Electric vehicles cost more to own than ICE equivalents

[fatgas]

I originally read this on the Herald Scum site, but found a non-paywalled version:

A new Commonwealth Bank paper claims that electric cars could cost more to own over five years than their petrol equivalents.


Motoring editor Richard Blackburn explains why manufacturers like MG are the big winners from a new policy that penalizes the likes of Toyota.



In a paper called “New Vehicle Efficiency Standard: Race to the bottom?” Economist John Oh compared the MG ZS electric car with the petrol version of the same model and found that at today’s prices, the electric car would cost between 5 and 58 percent more to own over five years than the petrol version.


He said that while EV buyers would save money on fuel bills and lower maintenance bills, they would ultimately be burdened with higher ownership costs due to the weaker resale value of EVs.


But the equation would change if MG discounted their electric cars using the carbon credits they would earn under the government’s new efficiency standard.


Under the government’s controversial new plan, electric car makers will earn credits that can be sold to other manufacturers looking to offset emissions from their popular thirstier vehicles, such as the ter.


Oh estimated that MG could earn up to $6500 per car in credits from the proposed scheme, and if the company passed them on in the form of cheaper prices, the cost of ownership could be 2 per cent lower than a petrol car, based on a “best-case depreciation scenario”. where the electric car retained the same value as a petrol car If electric cars were depreciated at “historic rates”, the electric car would still cost 44 percent more.


“The clear winners of NVES are automakers that only sell battery electric vehicles. Electric car buyers can benefit if those manufacturers discount their electric cars with the revenue generated by selling credits,” he wrote.


“The lower upfront costs if credits are passed on to customers will help tip the dial towards EVs being more economical to own and run than ICE (internal combustion engine) vehicles,” he said.


But it was “unclear” whether EV brands would pass on their credit earnings in rebates. MG, who also sold petrol cars, can use their earnings to compensate for their thirstier cars.


Cheaper new EVs also created problems for used EV prices.


“Used electric cars will potentially have to compete with the price of new cars, which are getting cheaper, and there is an expectation that it will be lower,” he said.



Oh also had bad news for buyers of petrol and diesel cars, especially thirsty ter and SUVs.


He warned that carmakers who failed to meet the government’s tough new standards were “likely to pass on any penalties to consumers”.


He estimated that about three-quarters of the top 20 car brands would not meet the 2025 NVES standard.


Isuzu, which only sold ter and 4WD wagons, could face fines or have to buy credits worth between 6 and 17 percent of the asking price of its vehicles by 2029.


That figure assumed Isuzu would not improve its car emissions over the next five years.


“There are levers that the automakers can pull. They can change the volume, they can change the price, and they can also exit the market,” he said.



He said the outdoor market would pose the biggest short-term challenge to the success of the government’s plan because “EV uptake is low, low-emission vehicles command a large price premium and consumer demand for EVs is untested”.


In the United States, where Ford sold an electric version of the F150, the electric car accounted for only 3 percent of total sales.


The paper found that electric cars offered cheaper running costs because they required less maintenance and charging was cheaper than filling a car with petrol.


But these advantages were offset by the fact that they were written off faster and cost more to insure.


Depreciation figures are based on estimates made by the Australian Automotive Dealers Association.


But experts claim that more desirable electric cars, such as Tesla’s best-selling Model Y and Model 3, have achieved much stronger resale values ​​than the MG ZS used in the Commonwealth Bank modelling.

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