NZ businesses make moves to future-proof their fleets

17 April 2018

New Zealand businesses make moves to future-proof their fleets with electric vehicles, but the change doesn’t come without challenges

With a global commitment towards minimising carbon emissions, New Zealand businesses are increasingly embracing more sustainable transport options to get their employees from A to B.

Driveline, one of New Zealand’s leading specialist vehicle leasing and finance companies, says businesses are safeguarding their future by adding a small number of electric vehicles (EVs) to their fleets – preparing for a time when EVs could be the norm. The latest figures from Driveline show a growth of 286 percent in the first quarter of this year, compared to the first quarter of 2017.

“We’re seeing genuine interest from small to medium New Zealand companies keen to embrace electric vehicles. They recognise the benefits EVs bring beyond reducing their carbon footprint and the associated marketing benefits,” says Driveline CEO Lance Manins.

Other advantages for companies switching to EVs are the elimination of fuel costs as well as health and environmental benefits. Maintenance outgoings are reduced too - there are only 20 moving parts, on average, in an EV, compared to around 2000 in an internal combustion engine and with regenerative braking systems, brake pads on EVs require little or no replacing.

The volume of enquiries for EVs at Driveline this quarter has already exceeded the number for the 12-month period to 31 December 2017. Manins expects this trend to continue as companies research the pros and cons of EV ownership, but he doesn’t expect a blanket uptake of EVs in Kiwi businesses without challenges.

“The reality is we’d need to see major changes from vehicle manufacturers to make the cost more attractive if we are to have more EVs on our roads. The purchase price of an electric vehicle is at a significant premium when compared to internal combustion engines, so it requires a lot of savings to be made on the EV to make economic sense,” says Manins. For example, a 2018 Hyundai Ioniv EV retails at $59,990, whereas a 2018 Hyundai Elantra has a price tag of $35,990 and a new petrol vehicle now retails for around the same price as a second-hand Nissan LEAF.

Then there are issues around the capacity to charge EVs. While there’s an increasing network of charging stations around the country – some solar-powered – recent power outages in Auckland highlighted potential problems around infrastructure inability to recharge these vehicles.

The Government plans to introduce a Zero Carbon Bill later in the year and has a national target for 64,000 electric vehicles in New Zealand by 2021. This could be a step towards following suit of countries such as China, Britain, Germany, The Netherlands and France, all of which have committed to a future ban on the sale of vehicles with internal combustion engines.

“Until we see the mass production of electric vehicles internationally which would lead directly to a significant pricing shift, then I think the current targets for EV sales will be a struggle to achieve,” says Manins. “Of course, an increase in the price of fuel could bolster EV sales, but the long-term outlook doesn’t foresee major fuel price hikes.”

In 2016, 30 of New Zealand’s leading corporates committed to filling at least 30 percent of their fleets with EVs by 2019. While Manins says this signals a positive direction he thinks this shift would take longer to filter down to smaller and privately-owned companies.

“For SMEs to feasibly add EVs to their fleets they may have to look at second-hand vehicles released into the market at around three years or 75,000km after the corporate’s replacement policy expires.”

However, drivers have far more choice than they did a few years ago when it comes to choosing a suitable EV; Toyota has made a commitment to make every model in its Toyota and Lexus range available in an EV version by 2025, and Audi, BMW, Renault and Hyundai and LDV have moved into the electric vehicle space too. This is an evolution from what was once only a choice of Tesla, the Nissan LEAF or VW eGolf.

In addition to rapid charging stations around the country, Manins predicts more companies will add Worksafe-compliant intelligent EV charging infrastructure to the workplace. This will enable staff to charge up during the day, helping to solve the problem around charging logistics on vehicles that typically need a recharge at around 200km.

“It’s great to see growing interest from New Zealand companies that are keen to introduce EVs to their fleet and do their bit to take small steps towards a more sustainable future,” adds Manins.

ENDS

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