ESSENTIAL GUIDE TO ELECTRIC VEHICLES

Transcription

1 ESSENTIAL GUIDE TO ELECTRIC VEHICLES A look at whether electric vehicles are a viable option for the long-term future of transport and whether they are as green as we think A Leasedrive Essential Guide

2 Contents Page Electric vehicles future imperfect...1 The electric vehicle landscape...1 Electric vehicle demand...2 Electric vehicle charging points/drop-in centres...2 Electric/hybrid vehicles dirty little secrets...3 Electric vehicle future...4 Leasedrive Group...5

3 Page 1 Electric vehicles future imperfect As car manufacturers around the world rush to develop electric and hybrid vehicles against a backdrop of tightening environmental regulations and growing consumer demand, it might appear that the future for the electric or hybrid vehicle is all rosy. Far from it, many question marks remain on the long-term viability of electric vehicles in particular, in part fuelled by the lack of a nationwide recharging infrastructure, debate over the sale or lease of battery packs and a small matter of electric cars dirty little secrets! Hopefully, most of these will be resolved but ask most vehicle manufacturers about the long-term future and they will answer that it lies with hydrogen-fuel cell vehicles. And then there is the small question of the internal combustion engine whose demise is far from certain, as ever increasing efficiencies are extracted from this power plant. The electric vehicle landscape Heralding a new green era, the Nissan Leaf won the 2011 European Car of The Year Award the first full electric car to do so! Undoubtedly, this accolade, for a car which by all accounts has the performance and handling to equal its petrol or diesel-powered equivalents, will help to jump-start the electric vehicle movement! It has a top speed of 90mph and a range of 100 miles. Indeed a whole host of new electric cars Hybrid Electric Vehicle (HEV), Plug-in Hybrid Electric Vehicle (PHEV) and full Electric Vehicle (EV) will be making their debut in Already nine electric and hybrid cars have been named as eligible for the Government s 43m plug-in car grant in the UK, which came into effect on 1 January 2011, entitling owners up to 5,000 when buying any qualifying low carbon car with CO2 exhaust emissions below 75g/km. The nine cars are the Citroën Czero; the Mitsubishi i-miev; the Smart Fortwo electric drive; the Peugeot Ion; the Nissan Leaf and the Tata Vista, both available since March 2011; plus the Chevrolet Volt; the Toyota Prius Plug-in Hybrid; and the Vauxhall Ampera, all available early next year. All major vehicle manufacturers are trialling electric vehicles and are at various stages in the development cycle. VW has boldly declared its intention to dominate the electric car market by 2018 but one manufacturer has been more vocal than most. Renault believes its next-generation electric vehicle range will appeal to 30 per cent of the buying public, with the opportunity for 30-minute fast charges (versus four to eight-hour home charges) and five-minute battery exchanges widening the range and appeal of such vehicles. Renault predicts that by 2020 between 15 and 20 per cent of cars could be electric. Renault aims to lease batteries due to their high initial cost an electric car without a battery would cost the same as its diesel powered equivalent. Advantages of this approach would be that Renault would cover any warranty issues and battery residual loss while customers could take advantage of the latest battery technology, which is gathering pace all the time. However, CAP has thrown a spanner in the works by refusing to publish RVs on this basis and Renault is likely to modify its strategy and offer a variety of alternatives: full outright purchase, full vehicle leasing, or vehicle purchase/lease plus battery lease its favoured option. The vehicle manufacturer is launching its first electric vehicle in the UK, the Kangoo ZE van, with deliveries anticipated in October Priced at 16,990, excluding VAT, it benefits from a 100 per cent capital writingdown allowance. Following Renault s favoured approach, the battery will be leased separately at a cost of 59 per month excluding VAT, based on a four-year/9,000 miles per year contract. Reinforcing the high cost of an electric vehicle, complete with battery, is the fact that the 2011 European Car of The Year, the Nissan Leaf, costs 25,990 even with the 5,000 subsidy! According to Bosch the cost of batteries will be between 7,000 and 10,000 by Large scale production and pooling of resources could reduce this by two-thirds and create a battery life of 12 years or 150,000 miles. And according to Lux Research, a consulting firm specialising in emerging technologies,

