A seismic shift
It wasn’t that long ago that the sight of a Tesla on New Zealand roads was a novelty. Now they’re commonplace, along with the growing number of other makes and models available on the EV market here.
In fact, EV demand is so high they’re being snapped up before they even arrive on our shores, and car yards around the country are running out of hybrid vehicles. Data from EVBD shows there were 2,370 light EV registrations in March this year, compared with 642 in February. Light plug-in hybrid registrations also saw a big jump from 717 in February to 1,456 in March.
Many are pointing to the Iran conflict and rising petrol prices as drivers for these increases, but the spike in EVs speaks to a wider trend in New Zealand. EVs sales were strong in 2023 before declining sharply in 2024 following the end of the Clean Car Discount. The latest resurgence has brought into sharp focus our energy use profile.
Electricity generated from renewable sources has powered our homes and many commercial buildings for decades. While nearly 90% of our electricity is renewable, many New Zealanders will be surprised to know that electricity itself supplies only around 30% of New Zealand’s total energy needs.
A large part of this is because the cars we traditionally import run on petrol. As we’ve seen in recent months, this puts most motorists at the mercy of events and supply chains on the other side of the world.
A transport system that runs on local, renewable energy and is powered by a grid we already have is no longer seen as an idyllic far-off future – it’s a very real possibility that is quickly taking shape in front of our eyes.
Of course, there are still barriers for people and businesses to transition to clean vehicles, the main one being cost. Not everyone can afford to buy a new EV, but the recent surge in EV purchases will speed up the maturity of the market. More EVs will become available for consumers; prices will ease; the charging network will continue to expand; and a strong second-hand market will evolve.
A very different challenge
In many ways, electrifying our vehicle fleet is the easy part. Like most of our cars, our heavy industry is still reliant on fossil fuels. Industry often needs a lot of heat to power operations, and coal and gas have historically provided the cheapest way of doing this.
Shifting big industry to electricity brings a completely different set of challenges to electrifying transport. After all, a dairy processing plant in Southland is a different customer to a parent doing the school run in Auckland.
Electrifying a whole industrial site takes time and is capital-intensive, and the transition will be a bumpy one for many. The reality is that some businesses don’t have the capital to move to electricity, while others need to continue with other heat sources such as gas – which is why gas is as an important part of the energy mix in New Zealand for now.
But there are businesses that can electrify much quicker and more easily. Electric heat pumps can meet the needs, and lower costs, for players across agriculture, food and beverage manufacturing, textiles, and clothing.
NZ Steel's electric arc furnace will soon account for roughly half of New Zealand's domestic steel production and reduce New Zealand Steel's emissions by more than 45%. That speaks to the potential of electricity to power entire industries in New Zealand, not just our homes and cars.
The opportunity at hand
There is still a lot of work to do to shift transport and industry to local, renewable energy, but we must build on the momentum and the strong progress we’ve made.
We already have the electricity infrastructure in place and generation companies are adding more electrons to the system by pouring billions of dollars into new generation projects. There’s collective will from consumers, businesses, and politicians to continue electrifying New Zealand.
Recent spikes in fuel prices have brought enormous disruption to our everyday lives, but sometimes it takes a shock to the system for us to us see the opportunity in front of us.
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