Petrol prices got you looking at EVs?
In this time of rising fuel prices, some of my friends are asking me about electric vehicles, and it’s a trend I’m seeing everywhere, with 20+ new members daily to the NZ EV Owners group, and similar surges in membership to the NZEV reddit, and the NZ Buy/Sell EV group.
For those of you hopping on board, that’s great, welcome to the EV lifestyle. For those of you who still have questions, feel like they are too expensive, or that you can’t get one that fits your needs, maybe I can help add to your understanding. This article is going to be aimed at the entry-level of the market, for those people that really struggle to justify the upfront cost of an EV, and for people that maybe just need more details on EVs.
You may have heard about the Government rebate on EVs. This only applies to either new EVs or freshly imported EVs, and we’re going to just look at vehicles that don’t meet either of those criteria.
I’ve been driving electric vehicles since 2017, I’ve owned three different Nissan Leafs, I’ve helped run an electric car-sharing operation with a fleet of Hyundai Ioniqs and BMW i3s, and I volunteer with BetterNZ trust, a group set up to promote the uptake and adoption of EVs in New Zealand. So I have some good practical, background, and operational experience to draw upon when it comes to helping you with this journey.
What’s the price of entry?
If you just have a small budget and/or you don’t drive much outside of the town you live in, you could get the cheapest second-hand Nissan Leaf for between $7000 and $10,000. That will get you a car that will do between 80 and 100km per charge, will charge overnight from a normal power point, and, on average, will cost about $2.50 every time you charge it.
However, the greatest deterrent for many people when it comes to EVs is the high upfront cost — some of you may already have a car that is worth that much. For others, the most expensive car you’ve ever owned might be $2000, or $5000 — even a “cheap” EV could be a big step up.
Thousands of dollars may sound like a lot, but if you think about the context of savings of petrol, it’s far more affordable than it seems. Unlike petrol vehicles, an EV will significantly save you money compared to just buying a newer car, and we can use these savings to help with that higher cost. Put simply, the cost of an EV is money you’ll be spending anyway, on something that isn’t going to be as kind to your pocket or your airways for having spent that money.
This won’t help you if you don’t have access to that upfront capital or can’t borrow, finance, or go in with someone else on the difference, but it’s still worth noting that your budget with an EV is still likely to be much higher than you might think than as with the comparative internal combustion engine vehicle (ICE) you’re used to.
If you are one of those people for whom it’s not a question of access, but a question of value, then the value of purchasing an EV is evident in the following comparisons.
The most popular petrol car in NZ is the Toyota Corolla, so let’s do some like-to-like comparisons to the Nissan Leaf. It’s even about the same price, the cheapest 2013 Toyota Corolla Hatch I could find on TradeMe is $8900, and $9000 is a fair price for an entry-level Leaf.
First up is the fuel economy, and when we look at this, we look at the average distance driven in a year, which is 14,000 km in New Zealand.
At 7.3 litres per 100 km, and assuming $3 per litre, that’s $3,066 per year of driving.
The Nissan leaf in comparison is rated by Rightcar as $360, per year. I say rated at, because obviously, the price you pay per kWh changes depending on where you are in the country and if you have solar. To break this down a bit more, this is based on electricity costing you $0.15 per kW (an overnight charging rate), and getting about 5.83 km per kW used.
If you want to do the math yourself, take your approximate yearly travel in kilometers, divide it by 5.83 which will give you the annual kW used. Then multiply this by your own price per kW (found on your electricity bill). You can also check Powerswitch to see other good power rates in your area. Some places even offer discounts for EV owners. Most EV owners charge during off-peak times — and almost every EV will come with a charge timer, so you can set the car to start charging when those off-peak rates kick in.
Running costs are more than just fuel
Another aspect worthwhile considering and oft-forgotten when it comes to EVs is maintenance. There are only around 20 moving parts in an electric engine, compared with nearly 2,000 in an internal combustion engine (ICE).
EV owners, according to Consumer Reports, spend half as much on repairs and maintenance.
The cost of maintenance between these two types of vehicles can be calculated as a cost per kilometer driven (see table above). Not only will this difference save you additional money, but it will also reduce your vehicle’s downtime and improve its reliability. Many of us who’ve run older vehicles know how much it can ruin your careful budgeting when your car unexpectedly breaks down.
So let’s bring it all together and look at these two vehicles side by side.
After just 5 years of average use, an EV is effectively free when compared to a similar vehicle or similar running costs. If you travel more, or you have an older vehicle with worse fuel economy, the pay-off is even sooner.
But hang on a sec (I hear a million people typing furiously on their keyboard) WHAT ABOUT THE BATTERY? You know, the one that will blow up if you go through a car wash or fizzle in the rain, or perish after only (insert dismal prognosis number here) years and has to go to landfill? (These are all things that have been said to me.)
How long does a battery last?
A Nissan Leaf battery has been benchmarked to lose, on average, 3% per year. This benchmarking was recorded by FliptheFleet in New Zealand across hundreds of NZ Leafs. It matches Nissan’s own internal projections and is consistent with similar reporting in UK and Canada. This is fairly straightforward math to do: a Leaf has 100% battery health (known as State Of Health, or SOH) when new and after 10 years, will be at about 70% on average.
