australian light car fleet with electric vehicles, we’d need to subsidise the cost of EVs by $10k. With 16m light vehicles on our roads, that’s $160b. I’ll be generous and say this removes all pollution and there are no more deaths. Assume the subsidy gets us there 10 years ahead of the free market outcome. 26k lives saved at a cost of $6.1m each. How much is a life worth?

            * You are being somewhat misleading in mixing up NZ “grey import” laws with a discussion about EV imports. Your NZ neighbour can also import a Hummer from the UK if he wants. I’d suggest that changing that law would see a lot more European internal combustion engine powered vehicles imported.

            * Australia has very strict emissions standards and every vehicle needs to be certified for sale according to our laws. I’d be surprised if there were any evidence for your claim of dumping, given that our laws and customs (e.g. left hand drive) effectively require an Australian version of each vehicle to be manufactured.

            I like EVs. I just don’t see a case for further government intervention in this market.

            Cheers.

            Dave P.

          • Just_Chris

            See my comments below:

            * “Australia” doesn’t have a refining industry. Large companies like BP, Shell and Chevron have been closing or selling their small, ageing refineries based in Australia and shifting production of crude oil products to larger refineries across SE Asia. It allows them greater margin/lower cost than refining in Australia.

            Australia used to have sufficient refining capacity to supply its own market but now does not. You are correct, this is simple economics, but my point is there is little benefit for Australia to continue to rely so heavily on oil based transport. Conversely we make all our own power – why don’t we adopt policy settings that favor a domestically produced product over an imported one?

            * I’d like to see the source for the “twice as likely to die” statistic, but I’ll take it at face value. There were 1,290 deaths on Australian roads in the 12 months to January 2017. Rounding up, you are saying that pollution from cars causes 2,600 deaths per year.

            The unfortunate thing about air pollution is that its effect can only be estimated based on air quality data and modeled health effects. The WHO do a good job looking at this and they are the source of the 3000 persons per year death rate due to urban pollution but there are a range of estimates from around 2000-6000. This is dwarfed by places like the UK which are estimated that the number is around 40,000. As Australian cities get bigger and more congested this will get worse. I see no reason to wait until the number is 40,000 before we do something about it, especially since it will take 10 years to do something about it.

            * Let’s say that, to replace the entire Australian light car fleet with electric vehicles, we’d need to subsidise the cost of EVs by $10k. With 16m light vehicles on our roads, that’s $160b. I’ll be generous and say this removes all pollution and there are no more deaths. Assume the subsidy gets us there 10 years ahead of the free market outcome. 26k lives saved at a cost of $6.1m each. How much is a life worth?

            Subsidising new vehicle purchases has been found globally to be less effective than taxing new vehicle purchases. I don’t think we need to urgently replace 100% of the vehicle fleet but I see no reason why we couldn’t change the luxury car tax so that a low emission vehicle is considered to be emitting less than 75 g/CO2/km (instead of the 130 g/CO2/km) and to change the bands so that a “high” emitting vehicle is taxed from $50k and a low emitting vehicle is exempt up to $100k. A $51k vehicle might not be a luxury but since the tax would be 30% on every dollar over $50k then it would scale as the vehicle got more luxurious. This would be a revenue generating tax and as far as I see it not really have any massive down side. I could understand there needing to be exemptions for the disabled or certain specialist work vehicles but I see no reason why this tax could be applied pretty broadly including on company cars and work vehicles. I also don’t understand why we can’t have a long term efficiency standard. The net benefit of this is positive, as in it saves the country money overall. Why, as a nation, we don’t do this beggars belief, currently we pay more to have a more polluted country.

            * You are being somewhat misleading in mixing up NZ “grey import” laws with a discussion about EV imports. Your NZ neighbour can also import a Hummer from the UK if he wants. I’d suggest that changing that law would see a lot more European internal combustion engine powered vehicles imported.

            There are a significant number of EV’s being imported into New Zealand via the grey import laws but I suspect you are right that there are also a lot of high emitting vehicles as well. My point is that in Australia it is not a free market, we do not choose which cars are imported that decision is made by large corporations that are largely unregulated.

            * Australia has very strict emissions standards and every vehicle needs to be certified for sale according to our laws. I’d be surprised if there were any evidence for your claim of dumping, given that our laws and customs (e.g. left hand drive) effectively require an Australian version of each vehicle to be manufactured.

            Australian emissions standards are lower than both the USA and the EU. Australia only requires diesel vehicles to meet the CAT5 emission standard. This is significantly less stringent than the EU CAT6 standard. When it was determined that VW had been cheating on their emissions test it was very telling that in Australia they were prosecuted under consumer law because they lied rather than environmental emission laws because they where not meeting the emission standard. In terms of evidence that the supply of low emissions vehicles to Australia is being restricted in favor of higher emitting vehicles the latest government draft regulation statement on vehicle efficiency (https://infrastructure.gov.au/roads/environment/forum/) shows (table 3) that the most efficient variant of car models offered in Australia are 27% less efficient than in the UK. Pollution is the classic example of a market failure, to expect car companies to import and sell more efficient cars that have smaller profit margins is unrealistic – As far as I am aware there is no efficiency standard / target in Australia.

