New car buyers are rapidly driving up the sales of new EVs but for secondhand buyers the choice is limited. The used EV market is yet to benefit from a strong flow of surplus vehicles from company and Government fleets. But, as Mark Jennings writes, the tap will be progressively turned on | Content Partnership
For years, ex-rentals and company cars - previously driven by sales reps and executives - have been a staple of used car yards. Buyers can reasonably rely on the cars’ service history and, being between two and four years old, most have the latest safety features.
The lack of a fluid secondhand market for EVs is currently a handbrake on the country’s attempts to speed up the move to low emission cars.
Hyundai NZ’s head of fleet sales, Kameel Somani, predicts the flow of used electric vehicles will pick up in the next 12 months as companies and organisations that have had government support to buy or lease EVs begin to renew their fleets.
“A lot of the EECA funding had caveats where fleets had to turn their vehicles over quicker than their normal replacement cycle to help accelerate the uptake of low emission vehicles in the used car market, so it is not far away.
“If I look at the increase we had in terms of EV sales in 2018-19, when the Kona [small SUV] became a viable option for fleets due to its range, I think we will see a lot of those vehicles come onto the used market next year.”
Companies that were “early adopters” of EVs have had to blaze a trail with charging infrastructure and driver education but, just like the private car market, EV fleet sales are starting to rocket.
“The demand is huge. Every meeting you go to with companies they always want to know what is happening around EVs. Our forecast was for fleet sales of EVs and Hybrids to be about 70 percent of the total this year, but we are well on our way to smashing that forecast,” says Somani.
Some companies are already well down the EV road. The Warehouse began converting its fleet to EVs three years ago.
“Currently 90 percent of our passenger fleet are EVs and we are phasing out ICE vehicles (internal combustion engine)," says David Benattar, Chief Sustainability Officer.
“As part of our commitment to making sustainability more accessible and convenient for customers, we’ve increased public access to electric vehicle rapid charging with the expansion and upgrade of our charging station infrastructure.
“We now offer free EV charging at 28 The Warehouse stores nationwide. By 2030 every The Warehouse store which can house a charging station will have one,” he says.
Benattar admits cost and convenience were issues The Warehouse had to confront but the transition will be much easier for companies about to make the switch. Fleet buyers now also qualify for the Government’s clean car rebate.
“So far there hasn’t been a significant economic benefit, but we see that coming down the track with operating and maintenance costs decreasing, and as fuel costs rise.”
“We made a commitment to reduce our emissions and initially introduced 30 percent full EVs to our passenger fleet which were mainly Konas and IONIQs. There were several learnings at the beginning of our EV journey, including about range performance. Some of our team members, particularly those living in apartments couldn’t charge the EVs at home, so we’ve installed charging stations at the back of some of our stores.”
Hyundai’s Somani says the decision to buy a fleet of EVs is a lot different to buying petrol or diesel cars.
“The clean car discounts have made it more attractive than it was previously, but it is about being able to tell a stor. It is about zero emissions and being environmentally friendly - you want consumers to align with your vision or brand and feel you share their values.”
For some companies, “telling the story”, has included sign writing their EVs pointing out the obvious – that they are EVs. But the window for this type of messaging is closing quickly as more firms convert their fleets.
“The switch [to low emission vehicles] is going to happen one way or and other so companies won’t always be able to tell that story," he says.
Westpac has used its early move into EVs to promote its green credentials.
Head of Sustainability Belinda van Eyndhoven tells Newsroom banks have a crucial role in reducing emissions and impacts of climate change
“We’re helping our customers think about how to do this, and leading by example in a number of areas including by ‘going electric’. This has helped us reduce our overall carbon footprint by 35 percent from our 2019 baseline to the end of last September.
“We’ve publicly set ourselves the goal of transitioning our entire fleet to Battery Electric Vehicles and Plug-in Hybrids by 2025 and we’re on track to achieve that, with around half our vehicles now electric.”
Westpac has installed 55 battery charging stations throughout the country and van Eynhoven says companies need to plan for and communicate the changes they are making.
“For example, in our Hamilton office we needed to install a low voltage connection to a local transformer to accommodate the additional load on the building. This meant a brief power cut, which required us to notify dozens of residential and commercial customers in the area. Careful planning, coordination and communication is key.”
Hyundai’s Somani says today’s customers benefit from being able to bypass the roadblocks experienced by early adopters and be guided through the journey.
“After the excitement of getting a new vehicle, we focus on the education bit. Charge times, what’s AC, what’s DC, public charging, home charging, regenerative braking so we are very hands on during induction training to maximise the efficiency of the EVs.
“Drivers need to think about planning their journeys, where are the chargers on your trip? You get used to it, but it is the piece that can be under rated.”
The Warehouse’s Benattar says the retailer’s regional managers visit multiple stores daily and had to adapt their approach.
“Our operations team often visit three stores a day, so they’re having to think about charging the car while they’re having meetings or lunch. Once you start doing it, the charging routine becomes second nature.”
Since The Warehouse began acquiring EVs many of the company’s team members have also followed suit.
“If you look around our carparks, we’re seeing more EVs. I think it has been a real positive.”
He admits to being a cheerleader for electric cars.
“The user experience is amazing, and I think it is important to lead by example.”
The rapid and continuing advances in battery and EV technology might make buying a new EV attractive but will they also make buying a secondhand EV less attractive when the three or four-year-old cars come on the market? Fear of a failing battery will always sit in the back of a buyer’s mind, but Hyundai’s Somani says, so far, the signs are good.
“Battery degradation is a thing, but we are seeing 2017 models coming through our dealer networks and their batteries are still at 100 percent. It is pretty impressive that you have five-year-old cars still having full capacity, it is very pleasing to see.”
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