In order to avoid increased congestion, further greenhouse warming and lessen Australia’s reliance on imported fossil fuels, a broader mobility strategy is necessary. Electric vehicles have a large role to play in developing smarter, more sustainable Australian cities and their technology has the potential to grow a variety of industries. These effects could be both instantaneous and ongoing, altering Australia’s energy, political and economic dynamics.
Costs to Consumers
While the upfront costs to consumers is substantially more for an electric vehicle over a similar ICE vehicle, the total lifetime costs are minimal in comparison. We asked the Australian Electric Vehicle Association what consumers can expect.
“Most automakers are not currently tooled up to manufacture large numbers of electric cars, so the low production runs are more expensive. Also, most automakers rely on finance arrangements and regular service schedules for revenue. With a substantially reduced maintenance regime, you can expect a higher upfront cost. A new Nissan Leaf is about $39,000 and a new Tesla Model S (P85) is about $150,000. But bear in mind you will be driving around at less than 3 cents per kilometre, while a similarly sized petrol car might cost you about 12 or 14 cents per kilometre. If you drive an average of 14,000 km a year for six years, you will have spent as much overall on your electric car as if you’d been driving on petrol. You’ll also break even sooner if you charge off-peak or charge from roof-top solar.”
Furthermore, electric vehicles registered in the Australian Capital Territory are exempt from vehicle stamp duty and for those registered in Victoria there is a $100 reduction in registration fees each year.
However, additional costs to consumers may include home upgrades in order to support the extra charging load of an electric vehicle. Consumers are likely to need an upgrade if their home was built prior to 1970 and hasn’t already gone through significant renovations.
Low production volumes and labour-intensive manufacturing processes are far too common for electric vehicles sold in Australia, which is why the upfront costs remain high for consumers and is still the most significant barrier to EV technology being more accepted in the country. One manufacturer has even stated that it’s unlikely they’ll ever recover the total research and development costs of its EV through sales.
With a measly 2.5 per cent profit on EV’s, there doesn’t seem to be much incentive for manufacturers or retailers in Australia to offer electric vehicles over ICE counterparts. However, EV’s based on existing vehicle designs could potentially provide a greater profit and lower manufacturing cost as they could be assembled in the same plant.
Battery costs are dropping substantially and swiftly, more than halving in the past four years. This is of huge benefit to the EV market and we’re sure to see more electric vehicles on Australian roads soon as a result. Price per kilowatt hour of the battery normally ranges from USD $500-650. The latest projections indicate a range of $300-325 by 2020, however if prices keep falling at the current rate (8 per cent per year) we may see prices as low as $150 per kWh in the next decade, the price at which it’s believed EV’s will become truly cost competitive with ICE vehicles.
Energy Storage Costs
Even though Australia is one of the biggest exporters of energy in the world, the value of our imports of crude oil, automotive and diesel fuel totalled more than $32 Billion from 2011-2012 alone. In order to reduce Australia’s reliance on imported fuels and the risks of price vulnerability due to oil supply constraints we should be increasing demand for electric vehicles. So far the additional load on the electricity grid due to EVs is rather low. Even in California where EV sales are the highest, utility companies are completely unconcerned with the impact EVs may have on the system, stating that upgrading transformers is well within the normal cost of doing business. Whether you are a renovation company like Empire or http://www.aerosealsolutions.ca/ energy storage can make a huge difference on the bottom line.
As EV market shares remain below one per cent in most major markets, there needs to be a coordinated effort among all stakeholders to address cost issues towards consumers and manufacturers in order to get more electric vehicles on Australian roads.