          • Thanks @disqus_DoHRzKpnPg:disqus for your considered response. One of the reasons I enjoy visiting the RenewEconomy website is (virtual) conversations such as this.

            I’d be happier with a tax on pollution than a subsidy for EVs. Unfortunately, the politics is tough. The ALP can’t introduce it because they will cop it from ACOSS and the unions (“out of touch”). The LNP won’t go near it, because it’s an additional tax and it won’t swing a single vote their way.

            Perhaps needless to say, but I don’t have much faith in politicians to solve these types of problems.

            Cheers.

            Dave P.

          • Just_Chris

            Hi David, pleasure, have you considered commenting on the current policy document? You can make a personal submission at

            https://infrastructure.gov.au/roads/environment/forum/

            It needs to be in before the 10th of March but it is essentially an e-mail telling the parliamentary committee what you would like them to do. Last round they had 80 submissions so you will get more exposure of your views there than pretty much anywhere else.

          • Done. Thanks for the heads-up Chris.

    • EV Positive
  • Ian Mclaughlin

    There is only one thing stopping the uptake of EV’s in Australia– that is they are not for sale. With so many 2-3 or more car families and Aussies voracious appetite for new technology some first serious importer is going to make a fortune!!

    • Bristolboy

      It’s funny how Australia is a world leader in domestic solar and battery storage, but so far behind in EV adoption, especially considering in many markets ownership of domestic solar and EVs are strongly correlated.

    • aggri1

      Absolutely agree. I’d be interested in the Renault ZOE, supposed to be a pretty decent EV and of course not-available-here, or the Bolt, or an upgraded Leaf. Alas, not for this backwards colony.

      • EV Positive

        If enough people walked into Renault and demanded the ZOE it would be available in Australia.

    • EV Positive

      “one thing stopping the uptake of EV’s in Australia– that is they are not for sale.”
      I wonder how those 2 EV came to be in my garage then? Total purchase for both was $57k. Have been driving EV for over 2 years now, you’re obviously not looking hard enough.
      Manufacturers sell what consumers consume … so start consuming EV!

      • Ian Mclaughlin

        That’s interesting what are they? I am not in the market for an EV until I stop towing a caravan with a Ford Territory, my only car, I don’t need 2 but as I said lots of people have more than 1 in a family.

        • EV Positive

          It looks like my original reply was censored as it included a link to a blog about towing.
          We have an 2010 iMiEV which we purchased 2nd hand for $14k just over 2 years ago. Its ugly however the flipside is that you can park it anywhere. We have been saving $2300/yr as its only $1.20 per 100km to run on offpeak electricity.
          Our other EV is an Outlander PHEV which we purchased for $43k new nearly 2 years ago. We’ve done 22Kkm with an average fuel consumption of 3.4 l/100km. Within the 50km EV range it only costs $2 per 100km to run on off peak electricity. The Outlander PHEV will tow a small caravan up to 1500kg.

          • No one has censored any comment on this story thanks very much.

          • Ian Mclaughlin

            Just looked up your cars as they are no longer available in Australia it seems but their new cars prices were ridiculous, hence no sales only for the early adopters! I remember them both yes the iMiev is quirky but OK in my view. The outlander is good but my brand new petrol Territory 2015 was $37888 drive away with about $6000 worth of extras mainly towing packages. As I travel less than about 5000KM a year when not towing the caravan it’s fuel usage at just under 10ltr/100km, almost all country driving, is quite good for a 2 tonne large petrol SUV. There is, as I said no real option, for a $20,000 EV but there will be VERY soon overseas. However as we pay a up to twice the price for imported cars here than in other markets it will take a while!

      • Peter Campbell

        I have been driving electric for 8 years. Total purchase price for both was $44k. One was an ex-demo 2012 iMiEV a bit over three years ago, the other was the Daihatsu charade I converted 8 years ago – still going fine on original LiFePO4 battery.
        And the iMiEV is not ‘ugly’ – What an outrageous comment! It is Kawaii! https://en.wikipedia.org/wiki/Kawaii

  • Jimbo

    Nissan has a good car in the LEAF but they refuse to sell them in Australia. The Mitsubishi Outlander is a good hybrid. If you see one advertised and you make a beeline for that dealer, they will tell you it is sold, but they have a good diesel one you can have. The dealers make a lot of money from after sales service that is not needed with an electric car. Tesla will change all that.

    • Calamity_Jean

      “The Mitsubishi Outlander is a good hybrid. If you see one advertised and you make a beeline for that dealer, they will tell you it is sold….”

      That’s a technique called “bait and switch”, and it’s illegal in the US (where I am). Can you order one and have it shipped to the dealer, rather than having to wait until the dealer has one in stock?

    • Bristolboy

      The thing about the Mitsubishi Outlander is I understand it can actually cost more in aftersales service as it in effect has two drive trains, each with their own challenges.

      • Jimbo

        Bristolboy
        It is true what you say. If you can get by on battery alone and not use the petrol motor the costs are minimised. It is for this reason that manufacturers know that the hybrid is a short term solution. The full battery vehicle is the complete solution.

