What NZ can learn from Europe when it comes to using tax to incentivise greater electric vehicle uptake

By Lisa Marriott*

This piece was first published on The Spinoff.

From tax incentives to cash grants, ‘price signals’ are the key to increasing the uptake of electric vehicles in New Zealand, writes Victoria University’s Lisa Marriott.

On Friday 13 July, Climate Change Minister James Shaw stated that in order for New Zealand to meet its zero carbon pledge nearly all the country’s cars will have to be zero emission by 2050. Aiming for a zero or low-emission fleet is a worthy objective (under European Union legislation, low-emission vehicles have tailpipe emissions below 50g CO2/km). However, it is not at all clear what, if any, policy tools will be adopted to achieve this objective.  

New Zealand has an unusual emissions profile. Gross greenhouse gas emissions have increased 19.6% since 1990. The agriculture and energy sectors contribute nearly 90% of the emissions. The difficulties with reducing agricultural emissions are well established. The same cannot be said of the energy sector and in particular of road transport, which contributes around 46% of the energy sector emissions.  

At the end of 2017, the average emissions of light vehicles registered in New Zealand was 179.3g CO2/km. Compare this with the average emissions level of a new car sold in 2017 in the European Union of 118.5g CO2/km. It’s a big difference.

Things are slowly changing. At the end of June 2018, New Zealand had 8,696 plug-in electric vehicles (EVs) – or 0.2% of the country’s vehicle fleet. So how can we change the other 99.8% of vehicles? For once, there are many other countries we can look to for guidance. Not only that, there are multiple policy options.

First – let’s look at the tax system. We know that price signals influence purchasing behaviour. This is one way Norway has achieved its place as the world leader in EV adoption.

Globally, Norway has the highest uptake per capita of EVs. Over half of new car registrations in Norway in 2017 were electric or hybrid cars. This has happened because Norway has adopted a multi-pronged approach to encourage purchases of EVs. For example, EVs are exempt from purchase taxes and the 25% value-added-tax (our GST equivalent). EVs also benefit from free parking in public car parks, are exempt from tolls and domestic ferry fees, and are also exempt from the annual motor vehicle tax (the equivalent of our registration).

There are many other ways to provide a price signal:

  • Providing businesses with accelerated depreciation when they purchase low-emission company vehicles. Belgium provides for depreciation deductions of 120% for zero-emission vehicles. Conversely, limiting full depreciation deductions for purchases of high-emission vehicles.
  • Adoption of a bonus-malus scheme (i.e. carrot and stick). France provides a bonus of up to $10,000 for purchases of very low-emission vehicles (below 20g CO2/km), which tapers off to around $4,000 when the vehicle emissions are around 110g CO2/km. After this point, the malus component starts, which can equate to up to $16,000 in additional taxes for vehicles emitting over 200g CO2/km.
  • Different registration bands for vehicles based on their emissions. This approach is visible in Ireland and results in an initial registration charge between 14% (for a vehicle with emissions between 0 and 80g CO2/km) to 36% (for a vehicle with emissions over 225g CO2/km).
  • Implementation of grants, such as the Plug-In Grant Scheme in the United Kingdom. Seven categories of vehicles are currently eligible for the grant. These vehicles all have CO2 emissions of less than 50g/km and can travel at least 112km without any CO2 emissions. The grant pays for 35% of the purchase price of the vehicles, up to a maximum of $9,000.

There are good reasons for encouraging EV adoption in New Zealand. A key one is that, like Norway, New Zealand has high electricity generation from renewable sources, making adoption of EVs particularly attractive for reducing emissions.

There are, of course, financial implications to using the tax system to influence behaviour. And the tax benefits will go to those who can afford to buy new vehicles. Notwithstanding these factors, major change is necessary if we want to change vehicle purchasing patterns.  

New Zealand does have initiatives, such as the Low Emission Vehicles Contestable Fund, which exists to encourage innovation and investment to speed up adoption of EVs and low-emission vehicles. However, the $7 million co-contribution to industry is unlikely to result in a noticeable difference in consumer vehicle purchasing patterns. Most initiatives funded to date are very small scale (e.g. co-funding acquisitions of EVs with private and public sector entities or co-funding installation of fast chargers) and will not impact on vehicle prices.

The Emissions Trading Scheme is the principal mechanism adopted to reduce road emissions, but the price signal this generates is typically accepted to be too low to make any noticeable difference in vehicle purchasing behaviour.  

If we are genuinely committed to meeting our carbon targets, words need to be supported by action. Weak policy tools will not achieve strong behavioural change. The road transport sector is one where global experience shows that significant beneficial results are achievable when the tax system is used to influence the price of vehicles. What are we waiting for?

*Lisa Marriott is Professor of Taxation in the School of Accounting and Commercial Law at Victoria University of Wellington.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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107 Comments

I think if petrol prices stay high, then high EV uptake can be achieved through this price signal alone. No need for any other incentives or kickbacks in NZ.

Why would anyone buy an EV when petrol is better in every way? I'm sure some people can afford to be posers but for the average person and especially the below average people in their expensive hi-Ace vans, they are never going to buy them unless petrol cars are banned.
We already tax the crap out of petrol, while bleeding heart liberals cry about the poor, but I guess that is just more posing.

"Why would anyone buy an EV when petrol is better in every way?" - if in doubt, just make a sweeping BS statement like that one.

So are petrol engines better at:
Efficiency - 30% vs 90% = nope
Air pollution - always polluting vs none = nope
Maintenance - every year, several times a year vs none = nope
Performance - unresponsive, slower = nope
Comfort - a racket vs perfect silence = nope
Refueling - where Big Oil will screw you vs anywhere you like
Dependence on Middle East and exposure to oil wars = nope

All true, and personally I would like an electric car, but at this point in time - can they drive over 500km on a single 3 minute fill? and can I pick up a second hand one for <$4k?

Electric cars have many advantages over ICE - buts lets not hail them as environmental saviors just yet.

While we may reduce dependence on Middle east oil, we significantly increase dependence on Chinese REE.

We also swap air pollution from the ICE, to full blow environmental degradation from the creation and/or disposal of all the worthless batteries.

