EV vs petrol costs
A reader e-mailed the Minister of Transport (and me) the following:
7.6c per kilometre (plus a processing fee) as Road User Charges for electric vehicles was not a clever idea.
Why? Simple answer; an EV now pays a lot more in Road User Charges than a petrol vehicle.
It is not unusual for a petrol vehicle to do 50 miles per gallon, even my 1998 Honda Logo does this on a run.
50 mpg is 17.6 kilometres per litre.
As far as I know petrol tax is 70c per litre. Therefore a reasonably efficient petrol engined car will pay 4c a kilometre in Road User Charges.
In fact, 7.6c per k is the equivalent of 26 miles per gallon, or 9 litres per 100 kilometres. Therefore, any petrol engined vehicle that uses less than 9 litres per 100 kilometres is paying less towards the upkeep of the roads than an EV.
The potential situation for plug in hybrids is even worse.
Looking at it the other way. With petrol at $2.40 per litre, a 50mpg car will pay 13.6c per kilometre for fuel.
If an EV does 6k per kWhr and electricity is 30c per kWhr, an EV will pay 12.6c per kilometre. (Fuel cost plus RUC)
What incentive is there for people to convert to an EV?
Particularly as on a long run with electricity at 85c per kWhr (rapid charger rate), the overall rate per k is now 21.8c for an EV.
Paying 50% more to use the roads on a long run, for the privilege (in an EV) of it also being slower (charge up time) and colder (a heater uses a lot of power), is hardly much of an incentive.
It is abundantly clear that the Road User Charge rate for an EV is grossly excessive. It should be more like 4c a km.
I did say you were idiots for imposing a 7.6km RUC rate for EVs, I won’t resile from that statement.
As someone who drives an EV and looked at costs before purchasing, this didn’t seem quite right to me. So I calculated the following:
Just so you know the current petrol tax (including ETS) is around 125c a litre. Also 18 kms per litre seems very optimistic. 14 is what NZTA uses.
So a typical car will will do cost $1.25/14 or 8.9 c a litre, which is more than 7.6 for EVs.
At the current price of $2.55 a litre a typical car will pay 18.2c per km for fuel.
The cost of electricity per KWhr (once line charges are excluded) is 21c according to MBIE so an EV will pay 21c/6 or 3.5c/km plus 7.6 RUCs which is 11.1 c per km which is still well under the 18.2 for a petrol car.
So what does a 7.1c a km saving come to on an annual basis? On average we drive 14,000 kms a year so annual savings of $994 a year. Whether an EC makes sense will depend on the price compared to a similar petrol vehicle, available kms travelled and also likely savings from servicing costs due to no internal combustion engine.