Used EVs cheaper over long-term than new petrol cars – study

Used electric vehicles would be cheaper to run over the long term than even new petrol-powered cars, a new Kiwi-led study suggests.

The new research comes as the Government has just been told that, to meet its climate change commitments, at least half of all car imports need to be either battery EVs or plug-in hybrids within six years.

Most New Zealand cities are highly dependent on cars and our light-vehicle fleet – 98 per cent of it fossil-fuelled – remains one of the oldest among developed nations.

These mostly contributed to an increase in road transport emissions by more than 100 per cent over the past two decades.

“In these circumstances, electric cars are undeniably important on the path to achieving the Government’s net zero CO2 emissions target by 2050, given that over 80 per cent of New Zealand’s electricity comes from renewable sources,” said the new study’s lead author, Dr Arif Hasan.

But uptake had so far been middling. As at last month, a measly 24,092 full EVs were registered here.

That was despite previous Government measures like transport being rolled into the Emissions Trading Scheme a decade ago, and the introduction of electric vehicle programme in 2016.

Hasan said the poor demand, compared with petrol cars, could be explained by the high upfront cost of EVs, and the lack of clear information on the ownership cost of using a new or used one.

“Although a large number of people use old used cars and the initial purchase price of a new and a used car varies significantly, no study has been conducted so far to calculate the ownership costs and emissions for old used cars.”

That prompted he and fellow researchers to crunch the numbers on ownership costs and life-cycle emissions – by costs per km and grams of CO2/km respectively – of EVs and conventional cars with internal combustion engines.

Their calculations also factored in vehicle purchase price, vehicle depreciation cost, fuel cost, repair and maintenance costs, and resale values.

They chose a 12-year ownership period because most previous international studies had done the same.

The analysis, published in the journal Transportation Research, indicated that used EVs offered financial gains over new ones, as well as new and used petrol cars.

“Over a 12-year ownership period, the cost of using a used electric car is only 24.3c/km while it is 29.1c/km for a used petrol-powered car, 38.8c/km for a new petrol-powered car and 45.6c/km for new electric car.”

A discount scheme – like that once proposed but axed during the Government’s last term – could slash ownership costs by 2c/km for a used EV, and 6c/km for a new one.

“The findings indicate that households including lower-income households would be advantaged by switching to a used electric car.”

In terms of life-cycle emissions, he found a new EV emitted the lowest levels – 137.1 gCO2/km – followed by a used EVs, at 139.7 gCO2/km.

A new petrol-powered car, meanwhile, emitted 272.3 gCO2/km, and a used petrol-powered car emitted 289.4 gCO2/km.

“This indicates that replacing a petrol-powered car by an electric car could reduce emissions between 49 per cent and 53 per cent across the lifetime,” he said.

“However, an electric car could reduce emissions between 87 per cent and 90 per cent when excluding manufacturing and recycling emissions, and between 81 per cent and 78 per cent when excluding only manufacturing emissions.”

Ultimately, he said the findings indicated that used EVs offered the highest financial gains – and could slash related emissions by at least 78 per cent, given that New Zealand did manufacture cars.

Otago University’s Emeritus Professor Henrik Moller, who helped launch a citizen science project dubbed “Flip the Fleet” involving hundreds of EV owners, felt the study was a “good start” at understanding the full picture – but he was concerned it included some potential biases and unknowns.

That included uncertainy around the cost of a replacement EV traction battery in New Zealand – current estimates were around $15,000 – and the number of times it would need to be switched out over an ownership period.

Hasan however pointed to estimates suggesting the average EV battery pack’s lifespan to be around 320,000km – amounting to nearly 27 years of use if driven 12,000km per year.

Meanwhile, the Climate Change Commission’s just-issued advice recommended the Government introduce a package of measures to ensure there were enough EVs entering the country – and slash their upfront cost until they were cost competitive with their petrol-powered equivalents.

Last week, the Government committed to passing a clean car import standard this year, which would see a 105 grams CO2/km target phased in through annual targets that grew progressively lower, to give importers time to adjust.

“The Import Standard will prevent up to 3 million tonnes of emissions by 2040, mean more climate-friendly cars are available, and will give families average lifetime fuel savings of nearly $7,000 per vehicle,” Transport Minister Michael Wood said.

The commission said the Government should place a time limit – as early as 2030 but no later than 2035 – on light vehicles with internal combustion engines entering, being manufactured, or assembled here.

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