4 Page 2 the electric-car battery market is projected to grow six-fold by About 70 percent of it will be lithiumion batteries. However, the costs and limits of current batteries remain the biggest obstacles to mass marketing plug-in vehicles. Latest news on the manufacturer front is that BMW and Peugeot have announced a joint venture, BMW Peugeot Citroen Electrification, to create a European-wide platform for electric technologies. Starting in the second quarter of 2011, it will develop battery packs, charges, e-machines, generators, and software and aims to produce hybrid components for the respective company s vehicles by The technologies may also be sold to other manufacturers. Electric vehicle demand According to a late 2009 survey by the RAC Foundation, a fifth of the UK s 34 million drivers would consider or are planning to buy an electric car before This followed the announcement by government of the afore-mentioned availability of grants of up to 5,000 to purchasers of electric-powered vehicles from However, even by the government s own calculations, electric vehicles will not be available as mass market alternatives until 2017 at the earliest. The Committee for Climate Change in its 2009 report stated that 240,000 electric cars and plug-in hybrids will be needed on the roads by 2015, and 1.7 million by per cent of all new cars sold in that year if carbon reduction targets are to be met. More recently, a 2011 survey of over 5,000 drivers by GfK Automotive found that 1.8 per cent would definitely buy an electric car by 2014, which would result in the sale of more than 300,000 electric cars if extrapolated across the nation. Furthermore, another three per cent said they would consider an electric vehicle in the future once the issues of battery range had been resolved. That would add another 500,000 electric cars to the UK vehicle parc. This survey is backed by Bosch that estimates some 500,000 electric vehicles will be sold by More optimistically still, the latest survey by Glass s in January 2011 revealed that the number of drivers considering buying a plug-in hybrid or battery electric car as their next vehicle had risen from nine per cent to 53 per cent. This was a five-fold increase over the previous six months. Leading company car tax expert Deloitte Car Consulting is convinced that electric vehicles will soon become a common sight on fleets as employers and employees become early adopters of electric vehicles due to the associated tax benefits and the positive impact electric vehicles will have on corporate social responsibility. Since April 2010, company car drivers who opt for the electric option receive a five-year break from Benefit-In- Kind (BIK). Even van drivers are being given a five-year holiday for going electric, plus a 100 per cent writing down allowance for the first year as referred to earlier. Electric vehicle charging points/drop-in centres Widespread adoption of electric cars and vans will depend on a viable public re-charging point infrastructure. In the UK, the Energy Technologies Institute (ETI) announced that a number of major UK cities are to gain charging points for electric and hybrid fuelled vehicles under an 11m development plan. ETI stated that the Joined-Cities Plan will initially set up charging points in a total of nine UK cities comprising Birmingham, Coventry, Glasgow, London, Middlesbrough, Milton Keynes, Newcastle, Oxford and Sunderland. In London alone the aim is to have 25,000 charging points in the Capital by the end of In November 2009 the government announced the Plugged-In Places initiative funding charging points in streets, car parks, commercial, and retail and leisure facilities to the tune of 30m in three to six UK regions before a nationwide roll-out.

5 Page 3 As part of the Plugged-In Places initiative, in early 2011, the first domestic electric vehicle charging points had been installed in homes in the North East. The first 55 of 1,300 points were fitted with regional development agency One North East aiming to complete by The dedicated charging points undertake safety checks before charging begins and plugging-in or unplugging an electric vehicle is a fivesecond job. Meanwhile, manufacturers such as Nissan and Renault are planning nationwide fast-drop battery centres by 2012 for their next-generation electric vehicles, where drivers will exchange batteries on their nextgeneration vehicles, the batteries being leased rather than bought outright. The battery exchange would take five minutes. Electric/hybrid vehicles dirty little secrets Electric and hybrid vehicles, like any other vehicle, need to be produced, which not only uses up energy but also draws on some pretty rare materials. Lanthanum, a rare earth element (REE), is used in the production of hybrid vehicle batteries. Another, Neodymium, makes the lightest and strongest magnets used in the electric motors of hybrid vehicles. While REEs are found in some of the most inhospitable areas, close to the Earth s surface, mining them presents considerable environmental risk. The ores in which they are found contain radioactive elements such as radium, thorium and uranium. And to refine REES, requires the use of toxic acids which leave a nasty waste sludge behind. It is no wonder REEs are now described as clean energy s dirty little secret! Once on the road, the pollution from electric and hybrid vehicles does not stop there as they currently have to be charged up every 125 miles or so for up to eight hours overnight. That requires electricity, often provided by dirty coal-burning power stations, not exactly the most environmentally friendly solution. In the UK, a driver of an electric vehicle in Nottinghamshire would be charging his or her vehicle from electricity supplied by the Ratcliffe-on-Soar coal-fired power station opened in It has eight cooling towers and 199m tall chimney dominating the flat lands around it. The power station has a total generating capacity of 2,000 MW, enough to meet the electricity needs of around two million people. The plant emits between eight and ten million tonnes of CO2 annually, making it the 18th highest CO2 polluting power station in Europe. While it meets the EU Large Combustion Plant Directive on reducing acidification, ground level ozone and particulates by controlling its emissions of dust, nitrogen oxides and sulphur dioxide, it patently is not a clean source of energy. By contrast the driver of an electric vehicle in Suffolk would be charging their vehicle from electricity supplied by the Sizewell B single pressurised water reactor, the UK s newest nuclear power station commissioned in It has an electrical output of 1,195 MW, depending on seawater temperature. It operates on an 18-month cycle followed by a month s shutdown for maintenance and refuelling. Combined with a planned 1,600 MW reactor called Sizewell C and further units at Hinkley Point, these would contribute 13 per cent of the UK s electricity by the early 2020s. Nuclear power plants have a minimum of four waste streams that contaminate land plutonium waste (around 20 to 30 tons of high level waste per month, much of it reprocessed), tailings at uranium mines, small amounts of radioactive isotopes and widespread pollution following accidents. Various studies have shown increased risk from cancers among people living near nuclear power stations. In 2007, 17 research papers published in the European Journal of Cancer Care revealed elevated leukemia rates among children. Electricity supply to re-charge electric vehicles still therefore comes at an environmental price, and sometimes at a human price too. And it should not be forgotten that currently the driver of an electric vehicle travelling between London and Manchester would need to stop to recharge once, just over halfway through their journey!