Yes, if the average New Zealander car commuter were numerate, they might see the financial benefit of switching to an EV.

The only reason a petrol car is better at the moment is cost. Once battery costs halve, and with some incremental improvements in battery technology EVs will be better in every way for anybody that lives somewhere with reliable electrical supply.

How are we going to have a reliable electricity supply without coal and/or gas?

Renewables are all inherently volatiles and there's no economic way to solve the dry year risk without coal and/or gas.

You do realise that we are already at 80% renewable energy and getting higher all the time?

We are mostly hydro with a chunk of geothermal chucked in.

With more solar to reduce the draw on our hydro plants we will be just fine.

No, we are at 80% renewable electricity generation in a good year. We are at about 30% renewable energy. We would need a LOT of solar to replace all the oil and gas, and we'd need to be able to store it and call on it on demand.

We're not 'getting higher all the time'. We used to have a higher proportion than we do now if you go back a couple of decades.

And allot of the new renewable generation is geothermal, which still emits greenhouse gasses.

We are a nation thats goes long distance in our cars and love our towbars.
For the moment an 800km range is a advantage for the ICE and that includes the Hunderlees.
But the electric motor will win in the end

We are also a nation of multiple vehicles per household.

"What are we waiting for?"

A small and most likely full-of-omission list:

  • Electrification of main-trunk railway lines (to enable long-haul within the country to transition to this mode where appropriate).
  • Emergence of viable long-haul electric trucks (e.g. most FMCG is supplied by diesel A- and B-train vehicle configurations, and there ain't no rail to hotspots like Queenstown/Wanaka)
  • Standardisation of battery packs and battery-vehicle comms so that pin-outs are universal, battery-to-vehicle lock-ins can be avoided, and hot-swappable batteries made feasible (e.g. Nissan Leaf will only work on its own ID'ed battery, so no hot-swap possible)
  • High-power universal charging stations so that urban etc. vehicles can be recharged in 10-15 mins max and stations dotted along long-haul routes (e.g. over Takaka Hill or Arthurs/Lewis passes). No more proprietary plugs e.g. Tesla...

Unlike petrol or diesel, electricity currently (sorry) exists in low energy-density forms, so getting the infrastructure there in advance of the population is vital. Bit like post WW2 urban planning, really, and what a success That has been.....

EV's are going through a Cambrian Explosion phase, and the forms have proliferated to the point where trying to pick the winning few configurations is impossible. So 'waiting' and then running with the market leaders, plus some standardisation, may realistically all that can be hoped for.

Otherwise, we would risk picking the EV equivalent of Betamax over VHS.....or the War of the Currents...

Absolutely agree with your list but 3 & 4 are not realistic.

Battery swap is not necessary with charging times heading closer to <20mins and only needing to Fast Charge once a week. They key change from old is that EVs start the day with a 100% "full tank" from at-home charging, making battery swap a fanciful & unnecessary notion.

DC Fast Charging stations (DCFC) are already widespread across NZ thanks to ChargeNet and several utilities. Go to PlugShare to see more. The next step in the infrastructure evolution is depth of DCFC stations i.e. not having to wait 20 mins if someone else is already charging. This will occur over time just like it did with petrol stations.

You will never convince the likes of Tesla to change their plug as they have the world's largest DCFC infrastructure (10,000 chargers worldwide) with 250,000 customers and in fact offered it to other car manufacturers to use, but they declined. It's all about competitive advantage and right now that sits with Tesla. You can also buy adaptors.

You will never convince the likes of Tesla to change their plug as they have the world's largest DCFC infrastructure (10,000 chargers worldwide) with 250,000 customers and in fact offered it to other car manufacturers to use, but they declined. It's all about competitive advantage and right now that sits with Tesla. You can also buy adaptors.

What ya talking about Willis? Tesla outside of the US and Japan uses the common European connector (CCS?) compatible connectors, and in China they have whatever it is the Chinese govt has mandated. Tesla will fit whatever plug the govt tells them to if its the only way they can get their cars sold there. Its a non issue once one standard is settled on.

But they still don't ditch their proprietary plug - they either use an adaptor or add a port like on the Model 3.

No, they don't in Europe or Australia or NZ, A CCS charger plugs straight in with no adapters.

In the US they do, but its the US, so there is almost no standardisiation across states and brands. Hell, they can't even go metric yet.

Battery swaps for passenger cars are never going to happen, and they don't need to. Charging times are already approaching the realm of non-issue with the latest Tesla model 3 charging at 115kW for the first 60% of capacity.

Might be a different story for truck depots where having a forklift swap out the %00+kWh battery pack while the truck is loaded could make more sense than trying to provide multi megawatt charging connections.

I disagree. It is a far more efficient solution:
-means that the batteries can be charged at optimal rate to maximise life
-means that batteries and vehicle weights can be far lower, and so cars can be safer
-far lower capital tied up in a vehicle
-reduces need for (and enormous cost of widespread fast-charging infrastructure
-takes less time to swap a battery than fill a car with petrol.
-eliminates range anxiety
-makes it possible for majority of houses with PV on roof to go off-grid (as can use battery swap to provide domestic power in emergencies, with just a few minutes to get more).
-enables delivery of charged batteries to parked cars at night - like pizza delivery - to further streamline charging and reduce hassle

If you care about switching world to EV then standardised battery swapping is THE big thing that needs to happen. With increasing energy density (eg liceron at 500Wh/kg) we are likely to get to the point where the necessary battery is only about 100-200kg and <100L in volume, so quite technically feasible to swap robotically as tesla demonstrated 5 years back: https://www.youtube.com/watch?v=HlaQuKk9bFg

Some big car company, or consortium will offer this in next 5 years, and sales will come flooding to them with lower cost and better effective performance.

For some real-world context, my LG Chem RESU 10H battery in the home solar rig weighs a neat 100Kg and has a capacity of 9.8 kWh. Most light EV's will run around 5-7km/kWh....

And the economics of swappable are as for gas-bottle swaps: it converts an Ownership to a Leasing model, so that quality is consistent and capex is concentrated in a few entities, able to be regulated and monitored, instead of distributed over hundreds of thousands of amateurs....

