New Zealand AA's Chief Mobility Officer makes the case for EVs and hybrids amid rising fuel costs
Chelsea Daniels interviews Jonathan Sergler of the AA New Zealand about EV and hybrid vehicles.
Summary
Chelsea Daniels of the New Zealand Herald's The Front Page podcast interviews Jonathan Sergler, AA Chief Mobility Officer, in response to listener pushback from a previous episode featuring a sceptical take on EVs. Sergler addresses concerns about Chinese EV brand longevity, arguing that companies like BYD have decades of history and that parts availability for newer brands is already comparable to established manufacturers. He walks through the new-versus-used car decision for EVs, noting that battery degradation is real but modest over high-mileage use cases, and that depreciation curves for EVs are broadly in line with internal combustion engine vehicles. He also discusses the hybrid-versus-full-EV question, the potential of vehicle-to-grid technology, and the growing affordability of EVs in the New Zealand market — with entry-level options now available around $30,000 new and used Nissan Leafs starting at just a few thousand dollars. Sergler also highlights a newly released AA trip-tracker app that lets drivers calculate and compare travel costs by vehicle type, illustrating it with an Auckland-to-Whangārei example showing roughly a $60 cost difference between a small EV and a large diesel SUV.
Key Takeaways
FULL TRANSCRIPT
Introduction and recent EV registration figures
Chelsea Daniels: It's safe to say our last episode on EVs amid the current fuel crisis sparked some lively debate. Our last guest's take on unreliable EVs and the possibility of brand collapses drew pretty strong pushback. So today, we're flipping the script with a fresh take to tackle your top concerns head on.
EV registrations are still surging alongside hybrids and plug-in hybrid electric vehicles. As of April 19, there were 5,346 EVs registered so far this year, compared to 2,493 at the same time last year. Plug-in hybrid electric vehicles are at an all-time high — up 79% — and hybrids are up 6.2%.
Today on The Front Page, AA Chief Mobility Officer Jonathan Sergler is with us to break down the fact and fiction around EVs. So what have you noticed lately about the increased interest in EVs and hybrids?
Jonathan Sergler: Well, plainly, with the worldwide events putting a real big spotlight on the cost of fuelling your vehicle, people are looking at alternatives. Whether that's EVs, plug-in hybrids, hybrids, public transport, walking, or cycling — everyone's looking at ways to try to reduce the cost of travelling. EVs have got a part to play in that, and we're definitely seeing a big push for people to learn more about EVs. Talking to some of the people that are bringing those vehicles into the country, they're seeing huge demand for the types of vehicles that are allowing people to move away from any current or potentially future oil price increases.
Responding to scepticism about Chinese EV brands and parts availability
Chelsea Daniels: Now, we interviewed someone about this very topic the other week on The Front Page. A lot of viewers and listeners had issues with the guest's sceptical stance on EVs. For instance, he called Tesla a garbage car, predicted that many EV makers would fail quite soon, and emphasised hybrid reliability over full electric vehicles. First off, how do you respond to claims that most new EV brands won't survive ten years, leaving owners without parts or support?
Jonathan Sergler: Look, that's a really interesting take on the market as it stands at the moment. There is absolutely no doubt that the entry into the market by a proliferation of different brands is not something that we have seen for quite some time within the New Zealand marketplace. The New Zealand marketplace for new vehicles has remained relatively static in terms of its volume over the last ten to fifteen years. So you could argue — and "could" being the operative word — that there is going to be a challenge for space in the new market for all of these new brands, irrespective of where they come from and what sort of technology they are running, because the New Zealand marketplace for new cars has been static.
In saying that, we have often seen entrants come into the market — whether they be from Japan back in the seventies, Korea in the eighties and nineties, and now we're seeing the Chinese manufacturers arrive — and they all come bringing different things to the marketplace. It just so happens that the Chinese manufacturers are very focused on EV and hybrid technology as opposed to standard internal combustion engines. So I think that's bringing a bit of a different view from a number of people within New Zealand around what they bring to the marketplace.
Are they going to be around in ten years' time? That's a really challenging question to answer anyway. There are a number of legacy car manufacturers that you could ask the same question of, particularly some of the smaller-volume players that come out of Europe currently. How do they maintain their network in New Zealand when they're selling fifty vehicles a year? So it's quite pointed to say that the Chinese brands will disappear.
Plainly, these manufacturers have been around for quite some time. They haven't been around for five years. Some of them — and I've done a little bit of research — some of these manufacturers have been around for twenty to thirty years, doing various different things within both the automotive space and agriculture and things like that. BYD is not a five-year-old company. It's been around since 1997, I think, off the top of my head — don't quote me on that.