      • Michael Vorstermans

        The only service item in the PHEV’s electric drivetrain is the motor liquid cooling loop, which the manual states should be drained and refilled every 20 years….the ICE needs an oil change every 15K, and the transmission fluid every 45K. Brake wear is so minimal, the pads might last the life of the car.

  • Kevin Brown

    I want a Chevvy Bolt!! Why won’t Holden sell me one? There is a spare factory in SA that could produce a RH drive version!

    • trackdaze

      Scared off by sovereign risk from when Abbott effectively chased the manufacturers out.

    • EV Positive

      Have you asked Holden that? Better still, tell Holden you won’t by one of their cars until they sell an EV. If enough people had bought the Volt then the Bolt would be available here. The Bolt is being sold as the Ampera in Europe, there are just simply not enough customers in Australia demanding an EV.

      • Kevin Brown

        I certainly have asked Holden hoping that they get the message. It’s so frustrating. It was designed by Holden’s Australian design team and the small SUV design is much more practical than the Tesla Model 3 sedan. I understand that there is no RH drive version yet and it will be a long time before demand is met for the LH drive version.

        Perhaps the SA Government could help fund tooling up for a RH drive version and produce it in Holden’s Elizabeth plant when it ceases production in October.

    • Peter Campbell

      A friend tried to buy a Nissan Leaf several years ago. His nearest local Nissan dealer tried to talk him out of it. He went to another local Nissan dealer who happily sold him one. Now he tells everyone which dealer to go to.

  • Radbug

    No more oil change, no more tune ups. I predict no more ICE-powered small cars made, globally, by Christmas 2018, such is the level of competition between global car makers. Christmas 2018 will be crisis time for Australian energy regulators.

    • trackdaze

      Sounds good but infortunelty they cant produce enough batteries or cars by then.

      With battery production roughly doubling year on year they will maybe at a big stretch be in a possition to produce 4million per year by end 2018.

      Electric cars will help the grid. Soaking up excess power when its plentiful and discharging a little when the price is high to reduce peak demand.

      • Radbug

        Trackdaze, THERE WILL BE NO EXCESS POWER! Not after Hazelwood closes. These new Li/Na batteries will have a charge density greater 750mAh/gm, that’s 3 times the average Li-ion charge density. This new density level implies a drawdown rate on the output of the remaining coal-fired/gas-fired generators that will be disastrous for AEMO. Trackdaze, I predict that by the time the next Federal election comes along (assuming 7/2019), there’ll be ongoing load shedding across Adelaide/Mel/Syd/Bne. These new batteries will reduce the Turnbull government to chaos.

        • trackdaze

          So there is never any excess even at night?

          Lets unpack this a little more. Since the announcement of the closure of the 1.5Gw hazelwood to its closure roughly 250Mw of renewables have been installed.

          Further, between it closure and end of 2017 another 1.5GW of wind,solar and rooftop. And about 150-200Mw of battery will be installed.

          Coal fired NSW was short for a few hours on the hottest day of the year by how much?

        • Peter Campbell

          Do you actually read the articles on this website?

  • Rob

    There is only one real barrier to the mass take up of 100% electric vehicles in Australia, and that is, there is generally nowhere to quickly recharge them! We need fast chargers rolled out around Australia. If every petrol service station had one fast charger installed you would see the transition to EVs quickly accelerate. Yes there are other barriers such as price and model choice, but being able to easily, quickly, reliably and conveniently recharge is the big one.

    • Kevfromspace

      Most commuters don’t travel over 30kms in the average day. This kind of charge ccan easily be obtained overnight at home. The biggest barriers to EVs in EVERY country are availability, variability of vehicle options, costs and consumer awareness.

      • Peter Campbell

        Yes. Long range EVs are nice but in the meantime, many households with two cars have one that never leaves town and only ever does local trips. That car should be a modest EV like the Leaf or iMiEV (which are actually pretty nice). I go for months on end without driving our petrol car which is only saved from being a waste of space because my daughter can use it.

  • Brunel

    No need to ban petrol cars then. EVs will outsell petrol cars on merit.

  • Craig Allen

    There is currently a Tesla X on display on the 6th floor of Myers in Melbourne (with a left side stealing wheel). The sales rep told me the base cost is $160,000 …!

  • TrickyRicky

    Old graph, the 100d is far more to the right already.

  • Kirill Klip

    Dear Sophie,

    Thank you for your article!

    Please note that my name is Kirill and our company is International Lithium Corp.

    Best

    • Sophie Vorrath

      Hi Kirill,
      Oh dear. Thanks for pointing that out. Our subeditor was clearly having a bad day! :/

  • Kirill Klip

    For those who is interested:

    Energy rEVolution: Who Will Be Left Holding The Bag? Oil And Gas Companies Are Facing Major Technological Disruption.

    Back Into The Future: Lithium Will Power Us For The Next 50 Years And Then Robots.

    http://kirillklip.blogspot.co.uk/2017/03/energy-revolution-who-will-be-left.html

    Best