Nope, In fact trying to force EV manufacturers to conform to a single standard for swappable battery packs would be one of the worst things you could do.

Do you force your toyota corolla spec car to carry round a ferrari spec battery pack, or do you force your ferrari spec car to perform like a corolla because of inadequate battery performance?

You constrain the car designers chassis design due to some arbitrary form factor.

How do you improve battery technology when the first time you go to the battery swap with you new super-dooper whiz bang car you get an old spec battery and your new shiny high performance battery disappears into the pool never to be seen again.

It really is about one of the worst things you could do to encourage better EVs to be developed. I can't think of anything worse you could do off the top of my head apart from put stupid levels of tax on them.

Rubbish, it turns car batteries into a low cost manufacturer independent international commodity that the car maker doesn't have to put any internal time or effort into developing or procuring or supporting, or making maintainable. The cars and batteries both get cheaper, and we avoid charging infrastructure monopolies like Tesla and others are trying to create. That helps lower development costs and entry barriers to smaller manufacturers increasing competition.

Supercars are an irrelevant market segment and nothing prevents them going for a special built-in solution if they want.

For different sizes can easily (logistically) offer multiple form factors or sizes of battery to suit bigger or smaller cars. And you can have multiple smaller batteries of the same size in one vehicle - eg 5x 10 or 20kWh standard unit, swapped robotically in a few seconds.

Battery tech gets improved faster with less capital tied up in infrequently used capacity due to the higher utilisation of the batteries - they undergo more frequent charge and discharge cycles because they are smaller. So they reach end of life in a couple of years rather than 10-25 if permanently embedded in a car, ready for the next step up in battery tech to replace them.

The batteries become easily re-used in fixed installations in homes or on building sites or for other applications once their capacity has dropped too much for car use. Or you rent them at lower cost for infrequent use by an elderly person in a runabout due to their diminished capacity.

Recycling becomes easier too.

You really haven't thought this through have you?

No, you are the one that hasn't thought about this.
Your arguments are daft:

"-means that the batteries can be charged at optimal rate to maximise life"
a) 95%+ of charging will be slow charging at home overnight or in the workplace car park. Slow charging is not a problem for battery life
b) The car limits the fast charge rate to what the manufactuer calibrates it too.. if they get it right (like tesla seems to) then fast charging does not hurt the battery. (ignore nissan leafs, they don't have active cooling of the battery so they cook their pathetic undersized batteries.)

"-means that batteries and vehicle weights can be far lower, and so cars can be safer"
a) what are the safety ratings on the Teslas again? https://www.engadget.com/2017/06/13/tesla-model-x-earns-a-perfect-nhtsa-...

"-far lower capital tied up in a vehicle"
a) but you think having racks and racks of batteries on chargers in battery swap stations all over the country isn't going to cost a fortune, or that cost isn't going to be passed on to you?

"-reduces need for (and enormous cost of widespread fast-charging infrastructure
a) except for the chargers at battery swap stations.. cos you'll either have fast chargers or lots of chargers on lots of batteries to deal with rush hour battery swap demand.

"-takes less time to swap a battery than fill a car with petrol."
Yep, true, except the only company thats built a battery swap station (and they only did it for the tax credits) has shut it down and said they wont do it again because its a dumb idea.

"-eliminates range anxiety"
a) putting a smaller lighter battery in a car (which therefore has less range) reduces range anxiety? Yeah, right!

"-makes it possible for majority of houses with PV on roof to go off-grid (as can use battery swap to provide domestic power in emergencies, with just a few minutes to get more)."
A) or they could plug the inverter into the fast charge port of the EV and do it that way: https://www.homepower.com/articles/vehicles/all-electric/use-your-electr...

"-enables delivery of charged batteries to parked cars at night - like pizza delivery - to further streamline charging and reduce hassle"
driving into your garage and plugging in a charging cable seems much easier. and for those that park on the street, and can't charge at work there are already answers.. 1) fast charging stations, 2) http://www.ladwpnews.com/ladwps-electric-vehicle-charger-installed-on-po...

"The cars and batteries both get cheaper, and we avoid charging infrastructure monopolies like Tesla and others are trying to create."
Batteries are already getting cheaper, and will keep doing so so long as there is a competitive advantage and space for innovation.. which is exactly what your idea would kill.

Charging infrastructure monopolies? You mean like the public chargers at Z stations which will charge any car that pulls up to them and has activated an account? Or the various power company provided fast chargers that do like wise? Tesla is not trying to build a monopoly, they are just trying to give their customers a good service, Tesla does not try to stop others building charging infrastructure, in fact they supply destination chargers to hotels and motels that all EVs can use. Dunno where you come up with this rubbish.

I have to agree, look how many idiots now run out of petrol. If you run out of battery you will need to be able to hot swap.

There are a thousands of reasons why a hot swap makes sense.

High-power universal charging stations so that urban etc. vehicles can be recharged in 10-15 mins max and stations dotted along long-haul routes (e.g. over Takaka Hill or Arthurs/Lewis passes). No more proprietary plugs e.g. Tesla...

Hmm... that gives me the impression a good place to put in-road wireless power chargers is in uphill sections, eliminating the need for any stops.

Incentives in the form of FBT reductions for companies, vehicle registration discounts and tax rebates have been proven to be the most effective overseas and are worthy of further consideration here given our massive renewable energy advantage.

I don't support direct payments to buyers or manufacturers as this would require upfront government funding and gets messy. However, approaches where government does not realise revenue from say registration fees and tax rebates can work well - they can't miss what they never had.

Price signals via avoiding petrol taxes and RUC work to a limited extent but are ultimately just saving pennies on the dollar. I would rather pay to drive an EV on the roads via a RUC-style system rather than being seen as a free-loader.

The creation of a vibrant used-EV market in NZ is also critical. As a poorer country it will take decades for new EVs to become the norm on our roads, whereas leveraging cheaper used EVs is one way to drive faster adoption. People used to mock early EVs such as the Nissan Leaf that retailed at $50k+ and got 150kms per charge, but as a used vehicle at $10-20k they are now an excellent option for small-car buyers.