As for whether parts will be available: Holden exited the New Zealand market. They were one or two in terms of volume for years and years, and they exited the market four or five years ago from memory — and you can still get parts for those vehicles. I talked to the guy that runs our auto glass business here, and I said, how are you finding getting glass componentry for new Chinese vehicles? He said it's absolutely no different to any other manufacturer that we supply glass to — after a small period of time, about six to nine months, you can get stock on all sorts of different glass components. So there are no issues at the moment. Crystal ball gazing — what does that mean in ten years' time? It's very challenging to put a stake in the ground and say they're not going to be here. Time will tell.
Changing attitudes to used car buying
Chelsea Daniels: I guess it's because when we go out and buy a new car — and we were talking about this in the office as well — we're kind of stuck in our ways. If I was to call my dad and say, "Hey Dad, I'm going to buy a new car," the first thing he would probably say to me would be, "Make sure it's only done a hundred thousand Ks," or, "Make sure you don't have to go to a Toyota-certified dealership for your parts." Are these just ancient concerns that someone looking for a car in the eighties would have had to come up against? Nowadays, it's a lot easier and there's a lot more choice.
Jonathan Sergler: There's definitely more choice — that's absolutely the case. And when you say buying a new car, we're talking about buying a new used car, yes? Let's just make that clear, because I'm sure some of the viewers will go, "Hang on a second, what are we talking about here?"
So if we're looking for an opportunity to buy a used vehicle, you're absolutely right. In exactly the same way that my dad taught me to drive — and he probably taught me a whole bunch of things I shouldn't be doing on the road, though I've got to be careful saying that from an AA perspective —
Chelsea Daniels: Oh no, my dad also did, but we've learnt better, haven't we?
Jonathan Sergler: Exactly. The old "a hundred thousand Ks — you can't get a car, it'll be well and truly done by then." We regularly see vehicles that have done three, four, five hundred thousand kilometres on internal combustion engines — they go a long way now. So that myth has absolutely disappeared.
The number one thing to do when you're looking to buy a used car is to make sure that you can get the provenance of the vehicle as much as possible, and that you trust the person you're buying it from. Now, that's quite hard in some cases, particularly if you're buying sight unseen or perhaps off Facebook Marketplace — which we would not recommend. Check out the car, check out the current owner, just do the normal checks and balances.
But you're absolutely right — choice is the key thing that is different to what it was like even five years ago. And the great thing about the internet is you can also research that choice in a way that you've never been able to before. I can tell you what's good about one car; someone else might say that a Toyota hybrid is the only car you should buy. It's a good, safe, practical car, relatively cheap to run — but it's not the only car that can service your needs.
New versus used EVs, and the depreciation question
Chelsea Daniels: Are there any benefits in buying a brand new EV versus a second-hand one? Or is the benefit in the second-hand market that there aren't many yet?
Jonathan Sergler: How best to answer that question — it's probably easier if we actually take the EV part out of the equation and just say: buying a brand new car as the first registered owner, versus buying a used car. Let's approach it from there, and then perhaps we can put the nuance about EVs on top.
There are benefits you get from buying new that you don't get from buying used. Plainly, you are the first owner. It is new. All the running parts are new. It comes with the manufacturer-based warranty. Generally it will come with a service plan for ease of use. So you should have hassle-free motoring for a decent amount of time — three to five years.
Now, if you were to buy used, the benefit is you're not paying the new price, because that vehicle has been used — twenty thousand Ks, forty thousand Ks, eighty thousand Ks, whatever the case may be. So there is the depreciation piece, which you do not pay for when you buy used. But again, this is where the provenance of that used car becomes critical. When you're looking to purchase it, you've got to make sure that the mileage it has already done is commensurate with the level of servicing, and that the wear and tear on the vehicle is acceptable. Those are the trade-offs.
Now, if we overlay the EV part, you have battery technology which is changing very rapidly, and the proxy for that is range. You can buy a Nissan Leaf literally for two or three thousand dollars at the moment, and you'll have a range of somewhere between thirty and sixty kilometres. Whenever I talk about things, I'm going to be brand agnostic and very general, because no specific use case is ever going to apply to one person.
If you jump on Trade Me right now, you will find plenty of opportunities — a Nissan Leaf that is Gen 1 or Gen 2, one of the very first ones that came out, very cheap. The trade-off is it doesn't go very far without charging. As you step up the amount of money you want to spend, you can get a Nissan Leaf for around $20,000, which will give you somewhere between two hundred and three hundred kilometres of range.
