Electrical vehicles: Trends and opportunities
McKinsey states that global electric vehicle sales passed the 1 million mark in 2017, and look set to hit 4.5 million by 2020. There's no denying the industry is growing. Combine increasing sales with the global focus on climate change right now, it's never been a better time to find out if your business could benefit from electric vehicles.
What trends has Australia seen in electric vehicle use?
So far electric only represents around 1% of Australia's vehicle use so it's hardly been a game changer to date. Other countries are way ahead, such as Norway where around half of new vehicles purchased are electric. According to the previously mentioned McKinsey report, the Scandinavian country is aiming to have all vehicles electric by 2025.
One of the major prohibiting factors across the globe is cost - especially of developing new battery technology that supports long journeys without lengthy charging. Naturally, in a country the size of Australia, this is a huge concern given the distances many businesses are required to cover.
However, costs are steadily dropping which should open up electric vehicles to a wider portion of the market. The Australian Government's ARENA (Australian Renewable Energy Agency) reports that electric vehicles are expected to match petrol vehicles both in terms of purchase price and journey range by the mid-2020s.
Despite the initial purchase cost, there are plenty of Australian success stories already.
Examples of electric vehicle use in Australia
Sydney's bus network - Transit Systems are running a trial on four of Sydney's bus routes. They aim to establish how electric vehicles perform and measure the cost benefits alongside the impact of cleaner emissions and quieter services. The buses generate around a third of their power through braking, and drivers are receiving training around how to make best use of this power regeneration method.
Zero emissions taxi services - Sydneysiders have access to taxi firms that operate electric vehicles. Both Evoke and Revel are using Tesla vehicles and as a result are making journeys with zero emissions. Both companies call their offering a luxury chauffeur service and cater to the corporate market as well as events.
Meanwhile, in Perth, Swan Taxis have branched into the electric vehicle market in 2019. They're currently trialling two electric cars to assess long-term viability. Range and 24-hour availability is the main concern around moving the entire fleet to electric, as well a cost-efficient charging infrastructure.
ACE VE and Aldom - In terms of production, ACE VE and Aldom are planning to start manufacturing electric cars in Adelaide in 2020. They're actually starting with 100 vehicles this year and moving to full scale production in the first quarter of next. They aim to produce up to 15,000 vehicles a year by 2025, and export around 80%.
The organisations say they have chosen South Australia because of the way it is embracing the new technology. Adelaide City Council has already invested in 42 charging stations around the city, citing a huge increase in electric vehicle sales as its reason.
SEA Electric and SuperiorPak - Focusing on a slightly different way of making Australia more eco-friendly, SEA Electric and SuperiorPak have collaborated to turn garbage trucks and vans into electric vehicles. Many are already in operation, with Australia Post and the Salvos running trials.
The Salvos say the range is not an issue because they do regular but relatively short trips, allowing the vehicles to charge between outings.
What are the opportunities for business owners not yet using electric vehicles?
Businesses who have already adopted electric vehicles are reporting cost savings. While electric cars are more expensive to buy right now, they do lead to savings in terms of fuel and maintenance. With prices expected to match petrol cars within the next decade, businesses could soon be looking at no-brainer cost savings.
Up until now, Australian businesses have been limited in their use of electric vehicles by the sheer distance they often cover. Locally operating businesses have been able to use electric vehicles, potentially without frequent charging, but long haul transport companies haven't stood a chance to date.
Again, with improvements on the horizon, it looks like range and the number of charging stations could be on the rise, making it a more viable option for Australian businesses.
Naturally, with the current focus on climate change, being able to advertise use of electric vehicles helps with a company's marketing strategy too. One of ARENA's areas of focus is on ensuring electric vehicles make use of clean energy by coordinating how they are charged.
How to invest in electric vehicles with alternative financing arrangements
At Classic Funding Group we offer specialist vehicle financing options aimed specifically at Australia's SMEs. We have options that allow you to finance your investment without huge deposits or real estate security and make repayments over time.
We also offer finance for a wide range of other clean energy assets, such as efficient lighting, wind turbines and solar panels.