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EV Parking

To EV or not to EV: That is the question

Apologies to the Bard as we take another look within the wide world of parking at electric vehicles. Regular readers may recall this was the subject of a 2017 newsletter, which took a pragmatic (and contrarian) view of the impact EVs (and autonomous vehicles) were going to have in the Australian parking market.

“Closer to home the Australian Energy Market Commission (in 2012) expected 20% of all new cars would be an electric vehicle by the end of the decade. In 2016 just 219 were sold – or about 0.00019% of the 1.15 million cars sold. A lot of catch-up footy to get to 240,000 sales by 2020.”

Fast forward to 2022 and sales were only 33,410 or 3.8% of total car sales. Of the 15.07 million registered vehicles, 83,000 (about 0.5%) were EVs.

Even Labor’s pre-election forecast that EVs would make up 89% of Australia’s 2030 new vehicle sales has recently been reduced to 27% by the Transport Department. That is a reduction of 713,000 vehicles in less than two years.

There are no new EVs available in Australia under $40,000 drive away.

The top 20 sellers list in 2022 comprised six medium SUVs, five utility vehicles, two small cars, two large SUVs, two small SUVs, one upper large SUV, one light SUV, and one medium car. It is difficult to see how EVs will make inroads into this significant part of the market.

The change of sentiment can be seen worldwide. Carmakers are for the first time offering substantial discounts to sell models that were previously subject to long waiting lists. Average discounts were 11% in the UK and 10% in the US.

The EU has decided to allow petrol-powered cars running on synthetic e-fuels to be sold post-2035. The UK has also pushed back the ban on the same cars to 2035.

Norway is the only country where EVs are the predominant vehicle – but it comes at a cost of about $23,000 in Government subsidies including sales tax, registration and tolls.

There is no doubt EVs reduce CO2 emissions, but the cost is simply prohibitive. We are likely to see Governments reduce direct and inefficient subsidies. Bjorn Lomborg of the Copenhagen Consensus clarifies the conundrum:

“Carbon emissions from an electric car depend on whether it is recharged with clean or coal power. Moreover, battery manufacturing requires masses of energy, which is today mostly produced with coal in China. That is why the International Energy Agency estimates that an electric car using the global average mix of power sources over its lifetime will still emit about half as much CO2 as a gas car. You can buy that same carbon emission reduction on America's longest-established carbon trading system for about $300. Yet many countries pay more than 20 times that amount in subsidies to convince people to make the switch.”

Finally, the technology required to recycle lithium batteries is in its infancy and expensive, with most batteries eventually dumped in landfill. One manufacturer, Toyota, has taken a contrarian view and is investing billions in hydrogen cell cars.  

To be clear, our view is not the demise of electric vehicles. A cautious approach to forecasting sales and uptake is needed, coupled with a better understanding of the risks to parking owners and operators.

So, how will EVs impact the parking industry?

Firstly, implementing EV chargers in car parks needs a balanced approach – between servicing the market and maintaining revenue. We recently looked at a large 1,000-bay site, with 6 Tesla chargers located in prime bays on the lower levels. At best only three bays are ever used at a time. The revenue loss on the three vacant bays was over $20,000 per annum. For central CBD sites with revenues per bay of more than $15,000 per annum, this loss could be even more significant.

Additionally, we are now seeing councils starting to mandate EV chargers in new developments across all public bays. This substantially increases the power required for the car park and the cost of constructing the car park, while also reducing the number of bays that can be provided, as the chargers increase the physical length of the parking bay.

Finally, there is a threat of an EV fire in a car park, especially risky under an office tower, hospital or residential unit block. All it will take is one major fire and insurance premiums will rise exponentially, not just for the impacted car park, its owner and operator. The UK is already seeing substantial premium increases for EVs as any damage to the battery in an accident is very hard to assess (let alone fix) and insurers are simply writing cars off.

Arup (UK) has undertaken an extensive study of the fire risks associated with EVs in car parks and should be read by all owners and operators.

Depending on the environmental conditions around the battery, the release of flammable gasses can lead to four different scenarios:

  1. Free burning fire
  2. Jet fire – where the vented gasses are released and ignite
  3. Flash fire
  4. Vapour cloud explosion

Each type of fire requires a different approach; however, in all cases, large quantities of water are needed (about 10,000 litres for a vehicle) and re-ignition occurs in 13% of cases.

There is also a risk of vehicles submerged in floodwaters causing a battery fire. Any car parks that are built underground and below the water level will be susceptible.

Mitigation measures (such as additional sprinklers, ventilation, detectors, etc) for new car parks will add substantially to the construction cost. Greater space between each EV bay will also be required to reduce the risk of a fire spreading.

Whilst EVs present a lower risk of fire than petrol vehicles, their impact is far greater.

Another final concern is that EVs are 30% heavier than petrol vehicles. Owners of older car parks, especially those freestanding steel and concrete structures that are exposed to the elements (and concrete cancer) will need to be assessed for their ability to withstand the additional weight.

As to the continued optimism of forecasters on EV sales in Australia, the words of Demosthenes ring true: “What a man wishes that he also believes.”

On that happy note, best wishes to all over the festive period.