Incentivising companies through FBT reductions etc would have the added bonuse of starting to solve the used car market when large fleets of vehicles are released too.

$10-20k being the cost of many brand new vehicles that do not have major battery replacement costs in the near future. Batteries & efficiency often last less then the written lifetime but just long enough over the short guarantee so unless it is a new vehicle you have to factor battery cost in EVs as well. At $10k they are already outside the affordability of many kiwis. Not to mention disabled kiwis who cannot access electric disability vehicles.

Completely misses the major health benefits of these vehicles. Unbelievable. Air pollution is a real killer, the present situation is just like being forced to smoke ciggies. We will be astonished at the improvement, just as we were surprised how much nicer going out became when smoking was banned (if you are a non-smoker that is).

Of course, I forgot, the EU focus on CO2, so as to help sell diesel vehicle fume generators to their deplorables.

Noise pollution too...

True, the major health benefits of EVs are hugely understated. Vehicles literally stink when I'm out on my push bike.

Roger, two thirds of pollution in New Zealand is attributed to wood smoke (depending on which government department report you read). I am sure you know what I do, and I have the solution to eliminating at least 90% of that pollution from domestic fire. The problem is calculated to cost the economy $4.3B per year. To be honest I reckon all these reports are bullshit, because no one wants to help with my innovation. The costs associated with my innovation to make it useful to them is simply a matter of them proving to themselves it works. Might cost a couple of hundred K. What is the return on investment for that? The cost to adopt the technology is less than $1000 per affected household, and like anything mass production would bring that cost down. Solving the problem would involve a total cost of 10% of the annual cost of the problem. The savings would compound. Don't go looking to bureaucrats for answers to serious problems.

http://www.ehinz.ac.nz/indicators/air-quality/health-effects-of-air-poll...

Air pollution mostly caused by fires in NZ. Sure you can tell people to stop burning wood for warmth but that too has negative health effects as well. Vehicles in NZ barely factor in comparison to other pollution sources. You seem to put far too much false concern in air pollution yet don't want to tackle the largest, most damaging & easiest to change form of it. Surely campaigning for clean air would be better served by someone promoting less toxic private fires. Yet we have those wanting to be closer to the environment promoting more house fires and burning of waste. You cannot have it both ways. If you want the argument for cleaner air in NZ you would drop campaign on EVs (something that not even can be achieved in 1-2 decades and certainly not with affordability and lack of public accessibility to communities for the poor & disabled), and focus on something that can easily be achieved with the current tech in NZ.

Please remember folks a lot of us live a long way from a plug. On roads that dont like cars. And in general we come home with a couple of weeks of groceries, a serviced fourwheeler, half a dozen 25kg bags of dog tucker and a back seat full of kids. So whatever you do please dont penalise us what cant yet utilise this technology.

The first manufacturer to produce a mass-market EV ute will be very successful indeed!

Don't forget you can plug in at home too - just like plugging a fridge. In many ways better than having to go into town to the petrol station.

And don't forget Floods - EV's have a very poor survivability if them electrons get - shall we say - Distracted by other Conductance.....and the recommended Wading depth for a Tesla S is.....zero.

I seem to remember fossil-fuel vehicles needing to breathe too. Maybe sacrificial anodes are the answer - but there are more connotations to ' underwater' than just 'wet'.

Ah yes, because of course just becasue tesla hasn't done it makes it totally impossible to do. FFS.

The war against internal combustion engines is a war against pollution in the cities and death rate caused.
But this is NZ, the only time Ive smelt fumes is Custom Street East and is caused by the buses.
So lets just fix the buses where required and let this electric car thing pass us by.
We can look again in twenty years..

pws - wrong. We don't have twenty years. Probably we don't even have ten. And electric cars are not a necessity; they're merely the first world attempt to continue it's self-indulgence.

Whether an electric fleet can be achieved globally is a moot point - only Norway, Iceland and New Zealand have a chance of powering their supplying grids renewably. In Australia an electric car is a coal-car, unless you organise your own solar.

We don't have twenty years. Probably we don't even have ten.

hmm...

https://www.bp.com/en/global/corporate/energy-economics/statistical-revi...

Seeing as you don't understand the economics of resource extraction. You might as well add to the list your lack of understanding of reservoir modelling.

only Norway, Iceland and New Zealand have a chance of powering their supplying grids renewably.
Really?
Funny that Costa Rica, Uruguay, Paraguay have essentially 100% renewable generation.
By memory Portugal also cracked it too, having a net surplus a couple of years back (if only for a few days).
Pretty much all of BC, Canada is hydro.
There are also plenty of comparable cases where FF thermal is contributing less than a quarter of total generation. It's likely that a significant amount of that is peaking thermal, too.

Renewable uptake is a function of technology and market conditions.
Australia will pretty quickly stop digging coal once the sunk cost of thermal energy starts exceeding that of viable renewable generation.

https://www.huffingtonpost.ca/blair-king/bc-energy-site-c-dam-hydro_b_79...

"This means that BC Hydro supplies less than 18 per cent of the total energy consumed in British Columbia and that the renewable electricity component represents approximately 17 per cent of our yearly energy consumption".

https://www.eeca.govt.nz/energy-use-in-new-zealand/renewable-energy-reso...

"In 2015 New Zealand sourced 40% of its total energy from renewable resources. Most of this was used to produce electricity'.

The problem is that all the largely-renewable-electricity countries, are currently :) using that electricity now. So it's actually a question of whether they have enough renewable potential - hydro being the best because it serves as a battery too - to displace the FF their transport fleet uses. Which is more than the electricity supplied portion by a long chalk. I can only see those three getting there - in our case by dumpng Tiwai, which more or less equates to our domestic vehicle usage.

But money is spun into existence as debt, which is a demand that there be energy to do work in the future. The EROEI of good fossil fuels (light sweet crude/anthracite coal) is so not matched by renewables that I suggest we have an issue with capex, one that will get worse with time.