The same basic premise applies — the initial depreciation hit has moved through the vehicle, make sure it's acceptable wear and tear, get it checked. The depreciation curve we see on EVs: we've just sold two of our fleet EVs — they were $80,000 vehicles when new, and we sold them after three to four years and got $35,000 to $40,000 for them, absolutely in line with expectation for a petrol internal combustion engine vehicle of similar use case. The depreciation was no worse and no better. Granted, that's a sample size of two, so we're still learning from an EV perspective as well.
But that's kind of the picture — and some of those vehicles that were bought new during the clean car period in 2022 and 2023 will be showing up in the second-hand market now and probably for the next year or so, and there could be some good opportunity sitting within those vehicles.
Battery degradation over time
Chelsea Daniels: Can you talk about range — so that's basically how far you can go without having to charge, like how far you can go before your fuel light comes on. Does that range depreciate over time?
Jonathan Sergler: Yes, it does — in exactly the same way that I had this problem last night with my TV remote. I had to replace the two AA batteries; they'd been used. Now, probably not a great example when you're comparing that to a car, but the battery does degrade over time.
There are various reports from around the world showing big use cases — big kilometres travelled — and seeing battery degradation of somewhere between ten and thirty percent, and we're talking hundreds of thousands of kilometres. So the degradation in battery life is not huge, particularly when you consider that from a New Zealand context, we're not going to be doing huge mileages. You're not going to see a battery go from brand new to absolutely useless in five years. We have no use cases of that.
I've talked about end-of-life batteries for motor vehicles always having a second home in New Zealand — battery storage, whether from a residential or commercial use. So those batteries get recycled. They don't end up in landfills. They get different use cases, or the componentry can be recycled into new batteries.
Hybrid versus full EV — which is better?
Chelsea Daniels: Where do you sit on the hybrid versus EV situation? Is one actually better than the other, or is a hybrid a way to dip your toes in before you go full hog?
Jonathan Sergler: Chelsea, there is no right answer to this question.
Chelsea Daniels: Well, you might have realised that my car is actually coming up to probably not passing its WOF quite soon, so these are all very pointed questions.
Jonathan Sergler: Exactly. You should do an ongoing podcast on your vehicle-buying journey. Hybrid versus EV is a polarising question on both sides of the drivetrain spectrum. EV drivers will tell you that hybrids are the worst. Hybrid drivers will tell you that EVs don't give you the flexibility. And vice versa.
Within the hybrid scheme of things, you've got a plug-in hybrid — you actually plug in the electric hybrid and get your charge that way, then the vehicle may run purely on electric power for a period of time before the internal combustion engine kicks in. Or you've got the onboard hybrid system — the most popular being the Toyota Prius kind of setup, where the battery is being constantly charged and used by the internal combustion engine. So there are different types of hybrid vehicles and they do have different use cases.
We have swapped out a lot of internal combustion engines here at the AA from a management fleet perspective into plug-in hybrids, but we have charging on site at our office. So people can basically have full EV usage in and out from work, and they've got the internal combustion engine if they need to go to see one of our sites in Tauranga or Whangārei without having to worry about charging. You could do that in a day.
So again, not going to give you a definitive answer, sorry Chelsea. Different use cases — different vehicles stack up in different ways. The main thing I would say is: if people are looking — yourself included — take a record of how you use your current vehicle over a couple of weeks and see: am I doing ten-kilometre hops? Am I travelling a hundred kilometres a day? How do I actually use my vehicle? That way you can look at the different types of vehicles and their drivetrains and work out which would be good for you.
There is also an absolutely fantastic resource, which is one hundred percent independent, called EVDB. James Foster is the guy that runs that website, and he can give you direct comparisons between internal combustion engines, EVs, hybrids — everything available in the New Zealand market. It shows you the comparison between the different vehicles. A fantastic resource for people looking to potentially make a change.
Understanding your own driving habits
Chelsea Daniels: I suppose I read on the NZTA website that urban drivers generally drive only twenty-two kilometres a day. And in my brain, that doesn't compute. I don't know how many kilometres I drive a day. I don't know how many kilometres it is from my house to work. Do you think we just need to educate ourselves a little bit more about exactly how many kilometres a litre of fuel gets us, and then work it out from there?
Jonathan Sergler: Yeah, there are a couple of things you can do there, and I think that's a great place to start — actually understanding what you're doing right now and the costs of doing that. We've actually just released an app today which has got a trip tracker in it, and you can do exactly that. You can plug in where you're starting and where you're going, plug in your vehicle, and it will tell you exactly the cost it will take for you to travel. I plugged in Auckland to Whangārei the other day, plugged in my car — which is a small EV — and plugged in a family car, which is a large diesel SUV. It was really interesting to see the cost comparison.
