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$2,000 per car per year is the estimated value to the New Zealand electricity system that electric vehicles (EVs) could deliver by sending power from a car’s battery back to a house, building or to the grid during electricity demand peaks, such as in cold winter evenings.

The value to the electricity system from ‘Vehicle-to-grid’ (V2G) from electric trucks could be even higher at $10,000 per truck per year for trucks returning to a depot in the early evening.
For heavy vehicles with low utilisation during the middle of winter, such as milk collection trucks or tourism coaches, the value may be much greater per heavy electric vehicle per year as V2G supports winter electricity demand peaks, and recharging when there is cheap electricity overnight.
For owners of V2G-capable EVs to benefit from their sizeable share of this value, the electricity sector needs to offer a new ‘type of use’ discounted electricity pricing for EV charging with suitable remote charging management. Electricity retailers partnering with EV importers to create bundled offers of an EV, a charger and a power deal will help make V2G easy for consumers.
V2G is only possible with the right EV and the right charger and V2G-capable cars, trucks and buses are starting to become available. Motorists and fleet owners considering buying new electric cars, buses or trucks should ask dealers if the EVs they are considering are capable of V2G charging, if the EV battery warranty covers this and what type of V2G-capable chargers they should use at homes or in depots.
Consistency across the electricity sector for the right arrangements to facilitate V2G is also needed, particularly across local networks, the report concludes. An inconsistent approach across New Zealand risks significantly reducing the benefits of V2G for New Zealand.
The findings come from a multi-client study by Concept Consulting and Retyna Ltd funded by AA Research Foundation, Aurora Energy, Ecotricity, EECA, Fonterra, Horizon Networks, Meridian Energy MinterEllisonRuddWatts, Orion, Powerco, StarCharge, Transpower, Unison Networks and WEL Networks.

The report is freely available here.

$1.7 billion has been provided so far towards state highway and local road recovery from the 2022 North Island Weather Events, Waka Kotahi NZTA has told the Minister of Transport in its Briefing to the Incoming Minister, publicly released on 1 February 2024[1], with more funding needed. 

The Agency also told the Minister that one of the strains on the current transport funding system is the “increasing frequency and severity of weather events”. There is now clearly a link between roading costs and climate change. 

The new Minister, Hon. Simeon Brown, announced that from 1 April 2024 battery electric vehicles and plug-in hybrids (PHEVs) will start paying distance-based Road User Charges (RUC).  Road User Charges are payable on vehicles which use energy that doesn’t incur fuel excise duty. This includes diesel and electric vehicles.

EVs should contribute towards the costs of transport, roads and their maintenance.  But what RUC rate would meet the Minister’s aim of “fairness and equity”?

The rate for 100% electric light vehicles (up to 3.5 tonnes) will be $76 per 1,000 km, the same rate that light diesel vehicles like utes and vans currently pay. PHEVs will pay $53 per 1,000 km, recognising that they will pay both fuel excise duty and RUC. RUC needs to be purchased in advance of the distance driven and each purchase is accompanied by a transaction fee.

The predominant vehicle fuel here is petrol, so how do the different government fees stack up against petrol vehicles?  Three popular vehicle makes which come in different drive technology flavours, are compared in the following table, driving a typical annual distance of 14,000 km[2].

Petrol hybrids pay significantly less than ordinary petrol models, due to their good fuel efficiency.  The electric Kona will pay around 20% more than the petrol Kona, and double that of the hybrid Kona.  Diesel ute drivers get a good deal by paying RUC in comparison with excise duty paid by an equivalent petrol ute – about a third cheaper for the popular diesel Ford Ranger. 

A comparison with PHEVs is not included as this varies significantly with the trip driving distance and frequency of charging.  PHEV owners that do short daily distances and charge frequently so that they mainly drive using electricity will pay similar costs to 100% electric vehicles, but some PHEV owners have already been asking if they can have their electric charging port removed to avoid paying RUC[3].

And no, the EV battery weight is not a factor in the higher pricing.  Waka Kotahi NZTA states “vehicles weighing less than around 6 tonnes do almost no damage to roads and so they impose very similar costs on the road network.”[4]  Similar costs in terms of vehicle weight, but, looking at the big picture, not similar costs in terms of damage from climate change.

From 1 April, the signal from government will be to buy a hybrid, not an electric vehicle, now that the Clean Car Discount feebate scheme has gone. Hybrids are great for fuel efficiency, but New Zealand has a fantastic advantage in that 89% of our electricity generation is already from renewable sources. EVs have greater benefits for climate change here than in most countries which have more fossil fuel generation in the mix.