Plus which the build energy required to replace a fleet that grew like topsy over decades, in short order, isn't available. What are you going to triage? And even as the attempt is being made, existing infrastructure - everything from reinforcing steel to plastic reticulation pipes to bitumen - is decaying. 0and M go up exponentially with infrastructure decay, and there's never been more on the planet. But you're advocating not only maintaining it, but building an electric fleet and shifting our culture onto renewable energy?

Ain't gonna happen. No amount of technology and certainly no ' market conditions' (that was a joke, right?) are going to change that.

But money is spun into existence as debt, which is a demand that there be energy to do work in the future.
True. I don't disagree.
However your perspective hinges on the fact that (incredibly liquid, thick) markets are unable to price this debt accurately. And that is an inherently perverse thing to propose. Good luck proving that one. But, it does appear that you don't have much faith in markets.

Sure, I advocate building an electric fleet.
However, I in no way want that aggregate fleet to be anywhere near as large as our current vehicle fleet.
We need to substitute that for more efficient methods of transport - of which there is huge potential.

Yes renewables are decreasing in feasibility as density increases. We cannot beat that.
But. Current generation capacity has been capped by historic technology. To ignore the effect of technological innovation is huge flaw in the argument.

We're getting closer. :)

I go back to basics. To be sustainable long-term means not drawing down finite resources (or recycling them as close to 100% as poss) and not using renewable ones beyond their replenishment rate.

We are hell-and-gone past those parameters, but we forget to remember other stuff. Roxburgh hydro is regarded by many as a ' good thing', renewable energy in the flesh. Actually, it represents who knows how many litres of fossil fuel input, each litre neither mitigated in CO2 terms nor reusable by anybody, ever. And the edifice still requires FF input.

It also becomes a systems analysis problem - the same overlooking as with Roxburg hydro, overlooks the fact that city-derived 'incomes' may not be quite so valued, respected or demanded in a reduced-energy society. So the ' need to get to work', usually assumed unchallenged, may well not be so universal. So electric public transport (I'm in BC, as it happens, those articulated trolley-buses are fantastic - makes the Skeggs-led Dunedin decision to go diesel look stupid - just as it looked to me at the time....) is probably a good thing, but maybe not needing to carry the current peak loads....

Actually, it represents who knows how many litres of fossil fuel input
Again, my point. Don't assimilate historical technology with current technology. Such infrastructure was built with fossil fuel, because it was the predominant energy source at the time.

Yes. The planet is finite. No one is denying that.
What I am arguing is that to simplify it to a singular finite degree ignores technology and consumption shifts.
Throughout history we have transitioned due to technological innovation and scarcity/relative cost disadvantages.
We used manual labour until water power. We used water power until steam technology. We used coal (ignore turbine use) until petroleum. We used petroleum until nuclear.
Non of those resources reached their finite limit before they were superseded through technological shift and market economics.

city-derived 'incomes' may not be quite so valued
There is absolutely no justification for that, especially under your premise.
Cities arise due to the various agglomeration effects they provide. At the foremost - relative efficiency in energy usage. If your argument is that citizens will out migrate under energy scarcity, you haven't considered your position very well.

But they all have finite limits, and our population and per-head demand is increasing exponentially. For instance, water=to-coal happened with less than a billion people.

Again, market economics don't cope with ultimate scarcity and exponential growth of demand - no number of replacements cope with doubling-time. I give talks about that - needing two plantes, then 4,6,16,32.....by 19 doublings you need a million planets. Very soon a universe. Doesn't happen. Can't. Exponential growth on a finite planet is impossible.

City 'work'? In energy-flow terms (and therefore in work terms) a lawyer, say, is superfluous. In energy terms, entirely parasitic. He/she may well be able to currently charge someone a number of tokens, which he/she can exchange for a BMW - but that expectation and current state, beast no correlation to the availability of the resource components of the beamer, or to energy availability. Curtail the energy, and what is the lawyer worth? Would there be enough interaction to need them? How many city 'jobs' would pass the ' needed' test?

"and our population and per-head demand is increasing exponentially." Peak baby was 1990 - how can population be increasing "exponentially"? People living longer doesn't hide the fact there will never be more children on the planet.

"By Bernstein’s forecasts, coal will peak first around 2020, followed by oil in 2030, and the top for overall consumption two decades later.

So, overall peak energy is still at least 30 years away, but per capita consumption may not have more room to increase."

https://static-ssl.businessinsider.com/image/57c09763b996eb74008b4c41-96...

This is real tin foil hat stuff, powerdonkiwi.
I must say, it does make me chuckle.

You don't seem to understand the most basic premise of a market.
Growth almost always represents some form of concavity - biology/history has shown us that for millennia.
The example of the lawyer is completely arbitrary and nonsensical.

I think the best thing to do is to agree to disagree on this.
Or, we make a bet. How about you offer to put up all your intangible energy backed possessions (cash included as this will be worthless in your world) to the charity of our choosing should we not have any fossil fuel reserves in (as you predict) 20 years time.

I should have added the rentiers to the lawyers. . :)

I
But actually, I see a globa lfiscal meltdown in the face of energy (and resource quality) degrowth. Which kinda puts the skids under both the lawyer and the EV set. Then I see war over what's left.

Me? I live on 200watts of solar and 6amps/12volts of mirohydro at home - have done for 15 years. It can be done but I don't see many with th self-discipline to do it. Unlimited indulgence X advertising x propaganda x more people doing it = collapse.

Even without a TV you've still got your work cut out to increase population growth exponentially.

Most of the planning for a low carbon economy assumes 2030- 2050 as desireble targets and 2050 is 32 years away. That is three generations of car development and Im suggesting we sit it out until 2040 and avoid the electric debacles that will be cluttering our roads if we are early adopters.
A practical path would be introduce emissions standards and retire our most polluting vehicles, not getting ahead of japan, the source of our second hand cars.

Agree.
To think that in 3 generations, we won't have cracked EVs is ludicrous mode (mind the pun) considering the huge advances that have been made in just the previous decade.

