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Why Australian dealers don't want to sell electric cars

Nissan has been using its Leaf electric car to test its driverless technology in Japan. Picture: Nissan

A report came out in July last year that said Australia’s “do nothing” approach of up-taking electric cars could cost the local economy over $350 million in the next 20 years, on top of the one million tonnes of carbon emissions that will be added to the environment.

Last year in Australia, just under 2000 electric cars were sold, with the majority of those going to commercial buyers. When you compare that to the 1.1 million new cars sold in Australia last year, it really paints the picture.

So what’s the issue? Well, there seems to be two: pricing and dealers.

As with every emerging technology, the initial entry cost is often high. The cheapest electric car on the market in Australia right now is the Nissan Leaf, which retails for around the $40K mark. But aside from the electric drive-train, everything else about the car was simply on par with vehicles worth half the price. It’s an extremely hard sell for the uneducated car buyer.

Your next bet is the BMW i3 which starts at $64K before on road costs. That’s damn expensive for a small hatchback, even if it is one of the best cars of the last few years.

BMW’s i3 is probably the best city car on the market. Shame about that price. Picture: Supplied

Lastly, we are left with the Tesla Model S. A car that has finally got a formula to sell in some half decent numbers.

It’s a luxury car that offers no compromises to other cars in its category. It’s quicker than a Mercedes-Benz AMG C63, yet is completely electric and will end up costing you way less over time thanks to fuel and servicing savings.

Australia’s first Tesla owner, and founder of internet company Internode, Simon Hackett, told Business Insider he thinks the key to fixing the price problem is with government tax incentives.

“Luxury car tax disproportionately impacts EV costs due to the higher up front purchase price,” he said.

“Only the ACT offers stamp duty reduction for EV purchases and other states are lagging behind here and there are no federal tax incentives for EV ownership either.”

He might be on to something too. If you check out the situation in the USA, where electric vehicle adoption is rising fast, federal and state governments are offering between $US7K-10K worth of tax offset incentives. In fact, Australia is the only first world country that does not offer substantial incentives to offset the upfront purchase costs of electric cars.

The tax incentives will likely pay off in spades too, with Hackett pointing out the likely saving to the health budget in Australia from reduced respiratory illness over time, which will be enormous. It is in fact air quality that drives much of the presence of zero emission vehicle ownership incentives in the USA and Europe now.

This is what we want to avoid. Li Feng/Getty Images

But then, even if someone does feel like dropping the extra cash on electric vehicles, the dealers don’t want to sell it to them.

Founder of Sydney based software startup Shiny Things, Mat Peterson, told Business Insider that one Nissan dealership even tried to persuade him out of buying a Nissan Leaf.

“We arrived and had two staff sit us down and say we were making a mistake and we should look at their petrol cars. We declined and asked to take the LEAF out and after much to-ing and fro-ing they finally retrieved it (and apologised that it may not have enough charge to do a test drive).

We got in, it thankfully had around 20km of charge and drove it out. The person taking us had no idea what it was, couldn’t answer my simple questions and when I glanced down at the odometer I realised why – it had less than 100km of driving on it after sitting at the dealership for 3 years.”

Hackett agreed, stating that even if head office wants to move out EVs, the dealers don’t due to their low servicing costs compared to traditional petrol or diesel powered cars.

“The point here – and it is a huge positive for EVs beyond their trivial ‘fueling’ cost is that the servicing costs for EVs are tiny. Most servicing expense and most mechanical failure in cars happens in the incredibly complex and expensive bit – the internal combustion engine.”

“An EV typically has around half a dozen moving parts in total between the motor and the wheels – including the motor and the wheels. An internal combustion engine has thousands of them.

“It is easy to see the disincentive, as a result, for a dealer used to profiting from the long term and often very expensive (and very profitable) servicing and engine repair business that goes with every car sale. The financial conflict of interest in offering an EV alternative is obvious.”

Traditionally, the most common problem that comes to most people’s minds is the infrastructure, and cars not being able to go the distance in such a large country like Australia.

This, for the most part, is rubbish. Each year, stats come out to show that 90% of the population commutes less than 100km a day, leaving loads of left over electricity in your Tesla, BMW or Nissan.

Once you’re home, you plug it in over night and you’re fine for the next day. Going on a road trip though? No worries, the likes of Tesla will offer you free Supercharger stations along the way that will take it from 0-80% charge in half an hour.

“Infrastructure is not much of an issue in the real world as almost all charging happens in your own garage while you sleep,” said Hackett.

“Tesla have lead the way in solving any residual reduced convenience for interstate travel with their rapidly expanding global network of free, ultra fast charging stations.”

Then of course, there’s the perception that electric cars are basically just big RC cars you can sit in. Watch the video below and you’ll soon be persuaded otherwise.

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