The RUC rates for electric vehicles need to reflect the fact that climate change is now a significant contributor to roading costs. More will need to be invested to improve roading resilience to extreme weather events, not just clean up the mess. RUC rates need to be set so that electric vehicles pay less than equivalent vehicles with higher emissions, not more. There also needs to be new ways of raising funding for transport, including congestion charges and zero emission zones for cities.

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[1] Briefing to the incoming Minister of Transport 2023 (nzta.govt.nz)

[2] Fuel consumption figures are from NZTA’s Rightcar NZ  website.  RUC transaction costs assume two online

purchases of 7,000 km of RUC each per year.  There are some taxes and levies paid on diesel fuel which do not go to the National Land Transport Fund.  Auckland regional fuel taxes are not included.

[3] Hybrid owners trying to remove plugs to avoid road user charges | RNZ News

[4] RUC-CAM.pdf (transport.govt.nz)

A new study on Electric Vehicles (EVs) shows a more rapid uptake of EVs could save New Zealanders $15 billion in vehicle, fuel, and carbon emission costs by 2050. https://www.concept.co.nz/updates.html

The study by Concept Consulting and Retyna shows there is both an economic opportunity and an environmental imperative to accelerate EV uptake:

• The opportunity is because EVs are already cost-effective for some New Zealand households and businesses who drive longer distances each year, and at the current rate of cost and performance improvements they should be economic for the vast majority of New Zealanders purchasing a new vehicle within a few years.

• The imperative is because vehicles are a major source of emissions, and without accelerated uptake, it will be substantially harder for New Zealand to meet its climate change commitments.

The study shows that accelerating the uptake of EVs could save New Zealanders $10bn in vehicle and fuel costs out to 2050, with a further $5bn reduction in carbon costs.

“Given our low-cost renewable electricity resource, the environmental and economic gains from EV uptake should be among the greatest in the world” says Concept Consulting Director, Simon Coates. However, the study finds that our current lack of policies to overcome the significant barriers facing EV uptake is resulting in New Zealand falling substantially behind overseas markets such as Europe.

Drawing upon overseas experiences, complemented with NZ-specific modelling, the study identifies three ‘core’ policy measures to deliver optimal rates of EV uptake. Two of them were proposed, but not implemented, by the last coalition government:

• A Fleet Emissions Standard (referred to as a ‘clean car standard’ in the 2019 proposal) which requires vehicle importers to supply vehicles whose average emissions across the fleet are below a target, backed up by a financial penalty for falling short.
• A Feebate scheme (referred to as a ‘clean car discount’ in the 2019 proposal) which offers discounts for low-emissions vehicles funded from increases in the purchase price of high emissions vehicles.
  
  

The third policy measure is an ‘ICE ban’ which would prohibit the sale of new petrol and diesel Internal Combustion Engine (ICE) vehicles. The study indicates an appropriate date for such a ban for passenger vehicles should be no later than 2035, and probably earlier subject to further analysis. Such bans are increasingly being put in place by overseas countries on the grounds that not to do so would compromise their ability to meet their climate commitments. In this vein, the key right-hand-drive market of the UK recently brought forward its ban to 2030, and Japan has introduced a 2035 ban. Without such a policy, New Zealand risks missing its own targets, and being a petrol and diesel vehicle ‘dumping ground’ for manufacturers wishing to sell their remaining stock, thereby locking-in higher emissions for New Zealand over the 20-year average lifetime of a vehicle in New Zealand.

The study identifies that implementing these complementary policies together will maximise their collective effectiveness and deliver the greatest benefit to New Zealand.

While greatest attention has been on light vehicles, the study finds that a similar suite of policies are required for trucks – the fastest growing source of our vehicle emissions, and a contributor to the $15bn modelled benefit from faster EV uptake.

The study reflects the views and analysis of Concept and Retyna, and was funded by 15 companies and organisations from across the electricity and motor vehicle industries.

In March 2019 in Hong Kong, Retyna delivered an international one-day workshop on developing vehicle fuel economy regulations for Asia Pacific Economic Cooperation (APEC). The workshop was attended by representatives from nine APEC economies.
The workshop report, including an appendix with all the presentations from the workshop, is available on APEC’s website here: APEC Energy Efficiency Policy Workshop Report
Topics covered include:
– Transport contribution to GHG emissions in APEC economies
– Suite of policy measures to improve vehicle fuel economy
– Vehicle fuel economy policies in APEC economies
– Chile’s proposed fuel economy standards: the process of developing new legislation and features of the standard
– Test protocols underpinning fuel economy regulations: the transition to Worldwide Harmonised Light Vehicle Test Procedure (WLTP) and its inclusion in CO2 policies