But we have cracked EVs Nymad, and in a way that ordinary folk find useful. Every time I step outside the Dunedin office a Nissan Leaf goes past. Usually the family runabout, a used import, and they got if for between $10K and $25K. They are buying in droves.
The way it's going next year everytime I step outside the office, there will be two EVs going past.
I think that if it's ordinary folk, and they find it desirable in numbers, then it's great evidence of what's happening.

i agree-- this is technology that needs to be simply bypassed and investment directed to a third and fourth generation of vehicle/ transport -

So much electricity is actually generated globally by fossil fuels - and batteries as we all know are a massive use of very finite resources - and virtually non-recyclable materials - currently going where after their short lifespan ?

Lets focus on the step beyond

electricity in new zealand is expensive, the government is looking at implementing ruc's on ev's once the uptake is sufficient and the environmental impact of producing the batteries for ev's is huge. petrol engines are extremely efficient for what they are and we should be promoting newer vehicles -rather- than saturating the market with 10-15 year old grey imports that dont meet emissions standards

when new zealand does something sensible i.e. invest in transport infrastructure or nuclear fuels we can look at ev's but not now.

No - those new vehicles will still have mechanical life left in them decades from now - whether the fiscal crash or climate or scarcity wars come first, one of those will render any fossil-fuelled vehicle bought new now, a stranded asset.

Existing (where the build energy has been expended) vehicles beat new ones every time. An old Corolla beats a new=built Prius hands-down. That debate was over, a decade ago. You a car-salesperson?

That's false, electricity here is not expensive. NZ is the 11th cheapest for electricity in the OECD. However, NZ has bigger bills than most countries because our usage is high - 6th highest in the OECD. It's a usage problem from poorly insulated houses and other general inefficiences that cause the big bills - not a high unit price.

There is one simple point every one above and the report author has missed - where will the government replace the tax it gets from fuel excise, road user charges, and registration fees from? This tax goes to fund the infrastructure, ACC and into the consolidated fund (probably to pay for MP salaries and retirement benefits while they starve the workers!). This is no small change, and will need to be replaced somehow. So where will it come from? I can't see it happening.

Not to worry, the TWG will sort That out (and Us along with it...)

Exactly the same way diesels do it now.. RUC. Diesel fuel doesn't have ACC levy or fuel excise on it (thats why its so much cheaper then petrol in NZ, but more expensive in most other countries)

EVs will be paying RUC from about 2021 (I think its when the EV fleet hits 4% of total registrations?), and the ACC levy will be piled on the rego like it is now for diesel cars.

If they can make petrol expensive enough people might be tempted to switch. Even if we could get people to switch from single occupant cars to ride sharing or ultra LEVs. A new car produces about 120g/km (EEC figure) but a Burgman 125cc scooter is under 70g/km. Would help with congesting and parking around inner cities as well where you could have 3 or 4 scooters occupy the same parking space as just one car. We need to think about being a bit more European. We can't go on throwing money at new highway projects (which typically have very long project delivery timeframe anyway) without asking if this is really the best way forwards.

Agreed on plug standardisation comments. In fact my understanding is future cars will be able to use multiple charger types anyway.

My hope is that the standard autonomous EV of the future will be the size of a quad-bike, with proper canopy, like:
https://newatlas.com/peugeot-tilting-phev-scooter/52516/?utm_source=Gizm...

Fit 4x as many vehicles in same space as an SUV, with lower capital and energy consumption per passenger carried and no need to mess around with ride sharing.

Damn that would be cool. You sit two people on a quad, one behind the other. Very few cars have more than two people in them. That could totally work but the safety aspect would probably put the governments off.

If you make petrol expensive enough you will literally be punishing and even killing those who are reliant on it for medical access. There are no electrics available for disabled users (who often cannot even afford a vehicle for starters on starvation levels of income). Fundraising only goes so far and grants only cover petrol (think toyota hiace not expensive small EVs for able bodied wankers). E.g. https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12090405&...

The simplest & least cost path for NZ is to:

1) CO2 - Continue to include the ETS in the petrol price. The carbon price is likely to rise over time
2) Local Pollutants - Add a local pollutants excise tax to cover the health costs of vehicle emissions
3) Continue the existing "subsidy" of not requiring electric vehicles to pay Road User Charges in the short term
4) Then manage the transition of electric vehicles to paying full RUCs vs petrol/diesel vehicles paying higher fuel excise taxes so that the electric/hybrid fleet continues to grow.
5) Reduce the immigration rate to a sustainable level given the growth in vehicle emissions has largely been driven by that factor
6) Drop any thought of an absolute carbon target at 2050 - we should let the international carbon price (or proxies thereof) determine the rate of change.

We don't need anything more complicated which would bring additional administrative/subsidy costs.

1) Carbon price adds about 4c/litre onto petrol price. Even if it triples it doesn't make any difference compared to taxes, oil price and exchange rate. Tripling it puts up the price of electricity and other things a lot.
2) that would achieve something if you wanted to get us out of petrol - if you did it right.
3) not sustainable in the long run

RE 1) The current carbon price is around 20 per tonne. The productivity commission report looked at values as high as 200 per tone long term. That would increase the ETS to 40 cents per litre.

RE 3) - yes & that's why 4.

World economy baseload demand electricity growing at 2.5% annually = increase of over 40% by 2030. Switching two-thirds to EV would require 70% as opposed to 40% increase.

Is NZ so different..if not, from where?

I'm a fan of moving to non-polluting energy. But is there a risk here of providing a subsidy to the rich? ie even with a subsidy only the better-off can afford a new vehicle. And then they get the benefit of cheap energy denied to the worse-off stuck with ever-increasing petrol costs? Just a comment.

I'm a fan of moving to non-polluting energy. But is there a risk here of providing a subsidy to the rich? ie even with a subsidy only the better-off can afford a new vehicle. And then they get the benefit of cheap energy denied to the worse-off stuck with ever-increasing petrol costs? Just a comment.

I'm a fan of moving to non-polluting energy. But is there a risk here of providing a subsidy to the rich? ie even with a subsidy only the better-off can afford a new vehicle. And then they get the benefit of cheap energy denied to the worse-off stuck with ever-increasing petrol costs? Just a comment.