If you buy a 70% car, then after 5 years, you will have SOH of 55%. This degradation changes depending on how you use the car, for example driving double the average annual distance saw my first Nissan leaf lose 5% per year — but in that time, I made many Christchurch to Invercargill long-distance journeys that normally would have cost me $200 in fuel but now only cost me $60.
Because this technology is new, it’s true that we don’t yet know if the degradation will stay the same past 50%. Will it maintain that all the way down to 10%? Will it get worse? Will it level out? We’re still learning these things. Again, I expect it will be down to how you use your car. That’s why these scenarios exclusively focus on the upper half of the battery,
100% to 50% SOH.
Battery health roughly translates to energy stored within the battery, and to the range you can travel. This chart shows how a 24KW Nissan Leaf with a 91% SOH battery will use 55% of its energy to get to Ashburton from Christchurch compared to using 62% of the battery when it’s at 78% SOH.
When an electric vehicle’s battery no longer delivers the range that you need for your driving requirements, you can either sell it to someone for whom that range does meet their needs and buy an EV with more range, or you can upgrade the battery.
When talking about replacing an EV battery, there is basically refurbished, or new. There have been many scary price tags put on EV batteries, in part due to Nissan New Zealand giving people “fuck off” pricing of $100,000 for a replacement battery. This isn’t representative of the cost of a battery, it just illustrates Nissan’s disinterest in supporting parallel imported vehicles. In the UK, as of 2014 Nissan was selling replacement batteries for £3,920, or $7500. Now before you react strongly to that, keep in mind we’re talking about a vehicle that gives you that in fuel savings every 2.5 years.
So that’s First-Party new batteries. Nissan can do them, but not in NZ (yet). Next on the option list is refurbished batteries. Many places here are doing battery replacements, this is basically buying your old battery (yes old batteries are worth money) and selling you a genuine Nissan Leaf battery from another vehicle that has been wrecked. Prices vary depending on the condition of your trade-in, and the size you want to replace it with (yes, you can upgrade to a larger battery than what came with your car).
EVs Enhanced are at the forefront of battery upgrade technology in New Zealand, and pricing on their website gives us a rough indicator that for the example we showed above (55% SOH 24KW), we could get a 75% SOH battery for $5,200 NZD. This translates to a cost of 1.7 years of fuel savings for an extra 6.6 years of driving around before it gets back down to 55%.
Finally, the last option when it comes to battery replacements are Third-Party batteries. This would be a brand new battery, produced by someone other than Nissan. EV Enhanced is working on this option as well, as are several others in New Zealand and further abroad. The ballpark figure tossed around for this could be about $20,000, but that’s for a 40kw battery. In the context of earlier comparison, that’s 6.7 years of fuel savings, for a 203% increase of battery capacity, and compares quite well with the $50,000 cost of a new 40kW Nissan Leaf. This is also impacted by the value of your trade-in battery.
The final showdown
Putting it all together, let’s assume you pay $9000 for a Nissan Leaf that can do 100km per charge, it’s a 24KW 2013 car at 70% SOH. You’re going to drive that car, 14,000km every year, until it can no longer do your 60km return trip to work, and then you’re going to replace the battery. We’re going to compare all of that, with buying a 2010 Toyota Corolla for $7000, and paying $2.50 in petrol (surely it’s gonna come down at some point?).
Assuming that you’re using about 6 kw per km, you’d be right on your 60km of range at 50% SOH, which is going to be about 6.6 years after you purchased the car.
There’s not really a good way to do a grand reveal in an article, but as you see above, even including the cost of replacing the battery, it’s cheaper to go with the EV than it is to go with the petrol vehicle. But wait, there’s more. Batteries are getting cheaper all the time and we’re writing this story about a situation that you may face in six years time, using figures from today. In six years time, batteries could well be double the capacity for the same price. That’s certainly the trend we’ve seen in the past decade, as a 24 kW new Nissan Leaf has gone from $69,000 in 2014 to $69,000* now for a 62 kW leaf.
(*$61,400 after rebate)
Now vs later, Money vs Compromise
So throughout this article, I’ve focused on a very narrow segment, the person that doesn’t drive very far and doesn’t need a long-range EV. There are many options available for people outside of this, but they require either more money or some level of compromise.
For example, if you have a 120 km return commute for work, you will need either a 30 kw Nissan Leaf, or a workplace with an EV charger, or to stop for 5 min on your way home to fast charge.
If you need to travel 250 km without stopping, because you have a bladder the size of a bucket and don’t like to eat for 3 hours, you may need to look at a more expensive vehicle like a Tesla Model 3 for $62,000*, or an MG for $41,400*. (* Includes Clean Car Rebate)
Or if you don’t need to do those trips all the time, you could allow for stopping every 100km to charge for 15min, in a smaller cheaper vehicle, or you could keep your petrol car for those odd journeys and just rack up the fuel savings normally, or you could trade cars with a friend or family member, when you need to make that long trip.
Regardless of your circumstances, when you look at buying an EV, you should buy a vehicle that can do your daily trip easily with range to spare. Battery SOH is more important than the odometer, and make sure you buy a vehicle that will suit your foreseeable needs. Don’t be afraid if it doesn’t suit all those needs. Figure out if you can ‘jump the gap’ through charging along the journey or using another car.
There are so many reasons to own an EV, we’ve just focused on the cost factor, but there are also climate, health, and peace of mind benefits as well. EVs can work now for so many people, so it’s worth actually looking at whether one is right for your lifestyle.