How quickly can we really change to electric vehicles?

I rented an electric car (EV) in Christchurch a couple of weeks ago.  The attendant at the counter gave me a slip of paper with 89% written on it which, having innocently enquired, I was advised was the level of the battery charge in the car.  My pointing out that a traditional petrol-powered rental comes with a full tank was met with a smile and apology that “we didn’t have time to charge it sir.”  When I then asked about a charger to plug in at the hotel, I was instead given a pamphlet and sign-up details for an independent EV charging network company that boasted 280 stations throughout the country…I really only wanted to know where these stations are in Christchurch.  I couldn’t be bothered with that of course so I drove off, quite quickly with the double-motor option I might add, fingers crossed that my charge would last the couple of days I was in Christchurch, which it thankfully did.  I enjoyed driving the EV but not all these associated complications.

What this experience showed me is that the EV world is not yet as convenient and as familiar as the current world of combustion engine vehicles.  And that the transition to EVs which many Western Governments are currently busily promoting – for climate change reasons – might yet take some time and not be as easy as simply buying the new Tesla 3 Series.

Regardless of the present inconveniences of “EV-ification”, California for example looks to be ploughing full steam ahead:  California Governor Newsome recently announced a ban on the sale of all new petrol-powered vehicles from 2035, with a gradual ramp-up in target EV sales between now and then.  The intriguing questions this announcement pose include the following:  First, does California have enough electricity generation and transmission capacity?  Californians buy approximately two million new cars every year and just 16% of those were EVs in the past year.    Second, how and where will they be charged? And third, even if one and two are sorted out, what will they cost?  Because many difficulties will arise and the various targets won’t be met, if the EVs themselves are too expensive.  These questions relate directly to our likely EV-ification trajectory here in NZ.

The importance of electricity generation and transmission was highlighted the very same week California announced these bold sales targets.  The organization that manages California’s transmission grid issued something called “Flex Alerts” for eight successive days.  These alerts asked households to voluntarily reduce power use, including not to charge EVs between 4:00 and 9:00 pm.  And this is with just 6-7% of California’s total passenger vehicle fleet being some form of EV.  To build up to 100% EV sales and then 100% of the fleet, California will certainly need some extra juice if the targets are to be met on time.  Moreover, Princeton University reckons that, assuming the State can keep its current nuclear reactors and build the new primarily wind and solar powered generation that it needs for all these EVs as well as other consumption, the State will need to at least triple high voltage transmission capacity over the same period.  That’s a lot of overhead power cables and a lot of new sub-stations etc.

Then if the clean / green generation and transmission infrastructure is in place, what about the charging network?  According to the California Energy Commission, there are currently 79,000 out-of-home EV chargers across the State.  Its research shows that California will need, wait for it, 1.2 million by 2030 to meet the requirements of the, by then, larger EV fleet.  That’s a lot of extra power sockets in a short period of time.

And then if generation, transmission and charging infrastructure is in place, what if people extend the use of their petrol-powered cars for a lot longer because the new EV cost is too high?  For instance, Tesla has increased its USA prices across the board this year, by up to US$6,000 for some models, with the company citing “increases in raw material prices and logistic costs …”.  Lithium, Cobalt, Nickel and Manganese make up about 50% of an EV battery cell and the prices of these rare earth metals has sky-rocketed over the past couple of years (and not just because around 80% of the worlds’ battery cells are made in China).   Lithium Carbonate for example is currently trading at around five times the level it was for the past five years or so before the recent surge.  These things are not necessarily cheaper to manufacture just because there is no internal combustion engine.  A widespread and successful rollout of EVs no doubt depends on affordability, and at present EVs are more expensive than petrol-powered.  This is why California has a number of programs, ie subsidies in place to support the strategy.  These include “Clean Cars 4 All” which provides up to US$9,500 to low-income drivers who scrap their older vehicles and want to purchase something that plugs in to recharge, The Clean Vehicle Rebate Project which provides up to US$7,000 for lower-income drivers to buy or lease an EV and another variation “The Clean Vehicle Assistance Program”.  Here in New Zealand where plug-ins also cost a lot (I saw an Audi e-tron for around $300,000 advertised recently, admittedly a sporty version) we have a “Clean Car Discount” scheme with a subsidy of $8,625 for each new battery EV purchased (up to $80,000 purchase price) and further subsidies albeit less for used and hybrid EVs.

Electrification of the vehicle fleet and its supporting infrastructure is seen by policymakers and a great deal of the public as an important step to addressing climate change matters.  However, policymakers should really issue EV mandates (such as that in California) only after figuring out how to ensure costs are not a barrier and that there are no supply bottlenecks in both generation and transmission.  Uninterrupted electricity supply looks as if it will be a requirement of our not-too-distant future.  The federal US government has established a US$6 billion program to help “avoid premature retirements of nuclear reactors across the country” as it sees the importance of this always-on and low emission source of electricity.  Many private sector operators including Bill Gates are looking at ways to develop even more efficient nuclear energy production.  Watching what California is doing and the ramifications of EV-ification are insightful for us here.  In New Zealand we will likely pursue an EV-ification of the vehicle fleet over the next 10 or so years on our way to NetZero by 2050.  Likely mandates will in turn, as we see in California and beyond, require substantially more electricity to be generated and then transmitted to where the consumers are.  Remember we had brownouts here last winter – and we’re having to import coal to burn at Huntly just to meet our current electricity demand.   And we’ll need more charging stations too.  We currently have around 35,000 EVs in NZ out of a total vehicle fleet of more than 3.5 million.  You can do the math.