I'm a fan of moving to non-polluting energy. But is there a risk here of providing a subsidy to the rich? ie even with a subsidy only the better-off can afford a new vehicle. And then they get the benefit of cheap energy denied to the worse-off stuck with ever-increasing petrol costs? Just a comment.

100% EV's what a load of stupidity!!

An EV won't get some rural kids to their bus stop and back let alone their school.
Farmers in the back blocks mustering want get too far, no wonder the hill country farmers are being targeted by Wellington......

The clueless live amongst us!

Then there are some who argue for themselves and their lifestyle, as if immutable. Then they try and argue from that stance as a base-line. That is what I'd call clueless.

Given that fossil fuels are finite, that CO2 is already past 350ppm and that growth is exponential, there is little point in arguing for ff-powered transport. It's days are numbered.

And back-block mustering - maybe even buses and who knows, schools as we know them? - is not an immutable ' given' either. Seeing what is coming, folk like me have long argued that food will become local in every sense of the word. What classes and city-proximity of land will still be in use? If global finance cannot cope with permanent degrowth, what chance global tradw will continue?

Try seeing things as they are and are evolving, maybe?

Electric cars still need roads and other infrastructures to allow them to operate. If we are no longer collecting petrol tax, how are we going to pay for all that?

the same way diesel cars pay for it. RUC

Paying for bitumen isn't the problem - that's tjhe same misunderstanding as the market-forces comment above.

Finding something to make the roads from, and the energy to build/maintain those roads, is the problem.

We haven't progressed that discussion at all - but I see rail as more likely, material-wise and perhaps rolling-resistance-wise too. Too many folk take too much of the now as 'given'.

Most commutes are short maybe 10 -20 km. Not sure why everyone is so concerned about battery range. Most people take a long trip 4-5 times a year , if your regularly doing 500 k, trips , EV is probably not a good option . For around town running (probably 80 % of all motoring), EV is fine .

Actually most commutes are for logistics & trade. They are neither short nor can they access EVs. Pricing and vehicle design. Think of functional vehicles trucks, vans. Not EV sports cars and ones for wankers trying to punish the poor & those with less access just so they can have acknowledgement for their efforts at being wankers & having more money than most people.

My favourite ev - and driver:

evahakanssonracing.com/

Watched the Goodwood festival of speed streaming on youtube last night.. Fastest two cars up the hill were both electric, and one of them is road legal The VW ID R pikes peak monster and the Nio EP9 (1300 all electric road legal HP)

"the cobalt supply chain is dominated by two companies, and a single country: the Democratic Republic of Congo (DRC). Canada, Australia, the Philippines and Madagascar also mine cobalt, but the DRC dwarfs them all, heaving out two-thirds of the world’s cobalt in 2017. ‘After DRC, it is very fragmented. No other nation contributes as much as 10 per cent of the cobalt supply,’ says Rawles. This keeps battery manufacturers awake at night. The DRC suffers from conflict and cobalt there is linked to illegal mining and child labour. ‘I’ve had multiple Chinese carmakers in my office really worried [about cobalt supply]. They wish they’d thought about this two years ago,’ says Ceder. Yet reliance on the DRC is set to continue."
https://www.chemistryworld.com/news/battery-builders-get-the-cobalt-blue...

New battery chemistry severely reduces the amount of Cobalt in the cells, sorry, but your scaremongering is failing again. And as I've told you before there are many companies mining cobalt in new places.. like Western Australia and New South Wales. Just the usual lag from when a resource becomes in heavy demand and production scales up to meet demand. Move along, nothing to see here.

Thanks Praggers but I don't see evidence of it as yet. Innovation will win out in the end for sure.

"There isn't a better element than nickel to increase energy density, and there isn't a better element than cobalt to make the stuff stable," Marc Grynberg, CEO of materials company Umicore, told Reuters. "So (while) you hear about designing out cobalt, this is not going to happen in the next three decades. It simply doesn't work."

One potential snag is the fact that the majority of the world's cobalt is a byproduct of some other metal mining. In 2017, about 69 percent of the world's cobalt was mined as a copper byproduct and 29 percent as a nickel byproduct. So the availability of cobalt right now is pretty heavily dependent on the health of the markets for copper and nickel."
https://www.cnbc.com/2018/07/09/automakers-and-tech-firms-are-scrambling...

" So the availability of cobalt right now is pretty heavily dependent on the health of the markets for copper and nickel."

Lol, and what do electric cars use lots of.. Nickel (in the batteries.. quite a bit of it) and Copper in the motors, chargers and all the wiring.

https://www.bloomberg.com/news/articles/2018-05-02/tesla-supercharging-i...

"While the weight of its Model 3 is on par with gasoline-powered counterparts, its battery cells are of the highest energy density used in any electric vehicle, the Palo Alto, California-based company said Wednesday in the letter. “We have achieved this by significantly reducing cobalt content per battery pack while increasing nickel content and still maintaining superior thermal stability,” Tesla said.

Tesla says the cobalt content in its nickel-cobalt-aluminum cathode chemistry is already lower than next-generation cathodes that will be made by other cell producers with a nickel-manganese-cobalt ratio of 8:1:1."

The elephant in the room is the increasing demand far out weighs incremental advancement.

"The end for cobalt?

Quite simply, no.

Panasonic and Tesla have made excellent improvements to their cell technology whilst being able to reduce cobalt dependency, but this is likely to pretty much be the end of the road of cobalt reductions in NCA.

There is little room left for Tesla to manoeuvre and further reduce the cobalt in its cells.

And with any new technology that could usurp NCA or NCM still on a 10-year horizon, cobalt’s use in lithium ion batteries is here to stay.

Benchmark estimates that cobalt’s use lithium ion batteries will triple between now and 2026 as a wave of EV demand engulfs the industry. Whilst efforts are being made to reduce cobalt dependency, the order of magnitude of growth sales will far outweigh this.

To put this into a very short term context, Tesla expects to increase its vehicle production by 150% between now and June 2018 – and the biggest Model 3 increases are yet to come. Benchmark expects output to sharply rise from September onwards.

This EV surge is far more significant than the reduction of cobalt intensity which is close to its limit.

