Cost-efficient and eco-friendly to run – and increasingly affordable to buy – an electric car could be a sensible choice for your next company vehicle.
With Australians purchasing just 2216 electric cars in 2018 compared to more than two million globally, it’s safe to say we’ve been slow to embrace electric mobility – thanks in large part to high purchase costs, limited model choice and lack of government incentives.
But 2019/20 marks a turning point in the local industry, as model choice expands from 22 all-electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) to 31 by the end of 2020.
The price gap between electric and internal combustion engine (ICE) vehicles is shrinking too, with parity expected by the mid-2020s. Right now, the cheapest pure electric car available in Australia, Hyundai’s Ioniq Electric, is priced from A$44,990 before on-road costs.
Imminent launches from the likes of Volkswagen and MG might soon present even more affordable options.
As cost becomes less of a barrier, the appeal of electric cars escalates not just for personal use, but also for business purposes. Here are some of the reasons electric vehicles could be the ideal addition to your company fleet.
Low running costs
One of the key drawcards of electric cars is their running costs, which are significantly lower than ICE vehicles.
According to the Electric Vehicle Council, the average Australian drives 15,000km and spends around A$2160 on petrol per year ($0.14/km). By comparison, an electric car travelling the same distance would cost around A$600 per year ($0.04/km) to recharge.
Maintenance costs are lower too, because electric cars don’t have items like spark plugs, engine oil and filters that need to be changed. Battery degradation isn’t a concern either, with most manufacturers offering at least eight to 10 years’ warranty, and some for the life of the car, says Mark Harland, EV strategy and partnership lead at AGL Energy (check out AGL’s EV plan).
“Battery prices will continue to decrease; range and lifespan will increase,” he explains.
“Elon Musk recently announced that the new Tesla batteries will last one million miles. Currently, EV batteries show very little loss of range per year. Once an EV is scrapped after about 500,000 kilometres, if the body and interior are no longer fit for purpose, the battery can be re-used in a second life – for example, for air-conditioning.”
Recharging is easy
With extensive terrain to navigate, many Australians suffer from “range anxiety”; that is, fear that an electric car won’t get them to their destination without running out of charge.
It’s a mostly unwarranted concern. The average daily commute in Australia is only 40km and, with today’s electric cars equipped with an average battery range of 480km, they can last at least 10 days without recharging.
However, for drivers wishing to replenish their battery each night, Harland explains that a simple seven-kilowatt AC charger installed at home should take about an hour to complete the task.
Though most drivers prefer to recharge at home every night, there is also a growing network of electric car charging stations.
“The infrastructure is being built quite quickly, outpacing EV sales,” says Harland, who explains that companies like Evie, Chargefox and Tesla are building new EV charging capabilities along the main highways every week.
“The new DC fast charger standard is 350 kilowatts, which translates to between 25 and 50 kilometres of charge per minute,” he adds.
Good for business
Unlike much of Europe, North America and China, there are currently no major government incentives in Australia to encourage electric car uptake, though a national strategy is slated for mid-2020.
In the meantime, the Victorian, Queensland and Australian Capital Territory governments offer various savings in the form of reduced stamp duty and Luxury Car Tax.
Nonetheless, businesses with electric cars benefit from a sustainability perspective, and reducing greenhouse gas emissions, with some cars even supplying electricity back to the grid.
As Harland explains: “Businesses that install solar with chargers can soak up the midday sun to charge their fleet and/or to help offset loads/costs during peak demand.”
AGL has business energy offers for CPA Australia members that can be found here or call 1300 001 540 and quote “CPA”.