6 Page 4 To cap it all, not all electric or hybrid vehicles are as efficient as they are claimed to be. The hybrid Chevrolet Volt already available in the USA is said by GM to deliver 50 mpg when powered by fuel but owners are covering just 38 miles on a gallon. GM s response was that it would be 10 to 15 per cent worse if it were not sometimes petrol driven! Electric vehicle future Electric cars and vans in their various guises will enter the vehicle mainstream over the course of the current decade. However, their future success will depend largely on the establishment of a proper re-charging network infrastructure, more acceptable ranges between battery recharges and lower lithium-ion battery costs. How much in-road electric vehicles will make into a market dominated by the internal combustion engine will also depend on how prices converge with the latter, post initial subsidies, and escalating oil prices. A major study in Australia, predicted a transition to Hybrid Electric Vehicles (HEVs) in the short term (5-10 years), Plug-in Hybrid Electric Vehicles (PHEVs) over the medium term (5-20 years) and full Electric Vehicles (EVs) over the longer term (20 years plus). This would appear to be a logical step-change in electric vehicle evolution. In the event of a failure to establish a proper nationwide re-charging infrastructure, potential electricity supply constraints and sub-300 mile ranges, electric vehicle popularity will be confined to large towns and cities. For those living in rural areas or frequently travelling long distances, electric vehicles are likely to be a non-starter. Honda considers hybrid vehicles the best short to medium-term solution with hydrogen fuel cell technology the best long-term solution. The Japanese manufacturer believes hydrogen fuel cell vehicles should become a practical alternative by Pending the arrival of mainstream hydrogen fuel cell vehicles, themselves equally dependent on a nationwide recharging structure for their future success, hybrid vehicles will be the only viable green alternative to the internal combustion engine, whose own future is far from dead. Expect even smaller capacity, turbo-charged units from vehicle manufacturers to become the norm in the years ahead. So electric vehicles, and more particularly hybrid vehicles, will have their day in the sun as they are cleaner, but it should be remembered they are not as green as they are frequently portrayed to be. In the medium-term, the fleet mix will reflect a combination of the internal combustion engine, hybrid electric vehicles and plug-in hybrid electric vehicles in that order. In the long-term, the mix will become even more varied with the addition of hydrogen fuel cell vehicles and perhaps new technology yet to be revealed. Only a crisis involving oil-producing nations is likely to accelerate those timeframes.

7 Page 5 Leasedrive Group Leasedrive is the largest independent privately-owned vehicle management group in the UK and comprises two main operating divisions: Leasedrive Working in partnership with fleet managers, or delivering a complete outsourced service, Leasedrive offers blue chip clients an extensive range of multi-award winning bespoke fleet management services. Major investments in the finest asset management system and pioneering, flexible, web-based customer service technology ensures Leasedrive can reduce its client s costs, minimise their carbon footprint, improve their duty of care and enhance the overall efficiency of managing their vehicle fleet and associated costs. Leasedrive Rental Management One of the largest short-term vehicle rental management companies in the UK, with access to an almost unlimited choice of vehicles and locations throughout the country, Leasedrive Rental Management offers a simple and transparent pricing policy with no hidden surcharges. For rentals of 28 days or more, it offers the Stopgap mid-term vehicle rental solution. Rates are substantially reduced compared to daily rental. Leasedrive is the winner of the 2006 Fleet News Award for Best Contract Hire/Fleet Management Company, the 2006 GreenFleet Award for Leasing/Rental Company of the Year, the 2006, 2007 and 2008 Thames Valley Business Awards for Business Management Team of the Year, the 2007 ITM Award for Independent Vehicle Management Company, the 2008 ITM Award for Fleet Management Company, the 2009 Energy Saving Trust Fleet Hero Award for Innovation in Services and Systems, the 2009 and 2010 BusinessCar Techies Award for Best Daily Rental Website and the 2011 Thames Valley & Solent Deals Award for Management Team of the Year. For further information about Leasedrive or advice regarding your company s vehicle fleet, please contact: Wokingham Office Crowthorne House Nine Mile Ride Wokingham Berkshire RG40 3GA Birmingham Office International House Bickenhill Lane Birmingham West Midlands B37 7HQ Tel: +44 (0) Tel: +44 (0) Fax: +44 (0) Fax: +44 (0) info@leasedrive.com Web: 2011 Leasedrive Group. All rights reserved. Leasedrive has taken all reasonable measures to ensure that the material contained in this Essential Guide is correct at the time of issue (10/05/2011). However, the views and opinions contained in this document should not be relied upon as fact, legal opinion or consulting advice. Leasedrive shall not be liable for any loss or damage whatsoever arising as a result of any person acting on or refraining from acting in reliance on any information contained therein. Readers are advised to seek independent advice before making any decisions. E&OE. REV100511

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