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Roadblocks for Government fleet’s electric shift

The Government wants its massive fleet of vehicles to be electric by 2025, but public service bosses aren’t keen to make the switch until the cost comes down. Shane Cowlishaw reports.

Plans for the Government to lead by example and replace its gas-guzzling vehicles with clean, green options are facing serious roadblocks.

Just before the election, the previous National-led Government announced a target of electrifying the Government fleet by 2021.

Following the change of power, the coalition agreement between Labour and New Zealand First included a goal to turn the fleet of more than 25,000 cars, vans and buses emissions-free by 2025/26.

The promise has a caveat though - “where practicable” - and it seems likely that will be trotted out unless serious legislative changes are made.

A briefing prepared by the Energy Efficiency and Conservation Authority for Energy Minister Megan Woods illustrates how difficult it will be to meet the Government’s 2025 commitment.

Government organisations are reluctant to commit to electric vehicles (EVs) for one main reason - the high price of the cars and charging infrastructure.

“Even with cheaper running costs, the investment is presently hard to justify for most EVs in the market.”

A total of 351 public organisations buy their vehicles through a contract administered by the Ministry of Business, Innovation and Employment (MBIE), which is able to get a significant discount through economies of scale.

About 4000 vehicles are purchased each year, with about 40 percent in a class where EVs are available.

But to date, only 226 EVs are registered to Government organisations.

The briefing noted there would be “significant difficulty” in transitioning to EVs as they cost more to buy, partly due to the limited variety available.

EVs are particularly expensive in New Zealand, with Europe’s top-selling model, the Renault Zoe, costing an extra $20,000 to $30,000 here.

It could also be hugely expensive for organisations with large numbers of cars to install the charging infrastructure, which could require upgrades to equipment such as network transformers and cost between $10,000-15,000 per EV.

To top it off, most EVs are offered by premium manufacturers including Audi and BMW, cars the public service was not keen to be seen driving around in.

A reluctance to adopt the technology was illustrated by the failure of a joint public-private sector pilot last year to try and encourage the purchase of EVs.

Using MBIE’s procurement system, seven Government organisations and 10 private sector companies registered an intent to buy 86 EVs and pricing was secured for this amount.

But when it came time to order only eight companies followed through, with just 38 EVs ordered.

Alongside the high purchase costs, fears that the vehicles resale price could plummet were cited in the briefing.

“Public and private sector fleet managers are uncertain of EV resale values, which is an important component of fleet procurement and management. This uncertainty creates a financial risk which weakens the business case for adopting EVs.”

A tricky problem to solve

Outside the Government fleet, the number of private EVs is rising.

There are now 8696 EVs registered in New Zealand, more than double the amount from this time last year.

But with more than 4,000,000 comparable petrol vehicles in the country as well, there’s a long way to go.

Professor Barry Barton of Waikato University said the high up-front costs weighed heavily on people’s minds.

“If you’re in a cash-strapped Counties-Manukau District Health Board you’re thinking 'how many operations do I have to cancel to meet this requirement?”

There was also a lack of models and support for the vehicles, which were definitely better for the environment but did not solve other problems such as congestion, he said.

Barton co-authored a report in 2015 that considered the barriers to EV uptake, recommending a “feebate” system that would slap a levy on every vehicle depending on its total emissions.

This would not only encourage EV uptake but also more efficient petrol models.

Regarding the Government fleet, Barry said he was unsurprised public sector bosses were not keen to be early adopters.

“If you’re in a cash-strapped Counties-Manukau District Health Board you’re thinking 'how many operations do I have to cancel to meet this requirement?”

Within the Government, ministerial responsibility for EVs is confusingly spread across four portfolios.

Alongside Woods, there’s Economic Development Minister David Parker who has taken the lead on the Government fleet while Associate Transport Minister Julie-Anne Genter handles the public uptake of EVs.

There’s also Chris Hipkins, who as Ministerial Services Minister has responsibility for the Crown VIP fleet.

Woods declined an interview request, referring comment on Government procurement to Parker. She said there were no plans to introduce additional rebates or subsidies to make EVs more attractive to consumers.

Parker is overseas, but a spokesman from his office said uptake of EVs within the Government was expected to increase as the range of vehicles expanded and infrastructure improves.

Crown limos to stay diesel - for now

The fleet of 32 diesel-powered Crown BMWs that ferry ministers around won’t be turning electric for a while.

Last year a six-month trial of a BMW plug-in replacement found that while the vehicle was a viable option to integrate into the Crown fleet, it wouldn’t work as a complete replacement.

But a separate briefing to Hipkins revealed the trial, which took place across the country, resulted in the hybrid BMW failing to impress enough to be considered as a replacement for the diesel version.

The main problem was a lack of range, although strangely the diesel version was more fuel efficient than the hybrid when tested and more cost efficient to run.

South Island-based chauffeurs ran into problems finding correct charging stations for the BMW, describing it as unpractical and slow to charge. Wellington chauffeurs had similar criticisms, pointing out it could not even make a Ngauranga Gorge/airport return trip on a full charge.

The current lease agreement with BMW comes to an end in October next year.

Amanda Duncan, media advisor at the Department of Internal Affairs, said the current contract with BMW expired in October 2019 and the hybrid vehicle did not meet all the “commercial and vehicle-based” requirements of the contract.

Those requirements would be reviewed when a new tender was issued for the current fleet’s replacement later this year.

Alongside the limousines, the VIP fleet includes an extra 77 vehicles with almost a third being fully electric or hybrid vehicles, she said.