There's something good that can be extracted from 2020 - in the future, it will be known as the crummy year that refused to give up!
Except for one piece of goods news, for all of you out there interested in picking up a second hand electric car. The government is now committed to shifting the used EV market into a higher gear, by sticking a three year time limit on all government electric vehicles and hybrids.
- As determined as Kiwis' are to making the shift to electric cars, ownership turnover can be described as stagnant, at best. The EV market seems to be comprised of buyers making the change to electric vehicles by trading in their petrol powered cars and utes, and leaving the showroom floor driving a brand new electrically powered one.
- And then they keep it for a very long time. This means the flow of used electric vehicles onto the market can best be described as a trickle.
- The government is hoping to change this by requiring government agencies to optimise their car fleets every three to five years, in the hope this will bring more second hand EV's to the market.
- It’s no longer enough for a government agency to lead the way by operating electric or hybrid vehicles, setting a template for the public in this regard. Now they are required to replace their electric powered vehicles every 3 – 5 years as a way to lead by example. Not only will this provide more used and previously owned EV's to those buyers who can’t afford new ones, but also incentivise the public to replace their older models with new ones at a faster rate as well.
- In the long term electric vehicles makes sense both economically and environmentally. But they remain more expensive as opposed to new and used petrol and diesel cars. This is where the problem currently lays. It’s hard to force the consumer into buying a new and expensive car when there are so many other alternatives out there.
- So, for how long are prices set to remain high? And when can we expect EV's to become accessible to the average car buyer, new or second hand?
- It’s a bit of an electric car conundrum. The global demand for electric cars is huge, and many countries are trying to jump the queue in the rush to become the first EV-only country. This has placed a huge stress on the raw materials required to make electric vehicle batteries.
- In addition to the amped up production, there exists another perplexing layer. EV manufacturers have to adapt their processes to meet the production numbers, but there is a very real danger that if they do produce more electric cars, the market for them does not exist yet. This is because the units cost too much for the average buyer – but the price of EV's won’t come down until more units are bought - a typical catch 22 situation.
- It’s not enough for a government to insist on everyone buying a hybrid or electric car if the average household can’t afford it or the cars are not available. This is why the government leading the way in replacing used electric cars makes so much sense. It’s another way of the New Zealand government subsidising the second hand used electric car market.