Chelsea Daniels: How different is it?
Jonathan Sergler: They are very different vehicles, so we've got an EV versus a large diesel SUV, and the cost difference was about sixty dollars. Just for one trip.
Chelsea Daniels: For one trip. Yeah.
EVs and the national electricity grid
Jonathan Sergler: If we were to go one hundred percent electric — and we're at about two percent at the moment, so we've got a little way to go — we would see a twenty percent increase in demand on electricity. However, we've got to appreciate that these EVs are part of the solution. These are batteries on wheels. We're moving to a place where these EVs are going to be powering your home and your businesses. There are some fabulous studies done last year on that, showing that an average EV will put around $2,000 worth of value back into the grid each year. So it's a circular, renewable, exciting opportunity for this country, which decreases our dependence on importing fossil fuel.
The clean car discount — would it work better today?
Chelsea Daniels: In terms of the clean car discount and the rebate — it was scrapped, and there was criticism that it went to people who didn't need it. But is that only because back when the rebate was in effect, the only cars that came to mind were Teslas and BYDs? Someone buying a Tesla probably didn't need a rebate because they've got money to buy a Tesla. Whereas now, if we had the rebate today, there are a lot more affordable options in the hybrid and EV space. Do you think it would work better now than it did then?
Jonathan Sergler: It's a very interesting question, and a challenging and probably quite polarising one to answer. You're absolutely right, though. The raft of choices we have today does not compare to what it was like two years ago, where we had a bubble of EVs priced between $60,000 and $80,000. The Dongfeng Box — whilst that's an interesting name — has a price point of $29,990. That vehicle was not available for sale back in the clean car era.
So it's hard to know what the uptake would have been. I suspect, knowing what we know now and living through the oil issues we're living through right now, the uptake would have been astronomical. I know, talking to one Chinese manufacturer, they have a whole heap of cars arriving in April and May — they're all pre-sold. And they've got, to quote him, thousands of vehicles arriving in June. They're really upping the ante and offering that choice. This is a manufacturer with a good range from $30,000 up to $80,000 plus.
So it's hard to compare today with the clean car era because of how much the choice has changed. Knowing what we know now, I think if the clean car discount was in place right now, it would be going gangbusters — just because of the cost of running your internal combustion engine, more than anything else.
Chelsea Daniels: And even if the average Kiwi household couldn't afford an entry-level car at $29,990 today, maybe in five or six years' time that'll be on the second-hand market, so it's a win-win anyway.
Jonathan Sergler: Absolutely. All those vehicles that come into New Zealand new cycle through the second-hand market between three and seven years generally. That's where the opportunity lies — and going back to the conversation we had around new and used, the initial depreciation hit is taken out. That could be twenty percent, thirty percent, forty percent — who knows. If you take a $50,000 new car, it could be entering the used market at $25,000, and that could be big enough for your entire family. That $30,000 Dongfeng Box might, in three years' time, be $15,000 second-hand. Again, there are a whole bunch of unknowns there — don't quote me, everyone. But you can see how that flows through the market.
I did a quick check on Trade Me — there are 926 EVs available from a used perspective. I took out new, just clicked used. So there are 926 EVs sitting there. And like I said, those Nissan Leafs start at a couple of thousand dollars. They're not going to be for everyone, but there is opportunity in that space.
The future of charging infrastructure
Chelsea Daniels: Now, lastly, let's look ahead a hundred or a thousand years into the future. It's a utopia. We've all got EVs. What does the infrastructure around charging all of them look like? I've heard about theoretical wireless charging — can we have roads that just charge cars in the future?
Jonathan Sergler: Well, we'll have flying cars by then, surely.
Chelsea Daniels: We're supposed to have flying cars by now.
Jonathan Sergler: The charging road is actually in prototype at the moment, from what I've read from some overseas jurisdictions. No different to having your mobile phone sit on a charging pad — same basic technology and physics — where vehicles can drive and be charged. I suspect that's not a hundred years away. That will be reality over a relatively short period of time.
If we're all driving EVs — and assuming we are driving EVs and not something else —
Chelsea Daniels: And not teleporting everywhere.
Jonathan Sergler: Exactly. Your charging infrastructure will be much more robust. I suspect our energy capture from nature will be much better. Hopefully the cost comes down. I don't think you and I will be here to enjoy that in a hundred years, but you never know.
Chelsea Daniels: We might be having this very same conversation.
Jonathan Sergler: You never know.
Chelsea Daniels: Thanks for joining us.
Jonathan Sergler: No worries. Cheers. Thanks very much.