Whilst their is political scrutiny on the cobalt supply chain, there is a huge amount of work to be done to simply increase supply to meet our EV demands.

More cobalt will be needed and the reliance on Democratic Republic of Congo as the primary supplier will increase.

The cobalt conundrum continues."
http://www.benchmarkminerals.com/panasonic-reduces-teslas-cobalt-consump...

you lost me at Tesla says...

Common traits of the European countries promoting Electric Vehicles (and taxing old ones) are: good public transport to help avoid driving, moderately dense cites which lessen the need to drive - neither of which we have - and new Electric vehicles that cost a much smaller proportion of the average wage than they cost here.

Kind of a formula to clobber the NZ poor, isn't it.

That, and battery EVs are still fairly primitive and evolving as quickly as hell. Would hate to spend the money on a battery car to find out Hydrogen EVs are actually a much better answer (which they seem to be) - https://en.wikipedia.org/wiki/Hydrogen_vehicle

If you even read the second paragraph on that wiki page you'd see why hydrogen cars are destined to fail.

"As of 2014, 95% of hydrogen is made from natural gas. [...] The drawbacks of hydrogen use are high carbon emissions intensity when produced from natural gas, capital cost burden, low energy content per unit volume, production and compression of hydrogen, and the large investment in infrastructure that would be required to fuel vehicles."

Hydrogen is a vector, not a source. It takes more energy to create than it delivers. Stored, it delivers good miles per tankful, but it's still a negative energy equation.

https://www.energy.gov/eere/fuelcells/hydrogen-production-electrolysis This process powered by PV arrays and using rainwater home units are becoming available now https://www.vox.com/energy-and-environment/2018/2/16/16926950/hydrogen-f.... Low pressure storage for home use (Hyquip is a local example) and high pressure for mobile applications. The only combustion or fuel cell product is water. The technology is evolving so fast I think real caution is needed before we go for a national adoption of anything that could swiftly be obsolete.

Sorry, I got to line "That’s a potentially enormous market with plenty of existing demand, which HyTech hopes will capitalize its second product, a retrofit that will transform any internal combustion vehicle into a zero-emissions vehicle (ZEV) by enabling it to run on pure hydrogen. That will primarily be targeted at large fleets."

Several of the major car companies have tried to build ICEs that run on hydrogen, and burned billions of dollars in the attempt.. and all failed. Mazda had some success with their rotary engines, but everybody else failed miserably, the problem being that hydrogen burns too fast/energetically for piston engines. The idea of a bolt on retrofit kit for just any old ICE is a joke. https://en.wikipedia.org/wiki/Hydrogen_internal_combustion_engine_vehicl... <- requires a complete strip down and rebuild of an engine to replace head gaskets and con rods.

I know how many kwh mu panels give me, and I know you don't gain in the conversion. Then I've got to compress it? Just what is the EROEI down to by then?

And my solar array is fossil-fuel-built and delivered.

But show me the hydrogen source that is energy-positive. I've yet to see one.

We cannot even recycle our plastic milk bottles how are we going to recycle our batteries ?

Electric cars are not the solution, they are an option and even then they are a stop gap to something better.
The biggest problem is peoples attitudes. Cars need to be getting much, much smaller not bigger and bigger.
1500-2000Kg to move around someone with what an average weight of 85Kg ? its just stupid. My hope is that dedicated electric cars combined with traffic congestion which will force lane widths down will also result in smaller petrol driven cars with 1000cc turbo engines that use 1/3 of the fuel of your current SUV dinosaur.

We invented the most efficient form of transport years and years ago, it is called a bicycle. More use of our own god given energy will mean more of the other sorts of energy for when it's needed and fewer lard arses.

For that, we need intensification.

And some way to address the blanket exemption to red lights that hybrid Toyota Prius's and Camry's currently enjoy in the central city.

This will never happen. It's an arms race. The house wives want the big intimidating SUV to feel safe because everyone else is driving big intimidating SUVs.

Answer. Buy an intimidating electric SUV. You can you know.

Sadly bigger heavier vehicles, with greater buffer areas around the passengers are safer for the passengers, and contribute significantly to the reduction in road fatalities over the last few decades.

Govt considers it worthwhile to spend a few million per roading fatality averted for road safety, so saving those extra lives via bigger vehicles is likely quite economic in terms of the extra fuel used.

Cars, above and beyond utilitarian of jap imports, are mostly purchased for reasons of fashion, like Gucci handbags you can sit in.

electric cars are better now in every way. No matter how many lies are told by petrol companies as of late, they are coming.

The trouble will all these incentives is that much like the fuel tax they punish working people who have old cars and long commutes. Wealthy electric car owners will get easy car parking, priority lanes and massive discounts on flash new cars.
EVs are already subsidised through not paying road user charges until 2021. Perhaps that could be extended a few years but I'm already seeing plenty of Leafs on the road.

If the govt are worried about pollution that actually affects humans they should cut back on
1) Smokey diesels - the level of particulates is crazy here.
2) Loud annoying vehicles - motorcyclists, rude mopeds and hoons. I have some wannabe Valentino Rossi racing his crotch rocket R1 down the street every night and the cops never do anything.

Incentives via Tax ! A genius move not. Why does anybody and anybody who wants to promote something only think of a tax change.
We need less tax interventions, not more.

To say it is a good idea due to our heavy use of renewables is silly, because the marginal generation capacity is from fossil fuels. We don't have spare renewables, and are unlikely to get them any time soon. NZ uses about 5GW on average. About 4GW renewable, 1GW fossil fuel. We would need about 3-4GW of new renewable (solar/wind) at about $1.5billion per GW to replace the fossil fuel use, and then another 3-4GW of new renewable to cover a transition to electric vehicles.

Pushing EV's via preferential tax treatment is, as yet, an expensive folly. All we need do is wait another 5 years and the costs will come down (via improved tech and mass production learning curves) to the point where they will be economic on their own merits without subsidy - so that we don't need to burden NZ's economy with an expensive but environmentally meaningless/insignificant PR stunt.

If you want to spend money on something useful invest in the massive renewable generation we need (probably PV, perhaps wind), and free up the gas for export earning methanol production.