Electric cars in New Zealand: What’s the buzz about?

Electric vehicles have become a hot topic in recent years as discussions about how to become more environmentally responsible have intensified. But how do you decide what type of electric vehicle to buy and how does going down the petrol-free route – even if only partially – impact on your car insurance? Canstar explores the world of electric cars to help you choose a shiny new set of wheels and shares tips on what to consider with car insurance. 

Electric vehicles are a key component of New Zealand’s environmental goal to be a carbon-neutral economy by 2050. And, many New Zealanders are open to making the switch. According to a Canstar Blue 2019 survey*, nearly half (45%) of new car owners would consider purchasing a hybrid or electric vehicle.

But before you charge into buying an electric vehicle – or start saving feverishly for one – you’ll want to know what to look out for. Here’s Canstar’s general guide on buying an electric car in New Zealand.

What is the difference between a Plug in Electric Vehicle (PHEV) and an Electric Vehicle (EV)?

If you’ve already started to do some research on electric vehicles, you have probably picked up that there is more to choose than just what make and colour you’ll go with. The two types of electric vehicles available in New Zealand are Plug in Electric Vehicles (PHEV) and Electric Vehicles (EV).

Plug-in hybrid cars (PHEVs) 

Plug-in hybrid cars are, as the name suggests, hybrid cars that can be plugged in. These models operate by using two different powertrains, the mechanism by which power is generated and transmitted to the road, both of which can drive the wheels of the car. The two powertrains are the electric motor and the normal petrol engine. The electric motor allows the driver to travel a certain distance based on the capacity of the batteries. The normal petrol engine kicks in once the vehicle’s electric battery has run out. As a general rule of thumb, a PHEV will be able to travel 30-50km before the battery is depleted, so is ideal for around-the-town driving and even better if your trip to work and back falls within that range of distance.  Examples of common PHEV vehicles in New Zealand include: Mitsubishi Outlander, Hyundai Ioniq, Kia Niro and Toyota Prius.

EVs

On the other hand, you have the option of going for an EV – and there are many advantages to this option. The main attraction of EVs is that they are better for the environment than PHEVs (as they don’t use fuel at all). EVs can also be better on your wallet, seeing as you aren’t having to pay to top up with fuel. However, because EVs rely solely on the energy that they store in their batteries, you as the driver need to keep a watchful eye on the monitor at all times. At present, EVs on offer will generally have a range of around 200-300km, whole some are much lower, at 100km. For this reason, if you regularly drive long distances – without stops – a PHEV might work better for you. Examples of common EVs in New Zealand include:  Nissan Leaf and Hyundai Ioniq and Tesla Model S.

Unfortunately, at present electric cars are quite the financial investment – with cars costing upwards of $10,000 – so you most likely have time up your sleeve to do your research while you save the cash!

What do I have to consider with car insurance if I buy an electric vehicle?

Car insurance costs

The main consideration when choosing car insurance for an electric vehicle is to look very carefully at whether the insurer can provide suitable wording in the policy, according to Seneca, a company that provides New Zealanders and New Zealand businesses with advice on insurance, home loans, KiwiSaver and other investments.

The reason for this comes down to the nitty gritty of the process around repairing an electric  vehicle in the unfortunate event that you get into a car accident. For example, as we mentioned earlier, one of the popular models of EVs in New Zealand is the Tesla Model S. But there are currently no Tesla dealerships in New Zealand and, to make matters more difficult, availability in New Zealand for parts for any EV are limited. Continuing with the example of the Tesla Model S, according to Seneca, the only approved repairer for structural repairs of this model of car is in Australia. So, if you want to keep your warranty for your vehicle, you need to ensure that your car insurance policy covers this.

Other points to consider when getting car insurance for a vehicle include:

  • Sustainability discounts.
  • Continuation of Journey.
  • Vehicle Useage.
  • Limited mileage options
  • Loan vehicles while under repair.

But unfortunately, in general, most insurers will treat your EV as if it is a petrol car, so the biggest benefit might be the green one – the fact that you are doing right by the environment.

To help you decide which car insurance provider to go with, check out Canstar’s customer satisfaction ratings of car insurance providers available in New Zealand.

Compare car insurance with Canstar

*Canstar Blue’s customer satisfaction ratings for cars reports on the results from customers who have bought a brand-new car from a dealership in the last 3 years. In this case, 845 New Zealanders.

Cover image: Shutterstock: SHINJONGHO

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