August’s passenger vehicle statistics show that pure EVs accounted for 23% of new vehicle sales, and electrically assisted vehicle sales were 44% of the market. To fully understand the rate of change and shifting consumer demands one only had to look at the data for August 2021, where the BEV share was 7.2% and electrically assisted was 26.3%.
This clearly illustrates the shift towards electric is continuing to gain momentum; consumers and businesses alike can see the advantages of lower polluting more efficient vehicles, and as more choice arrives, more consumers are convinced. Undoubtedly this wouldn’t have happened without government incentives, but government incentives are just one part of the puzzle; charging infrastructure, choice, key price points, range, and mindset are all component parts.
Given that government departments and socially responsible corporates tend to be among the early adopters, and that light commercial vehicles account for over 21% of our new vehicle registrations, it is surprising to see that stubborn refusal for the LCV market to adopt EVs. In August 2022 just 1% of all LCVs were electric, and conversely, 96% were still powered by diesel. There are no mild hybrids or PHEVs in this segment. This is virtually unchanged from the same time last year.
While some commentators believe that the first electric ute will make a huge impact, Boost Auto believes that the Clean Car Act will force users to consider whether a ute is a right product for the drivers of their business. In New Zealand, a number of vans are already Euro 6, whereas no utes are. Utes stubbornly remain Euro 5, even though Euro 6 variants exist in other markets. Even without electrification, vans are less polluting than utes, and few developed markets outside of Australia, the USA, and NZ have our same love affair with open-back cargo carriers.
However, while vans might be cleaner, Euro 6 vans are not the answer for the environment. The question is where are the MHEV, LHEV, and BEVs in commercial vehicles?
There are plenty of electric start-ups in the commercial vehicle space, Canoo, Arrival, Rivian, BightDrop, LEVC, Workhorse are fighting to achieve a foothold in the lucrative delivery vehicle market, as home delivery numbers explode. But failures like ELMS show that it is harder than one might think to break into the commercial BEV space. Few of the brands listed above have vans or any commercial vehicles available on the market right now.
Undoubtedly there will be some brands from China too. China’s managed economy has an enviable long-term focus that has positioned its manufacturers to be huge winners in the race for automotive manufacturing supremacy. They have had a joined-up approach to incentives, R&D, state support, and creating consumer demand that has created an electric-first automotive industry that will only get stronger. Currently, the only pure BEV vans available in New Zealand today are LDV, made by SAIC, the same parent company as MG, and LDV is promising the first electric ute too.
One of the oft-commented challenges for LCV is a range, yet the range is a function of battery size, load, and usage type.
In many markets, LCVs fall outside of the fuel economy testing regimes set for passenger vehicles. How does one test the economy of a panel van; should it be empty – a state that all operators would hope it is never in – or should the fuel economy test be undertaken when the van is loaded? Ranges for BEVs are based typically on unladed running, yet this is not how they are used. Therefore, modestly claimed ranges become even more modest with load and in service.
Perhaps a PHEV would make more sense. By offering a range extender option or having an internal combustion engine backup, the real-world range could be extended.
Battery swap technology could be another innovation suited to LCV. In China and now in Europe, NIO has pioneered battery swaps and has undertaken 10 million so far. In Taiwan, Gogoro now facilitates 500,000 battery swaps per month for scooters, and a number of battery manufacturers including CATL (the world’s largest manufacturer of batteries for vehicles) are investing in battery swap stations. In trucks, these can sit behind the cab or under trailers.
For context a NIO battery swap takes six minutes and is fully automated, a truck battery swap around the same time, and a Gogoro swap around 1 minute (and it is manual).
This then leaves Hydrogen. Generally thought to be the solution for line haul, a nationwide infrastructure programme would be needed (and it should be noted was needed for petrol and diesel). Of course, there are no hydrogen fuel cell vans or utes today, but Hyundai is leading the charge locally with trucks.
The above solutions assume a swap in the status quo, that is, replacing an ICE van with a BEV van, whereas the solution is likely to be more fragmented and nuanced. Businesses are increasingly likely to look towards solutions that increase efficiency and remove costs rather than simply replace vehicles. Electrification is powering micro-mobility.
By reducing the footprint of a vehicle, deliveries per hour jump. A study last year showed a cargo bike could make 10 deliveries per hour in a city center versus 6 per hour for a van. The cargo bike is significantly cheaper to run and therefore the cost per delivery falls dramatically too. In this case range, battery size, and payload is less important than physical size.
On a pre-pandemic overseas trip, we noticed UPS and Amazon trucks operating as a mobile hub and spoke operation for an army of cargo bikes. These bikes would deliver parcels further into the city center, where they are able to beat the traffic through the use of cycle lanes and easier parking. They even help free up traffic by removing vehicles from the road.
Perhaps the question is not where are the NEV commercial vehicles, but how do we embrace the innovations that already exist to lower our carbon footprint?
This article was first published in Autotalk in September 2022.
Photo by Kamil Kalkan on Unsplash
Boost Auto is an automotive consultancy working in seven main areas.
• Market Insights & Trends
• Sales Training
• Sales and Marketing effectiveness for brands and dealers
• Green fleet facilitation for large corporates
• Go To Market strategies for emerging brands
• Business Planning and facilitation
• Operational Effectiveness
You can contact us at hello@boostauto.co.nz
Note: The author is a director of Boost Auto Distributors, the NZ Authorised distributor for Horwin.
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