Are we really ready for the EV transition?

“Range anxiety” is a term that analysts have written about for years but few have experienced. Unexpectedly, I had the chance to experience it firsthand.

At the risk of being a poor substitute for Richard Hammond from Top Gear, I thought my first comical Electric Vehicle (EV) driving experience may be worth sharing because it left me questioning how ready we all are for the EV transition.

Full EVs have always seemed a futuristic concept, but the reality is they are here and are commanding a notable slice of new car sales in Australia (6.8% of new car sales in April 2023).

So what happened? 

An enthusiastic rental car agent presented me with the keys to a brand-new EV - the BYD Atto 3 (Atto 3).

BYD (HK: 1211) is the largest electric car brand in the world, selling approximately 1.8 million vehicles in 2022 predominantly in China, second only to the Volkswagen Group (ETR: VOW3) which sells both electric and internal combustion vehicles. Last month, BYD became the #1 brand in China. The Atto 3 was recently introduced to Australia through a JV with listed Australian car dealer – Eagers Automotive (ASX: APE). The EV has quickly become Australia’s second bestselling electric car behind Tesla (NASDAQ: TSLA).

The reason for the rental car? I was in New Zealand (NZ). A tourist on a site tour. I had booked a regular SUV to drive 100km south. When an EV was offered in its place, I was curious to see what they were like.

I was assured range is not an issue, and the likelihood of needing to recharge it was low.

At the time, I gave little consideration to the fact:

1. I’d never driven an electric car;
2. I’d never charged an electric car;
3. I was a tourist in a foreign country (albeit it’s pretty similar to Australia); and
4. The weather.

The Atto 3 was brand new and when I stepped in and turned it on, it said 417km to empty. Win.

Think of an Atto 3 as like a jacked-up VW Golf, with all the mod cons, Spotify, a moon roof, an operating system that renders Apple Car play redundant, speakers that disguise door handles and wireless charging.

Rental car fleets are embracing EVs as well as corporate Australia with leasing companies like Smartgroup (ASX: SIQ) noting the strong demand at their AGM earlier this month. The Australian Federal Government’s Electric Car Discount policy introduced late last year, provides substantial savings to novated leasing customers who purchase an EV. Smartgroup noted EVs as a percentage of total quotes is nearing 25%, a significant step up from the quarter prior.  

I counted eight EVs alongside my Atto 3 in the car park and no ICE (Internal Combustion Engine) SUVs in sight.

NZ policymakers are on a mission to grow EV penetration. The latest Emissions Reduction Plan sets NZ's commitment to increase zero-emission vehicles to 30% of the light vehicle fleet by 2035.

An impressive but potentially ambitious target.

NZ has one of the oldest car fleets in the world. Turners Automotive (ASX: TRA) estimates 20% of the NZ vehicle fleet is 20 years old or more. Turners also estimate that approximately 80% of New Zealanders will not spend more than $20,000 NZD on a car.

With the new Atto 3 selling for around $50k AUD, there is hope that models at the end of the decade will be more affordable or used Atto 3’s may well be in that price point.

Despite this, the NZ government is pushing ahead with charging infrastructure. In August 2022, Genesis Energy (ASX: GNE) noted there were 340 public chargers, up from just 20 at the end of 2016.

As I headed south on the motorway, my 400km range appeared to be declining significantly faster than the time it was taking to complete the kilometres.

Astute EV owners would know that if their phone is recharging, something else is going flat.

After driving around 100km south, I consumed more than 160km of range. On reflection, Auckland did have approximately 100mm of rain on the day and the demister was required plus some heavy windscreen use.

As I parked at stop number two on my way back north, I only had 151km of range left. The battery was on 32% charge. I’d used up an extra 100km of range, somehow. I checked my driving style – “Standard” apparently. “Range anxiety” began to emerge.

Fortunately, I found a supercharger not far from where I parked. I was always taught water and electricity don’t mix, but to be fair it was no different to a bowser.

However, you needed to download an app to use it, which was only available on the NZ App Store.

20 minutes later I was in search of another charger, one that may not require an app. 20km further north and with the Atto 3 battery now at 21%, I was in luck - no app required.

I casually asked the couple leaving how long it takes to recharge with a hypercharger. They indicated about 30-35 minutes. Not quite the time I was expecting or planned for. About 20 minutes later, I abandoned the charge.

I got a 25% increase in battery life for a cost of $15.10 NZD (17.77kwh). So call it $60 NZD for a full charge, and it probably would have been a good hour.

I was surprised at the cost of the charge. Clearly, the charging infrastructure company needs to earn a return, but it would be interesting to see what margin they are making on the electricity.

NZ has invested in significant energy infrastructure and has a genuine renewable electricity industry. Gentailers like Meridian Energy  ASX: MEZ) and Mercury Energy (ASX: MCY), are relying on the energy transition to underpin future electricity demand. Recent statistics from the NZ government noted renewables accounted for 40.8% of energy supply in the 2021 calendar year. Even with such captive supply, it seemed expensive.

It’s terrific to see a country like NZ embracing the move to EVs. Tourists or first-time EV drivers might just need a handbook.

If your EV is running low on battery and you are running late for a meeting take an Uber, it will be quicker.

And a word to the wise, for those embarking on a longish journey in an EV for the first time, don’t wait for the ‘charge’ light to come on.