Is there any benefit to owning an electric car?

In many countries in the west, the price of oil and gas has dropped substantially. So much so that some people have questioned whether electric cars are really all they are cracked up to be, especially due to the cost of some of the machines. That being said, there has been exciting news around electric cars introduced in the past few months, including the long awaited introduction of the stunning and super speedy Tesla X, the announcement that Volvo will start producing electric cars for release in 2019, and the impending release of the sporty Song Hybrid Electric SUV from Shenzhen-based BYD. Beyond that, Tesla owners have recently seen a feature called Autopilot turned on, which we think is possibly one of the coolest things pretty much ever.  

What we are trying to say here is that the electric car market is really starting to find its stride and can offer some great benefits to car owners in Hong Kong. Here are 4 of the most interesting.

Electric cars have no direct emissions

The last few weeks of September and first few of October of this year, 2015, saw pollution return to the city in a big way with what felt like a near permanent haze settling over the city - causing potential health problems or worse. While much of this pollution is not generated here in Hong Kong, the increasing number of vehicles on the road (the first eight months of 2015 saw around 25,000 new private cars registered, according to stats from the Transportation Department) has certainly had an impact on air pollution in the city.

Plug-in electric vehicles (vehicles that are fully electric) have no internal combustion engine, which results in zero tailpipe emissions. This means that the cars themselves do not emit the harmful gases that internal combustion engines do. Of course, there are emissions tied with these vehicles, as you need to plug-in the vehicles to charge them off the power grid.

Looking at emission figures from the US however, an all electric vehicle's GreenHouse Gas emission on a 100 mile (160 km) trip is around 54 lbs (25.5 kg) of CO2, almost half of a normal car's. This makes pure electric, and to a slightly lesser extent, hybrid vehicles much better for the environment.

Electric cars are becoming increasingly energy efficient

As battery technology becomes ever more efficient, we are starting to see the range of electric cars increase. For example, the 2016 Nissan Leaf has an advertised range of 172 km while the 2015 had a range of 135 km - an increase of around 22% in just one year. It is rumored that Nissan is working on a new battery platform that could see future range rival that of traditional cars. This increased efficiency means less time spent charging and, therefore, less emissions generated.

It's not just range that is becoming more efficient however, as the actual fuel efficiency is also much higher than internal combustion engines found in traditional cars. According to the US Department of Energy, "Electric vehicles convert about 59%–62% of the electrical energy from the grid to power at the wheels—conventional gasoline vehicles only convert about 17%–21% of the energy stored in gasoline to power at the wheels."  This difference of 40% in overall efficiency is large, and as electric cars continue to improve it is bound to increase even further.

What this means for the driver is better power consumption while driving, longer range, and even quicker charging times. In other words, you will be able to do more with less.   

The Hong Kong government and companies are supporting electric cars in a big way

The Hong Kong government, more specifically the Environmental Protection Department (EPD) have a number of initiatives in place to encourage and support electric vehicles. For instance the first vehicle registration tax will be waived until 2017 for electric vehicles and, according to the EPD, " enterprises which procure EVs are allowed 100% profits tax deduction for the capital expenditure on EVs in the first year of procurement."

The EPD also notes that there are more than 1,200 electric vehicle chargers in and around Hong Kong, with more planned. These stations can be used by all members of the public, allowing electric car owners to charge their cars - kind of like the gas station of the future.

Electric car manufacturers are also beginning to increase their support of owners in the city. For example, as of July Tesla has 8 supercharger stations with 36 stalls in Hong Kong, which means the city has the highest density of chargers in the world.

This has resulted in a friendly environment for electric cars.      

Electric cars are becoming increasingly affordable

The biggest detractor of an electric car is that the sticker price of these vehicles is high. For example, articles published in 2014 and 2015 highlight that the the price of a Tesla model S has dropped from HKD 579,000 to HKD 529,000. Yes, this is still costly, but as battery technology increases, we should see prices fall for all electric vehicles.

It's not just sticker price, however, that dictates how affordable these cars are, or how affordable they will become. Many experts look at cost per kilowatt hour as a measurement of affordability. In an article published in the MIT Technology Review it was found that, "The battery packs used by market-leading EV manufacturers like Tesla and Nissan cost as little as $300 per kilowatt-hour of energy in 2014." This means that per kilowatt-hour of battery capacity, it costs USD 300 to produce the battery to hold that capacity. While high, the article notes that, "Batteries appear on track to reach $230 per kilowatt-hour by 2018".

What this will relate to is cheaper cars. In theory, a reduction of battery and other production costs by half could see car retail prices fall by nearly that much as well. In turn this means not only higher affordability, but also more electric cars entering the market at lower price points.

What about insurance?

The way insurance companies cover electric vehicles in Hong Kong is interesting, and we will be covering this in a future article. In the meantime, if you are considering purchasing an electric car, contact the experts at Kwiksure for a quote.    

 

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