Welcome back and Happy New Year. The Christmas break has had the team at Boost Towers mulling over what challenges, changes and innovations might make the biggest difference globally and locally for the automotive industry. It also had us reviewing which have last years blogs were most accurate. It looks like some were a little optimistic, some wide of the mark and some surprisingly accurate. Of course this time last year we thought we had largely completed our Covid-19 pandemic journey; that didn’t make our predictions at all.
1. Ora Cat Becomes the Best Selling BEV
Ora Cat is a well designed, good looking EV with a 250-300km range, which makes it a perfect second car for many families, and an ideal first car for young and old alike. With a sub $40K target price, Ora Cat will be the most affordable EV car on the market. Haval and GWM have been quietly growing share and building their reputation; Ora will stretch the brand portfolio and will be the most significant brand to enter the market this year. The network is already established, so market entry will be rapid. Ora Cat’s sales rate will surprise many, but as long as they have at least 9 months on sale, Ora Cat will be New Zealand’s best selling EV.
2. Tesla EV Dominance Continues
Model 3 has been wildly successful, especially for a segment that was almost dead. No one buys sedans anymore. At least that was correct until Model 3 came along. Model 3 killed Model S and Model X sales in New Zealand however, but the next Tesla model will hurt Model 3. However, it won’t kill it. Model Y offers a hatchback and slightly different silhouette, to Model 3 (some say less successfully), and therefore will have broader appeal. Expect Tesla’s growth to be strong in 2022, but not quite the same level of growth as 2021.
3. New Brands Will Have Strong Growth
2022 will see the new EV brands come to New Zealand. Ora, BYD and Polestar are confirmed, plus at least two others.
Ora, part of GWM will launch in Q2 and will be sold through the existing Haval, GWM network. With fresh innovative styling and aggressive price points Ora will make real headway in the market.
BYD after a number of false starts will enter the market in late 2022. BYD’s local distributor Nexport has struggled with the right product specifications, availability and timing which illustrates the challenges of start ups. BYD are looking at a direct to retail model, and at one point were looking to be more disruptive than Tesla. Not everything needs re-inventing, and only time will tell how much of the back-room planning has helped them launch fast.
Polestar who already are officially already here but haven’t retailed anything yet (at the time of writing there are just 12 cars registered in New Zealand, and there is no pricing on their website). Overseas Polestar’s retail showrooms are known as Polestar Spaces, and the sales model is online first with home delivery.
4. Most of the 5 Best Selling Cars Will Be New Entrants
Tesla Model Y, Polestar 2, Ora Cat. These three new entrants will all make the top 5 passenger car list and each will switch a large proportion of internal combustion engine customers (ICE) to BEV. The race between Polestar and Tesla Model Y will be one to watch. Model 3 sells incredibly well for a sedan, but the market has moved on, Model Y is a hatch, an almost SUV variant of Model 3, however Polestar executes this crossover more convincingly. The Tesla brand is a powerful one. Tesla continues to dominate almost every market it competes in, and its lead will strengthen in ’22 because of Model Y. Sure, Y will dent Model 3 sales, but combined they will be a tour de force. The curve ball is Ford’s Mach-E. Highly rated and much anticipated it will be a shame if its late to the NZ market, but don’t expect it before Q3 at the earliest.
Lastly note the use of the word car, not SUV. There are few SUV BEVs confirmed for 2022 that will shake up the market. Strong European performers VW iD4 and Skoda Enyaq are not yet confirmed for NZ, although a few grey imports have arrived.
5. China Leads Race for BEV Passenger Vehicles
We haven’t yet seen many of the new Chinese car brands in New Zealand. They are getting ready. China builds 20 million vehicles a year. As context Japan (#2) builds about 7m, Germany about 3.5m and the US about 2m. China’s managed economy has been investing long term in EV production (big incentives and grants for R&D, big carrots for domestic consumers), to the point where the world’s largest car producer is an EV leader. None of the Chinese brands are keen to be domestic only brands, and so their scale and ambition will naturally see them grow overseas. Right now, Norway is the gateway to Europe for many, because BEV sales are greater than ICE sales, but what happens in LHD markets will quickly come to RHD markets, and so a wave of Chinese EV brands are just around the corner. Expect to see at least 2 new Chinese car brands enter the market after BYD and Ora.
6. Cargo Wars – The Switch from Diesel Utes to Electric Vans
Light Commercial Vehicles have largely been immune to electrification so far in New Zealand. LDV have been electric market leaders with their EV80 and eDeliver 3. Late in 2021 Ford launched Transit Custom PHEV. There are a number of new entrants eyeing the LCV market. While electric utes have been teased by Ford, the F150 Lightning is a long way off, Rivian’s R1T won't be here until 2023 at least, Tesla’s Cybertruck may never make it to Australia or New Zealand, and details on Toyota’s electric ute are very scarce.
However there is much more action in vans and light duty truck segments. BYD launched their T3 in limited numbers in Australia, Fuso offers E-Canter in limited numbers, Maxus have revealed an eDeliver 9 (Maxus is SAIC’s global brand name for LDV) which is already on sale overseas, Mercedes-Benz will introduce electric Vito and Sprinter in 2022.
There are a large number of new entrants circling. GM launched Bright Drop, with a huge initial order from FedEx, Rivian got an order of 100,000 vans from Amazon (who also own about 20% of the company) and ELMS, Canoo and Arrival are all recent American start-ups looking at delivery vehicles, light duty trucks and vans. The latter two are looking at production via micro-factories. Maybe NZ will start assembling vehicles again!
Expect to see tightening of the FBT rules for utes, the impact of the ‘Clean Car Standard’ to take effect on LCV and vans sales, and a lower tolerance by corporates for ICE vans. 2022 will be the year that van electrification takes off, and with the first dip in ute sales for years.
7. Segments And Definitions Blur Even More
We’ve already seen the rise of the SUV. Once defined by AWD and a ladder chassis, now they are simply higher riding cars, and usually 2WD. Next came coupe SUVs. Next is the blurring of lines between kick scooters, ebikes and cargo bikes and vans. Under the old world order there was simply bicycle, motorbike, car and van. Electrification has created overlapping segments, where an ebike overlaps with a moped and a cargo van for local delivery. This is important to understand if you are a commercial vehicle operator, a lease company, a dealer or a finance company. Your next item ordered via Amazon is unlikely to be solely delivered via a diesel powered Hiace. Our largest cities will have local delivery hubs, that enable the last mile delivery to be undertaken by vehicle classes that we might not be able to neatly pigeon hole in today’s automotive boxes. Micromobility devices—including, scooters, ebikes, three-wheelers, and everything in-between—have emerged as the world’s most popular EVs, eclipsing cars. Expect to see ecargo bikes operating for home deliveries at scale in our larger cities from some of the more pioneering grocery and home delivery companies.
8. Electric Motorcycle Expansion
Electric motorbikes availability in New Zealand is quite tight. The market leader is UBCO who have found favour with farmers for their quiet operation and two wheel drive as well as Dominos where they have a subscription model operating. In second place is NIU, who also have a kiwi connection. NIU offer a wide range of scooters globally including one specially made for deliveries. While range might be a limiting factor, both of these brands have swappable batteries, which removes the range obstacle in most applications. Expect to see more entrants in this space this year. Scooters have an important role to play in local deliveries, as well as multi-model commuting, so don’t write these off as just personal transport.
Don’t forget to check back next week for part two. Number 19 is THE BIG ONE you don’t want to miss.