Too Busy For Words - the PaulWay Blog

Sun 12th Aug, 2012

The depressing news about electric cars

One of the members of the Canberra Electric Vehicles group recently asked "...what you think would be incentives that [the government could implement that] would work at increasing the number of electric vehicles on the roads?". The more I think about it, the more I fear the real answer is "nothing".

The absolute last thing they should do[1], in my opinion, is offer any form of rebate or cash back on buying an electric vehicle. We've seen this time and time again: offer a rebate on LPG fitting for cars and, mirabile dictu, suddenly the cost of fitting LPG to cars goes up by almost exactly the same amount. Offer a $4000 bonus for first home owners, and the entire housing market jumps up by $4000 (hurting just about everyone else even worse). In my opinion this is a classic tactic suggested by the industry in question when it wants to make it sound like it's working with the Government to do something to help, but make sure that it gets a lot more money in the process. It's not a bad policy for the Government, since it gets a cut of their business taxes anyway.

The second last thing is to make other 'cash back' or discount gestures to electric car buyers that aren't going to be permanent. The wailing and gnashing of teeth when the Government cut the Solar Panel Rebate was heard throughout the land - it bootstrapped the industry, yes, and that was a good thing, but when the rebate is dropped it then makes the Government look uncaring for the people it was only recently helping. If it's something I pay yearly, like registration, I don't want to find out that it's suddenly gone up because I was one of the first to do something that other people finally joined in on.

It's also trivial in comparison to the cost of the whole vehicle, especially when looked at in total. The Government putting $10,000 into paying all road-worthy electric vehicles' registrations doesn't, one has to admit, have much sound-bite potential. And when the vehicle is $50,000, a saving of $500 is but 1% - you save more than that in choosing to not get the luxury leather seats. And for people like me building a vehicle it's at the wrong end of the process - I've already committed over $12,000 to the bike now, I'm not going to hold off registering it because I can't afford the rego.

What's left? Really, as far as I can see, there are two major remaining options left to get more people to buy electric vehicles. One is to actually mandate their cost, so that they actually are cheaper. The other is to massively subsidise a new electric car industry in Australia to compete with the existing manufacturers - their price can be lower because their costs are subsidised by the Government.

Both of those, as far as I can see, aren't going to happen. The first would have every petrol car company screaming blue murder about price fixing and uncompetitive practices. And the second would ... yeah, have about the same effect. And take much longer. In the plus column, building a new industry producing cars that we know there will be a big demand for in the future is what Tesla did five years ago; with car manufacturing plants closing across the country, getting them going again with electric cars would be a big boost to employment and the manufacturing sector. But not even a Labor government is going to suggest that we do this; it's just too much like British Leyland[2].

Electric vehicles still suffer from an image problem, despite the in-roads that the Tesla Roadster has made. New cars like the Renault Fluence, the Holden Volt and the Holden Commodore conversions are looking more like standard cars, and have standard abilities such as towing a trailer. But these are still relatively expensive; fortunately, there's a way the price can come down. Meanwhile, with the Leaf and the iMiev looking like bubbles of plastic and the Twizy looking like the designer was from a magical land where it never rained and never got below 20°C or above 30°C, we've got a way to go yet before people can accept that electric cars are ordinary, working cars.

At the EV group meeting we had a speaker from Better Place. Unfortunately I missed his main presentation but the question and answer session was fairly lively[3]. One of the things Better Place is putting forward is switching batteries rather than recharging in the car. The Fluence and the Commodore conversion will support this; Better Place is obviously working with other manufacturers to get them to use the technology.

The two big questions with that are: is there going to be competition to Better Place, and is there going to be a standard for removable car batteries. Some kind of competition is good, so that Better Place don't get a monopoly on the technology and then limit access. And that competition needs a set of standards on how batteries are designed, manufactured and instrumented, so that we can rely on being able to plug in a battery and having it work and not lie about its charge state

My question to the Better Place representative, that followed on from those two principles, was: hobbyists want to get in on this technology too. We know it's easier for you to deal with major manufacturers, but if you lock out the very people that have been leading the way, you'll alienate a group of enthusiastic potential customers. This happens all the time, so it's not going to stop us building electric vehicles, but it's disheartening when you can see the prize in front of you but you're barred from taking it.

The strategy that Better Place is taking is that the car is cheap but you pay to change the batteries over. This has the feel of the "razor and blade" problem, but it is a reasonable way to lower the price of the vehicle. But even when we lower the price down to comparable to a current petrol car, EVs are still going to have lower range for the next five or so years while lithium battery technology ramps up. In that time, there's really not much the Government can do to get more people to buy electric vehicles.

Actually, there is one: use them themselves. If the Government were to start converting their fleets to electric, there'd be numerous benefits. The cost per car would come down, as manufacturers could commit to larger production numbers and shipments. More people would find out about electric cars, find that they're pretty decent vehicles, found some of their myths dispelled, and got used to their foibles (e.g. the quiet). The Government can show that it's reducing its carbon footprint and pay less in carbon tax and fuel. And in three to four years' time we'd see a further flow-on effect as the leased fleet got sold into the general used vehicle pool.

Overall, it sounds like a win to me. Let's hope that writing to my local Federal member has some effect.

[1]: of course, there's even worse that they can do. They can do nothing. They can charge more for registering electric vehicles since they don't pay fuel tax. They can offer massive subsidies to the fuel industry to keep it going. I'm positing that the Government actually wants to promote electric vehicles, for example as part of its carbon reduction strategy

[2]: it's a bizarre world when it makes sense for the Government to do something because the commercial operators are too inherently conservative and resistant to change to actually try to keep their industry alive and move with the times.

[3]: as you'd expect from a bunch of people who have been saying "come on, everybody, electric cars are the future, let's move now, let's not get trapped into depending on oil!" for the last twenty years.

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