“Yes, my grandfather worked with Thomas Edison on the electric car, and he sold electric
cars at the 1900 World's Fair in Paris.” ~ Al Jardine, The Beach Boys
It turns out electric cars have been around for a long time.
The world’s first practical electric car was driven along a Paris Street in 1881 – the
Gustave Trouvé Tricycle.
The first production electric car was built in 1884 in London by English Inventor Thomas
Parker.
Actually, the first vehicle to break the 100km/h speed barrier was a Belgian electric car,
the Jamais Contente (pardon my French), driven by Belgian race car driver Camille Jenatzy
in 1899.
In the early 1900s in America, 40% of vehicles were steam-powered, 38% electric, and 22%
gasoline.
This is a picture of Thomas Edison posing in front of an electric car in 1913.
Actually, early American electric cars were somewhat stigmatised by the perception that
they were “women’s cars”.
They didn’t require the user to change gears, they didn’t have the smell, vibrations,
and noise of petrol-powered cars, and they didn’t require any effort to start (petrol-powered
cars at the time relied on a hand crank).
However, due to their slow speed, low range, lack of charging infrastructure, and their
expensive price tag, the electric vehicle lost the race for automobile dominance.
Thanks to the introduction of the mass production of the Ford Model T by Henry Ford, the price
of petrol-powered cars fell dramatically.
They were more reliable, could travel a lot further for cheaper, and cost only about half
as much as an electric vehicle at that time.
Petrol was king and consumer electric vehicles were lost in the annals of history — Until
recently that is.
In 2006, Tesla Motors unveiled the ultra-sporty Tesla Roadster having a decent range of almost
400km, but with the fairly hefty price tag of US$98,950.
It was never really going to reach a mass market, but it did pique people’s interest.
The Mitsubishi i-MiEV was released in Japan in 2009, obviously targeting a much different
audience, but at a price tag of $48,800 in Australia, it was still seen as being too
expensive for what you got and never really made a dent in the market.
One thing that history has taught us is that price matters.
If an electric vehicle is more expensive that it’s petrol counterpart, then sales will
be weak.
Anyway, enough of the history lesson.
Let’s jump forward to 2020.
American company Tesla are actually scheduled to roll out their very first Chinese-produced
car in Shanghai today (that is, 30 December 2019).
Obviously, the reason they’re producing cars in China is for the cheap labour and
production costs, plus the local tax incentives.
The Model 3, which will be built in the factory, will be priced from about US$50,000, so still
not quite at a price level that will make it a mass-market vehicle.
However, it was the best-selling electric vehicle in the US in 2019 by a long margin,
making up 63% of all electric vehicle sales.
But 2020 on the other hand, might just be the year when things start to really shine
for electric vehicles.
Tesla predict that they’ll be able to reduce the price of the Model 3 by about 20% in 2020
as it starts to use more locally-produced components and reduces its costs.
German automaker Volkswagen have announced that they’re accelerating their move into
electric cars.
They predict they will achieve their goal of 1 million electric cars per year two years
earlier than planned, that is, they plan to produce a million battery-powered cars in
2023 instead of 2025, and could potentially reach 1.5 million cars per year by the end
of 2025.
That’s a lot of electric cars flooding the market from a single company.
VW are planning to raise their production and increase the sales figures of their ID.3
model which should be priced at less than €30,000 (so about AU$48,000).
It’s said to have a range of up to 550 km, so that will certainly curtail everyone’s
range-anxiety fears.
For the first time, Volkswagen have offered pre-booking for the ID.3 with over 37,000
customers having reserved the car to date.
Production of the ID.3 began last month from VW’s massive Zwickau factory in Germany.
But still, in my opinion, the price tag of the ID.3 is a bit steep for a mass-market
vehicle.
I would suggest that it would have to come down substantially before Volkswagen can really
hit that 1-million-electric-cars-a-year figure.
A similar-sized VW Golf can be bought for about $25,000 in Australia, so who’s going
to pay double that for the ID.3?
It will take some massive market forces for ordinary people to start buying electric cars
instead of petrol ones.
I might be wrong though.
China, of course, are really going full steam ahead when it comes to electric vehicle production.
However, sales have fallen in recent months partly due to the Chinese government significantly
limiting their New Energy Vehicle incentives.
Australia isn’t doing much better with the Victorian and New South Wales governments
considering introducing a tax on electric vehicles.
Why?
Because electric vehicle owners won’t pay fuel excise as they won’t be using fuel.
Currently, that’s more than 41c per litre which brings in something like $12 billion
a year in revenue.
If you drive an electric vehicle, the Government misses out on the tax, so naturally, they
want to recoup their losses by charging you to drive.
Not exactly the best way to encourage people to use an electric car.
One idea that is being bandied about is for electric car owners to be slugged with a per-kilometre
charge.
That is, the more you drive, the more tax you will pay, not dissimilar to the current
fuel excise.
In theory, the tax is designed to pay for road maintenance and infrastructure, but in
reality, it gets diverted to the federal budget's consolidated revenue fund.
Anyway, what are your thoughts?
Will 2020 be the year that the electric vehicle market really takes off?
What will it take for the average consumer to make the switch?
Are the vehicles still too expensive?
Are governments compounding the issue by trying to get their grubby little hands in on everything?
Should we be rewarding electric vehicle owners, not taxing them?
Let me know your thoughts below.