Electric vehicle shortage: international delays keep consumers waiting

A recent Consumer NZ survey found that 30% of consumers are looking at electric vehicles (EVs) for their next set of wheels.

However, car manufacturers are scrambling to fulfil demand, thanks to a worldwide microchip shortage – due to Covid-related factory downtime and closures in China, and the war in Ukraine.

Keeping up with demand

There are more than 42,000 electric vehicles registered in New Zealand and with demand at a record high, that number is set to increase – it’s just a matter of time.

Paul Fuge, the manager of Consumer NZ’s Powerswitch site, is one of many people looking to move on from a petrol vehicle. But when he went looking at new hybrids, one sales assistant told him that even if he put a deposit down that same day, he shouldn’t expect to be driving off the lot in his new vehicle until early 2023. Other car dealerships he tried had some available stock, but he was told these were fast running out.

It all depends on what make and model you’re after. For example, Hyundai has stock available and arriving monthly, but if you want a certain colour or specification, an order will need to be placed and that could take up to six months to arrive.

Hyundai New Zealand, whose Ioniq 5 EV was named NZ Car of the Year in 2021, released a report on 18 March saying: "Petrol price turmoil has … quadrupled the number of New Zealanders interested in buying electric vehicles … There was also a major spike in New Zealand google searches for EVs as fuel prices climbed, breaking the $3/litre mark in March."

As if steep fuel prices aren’t enough of a nudge, the government’s updated clean car discount scheme offers a rebate for those who purchase low-emission vehicles, the first time they’re registered in New Zealand. If your EV or hybrid fits the bill, you can get up to $8625 back.

“There’s no shortage of orders in the system, the question is just when can they be delivered?” said Mark Gilbert, chairman of Drive Electric, a not-for-profit group promoting the uptake of e-mobility here.

“EVs registered in New Zealand increased by 55 percent in the last year, but there’s just insufficient stock in the country to satisfy it right now. And that’s not because of poor planning – it’s just a reality of the world at the moment.”

Why is there a shortage?

Ukraine is a major supplier of car components to European car companies but it can’t operate amid Russia’s invasion. Also, lockdowns in China have closed factories or reduced their output, exacerbating pressure on supply chains created by Covid-19.

“Cars these days are more like computers on wheels,” Gilbert said. “Most consumer products that require microchips have been affected … Ukraine produces a large proportion of neon gas, which is essential to produce semiconductor chips. Car manufacturers have cautioned this will impact the supply.”

Mark Stockdale, principal technical adviser at the Motor Industry Association of New Zealand (MIA), which represents distributors of new vehicles here, said there’s a global shortage of all vehicles, not just EVs.

“Initially it was the impact of lockdowns on vehicle production which led to a lack of supply, but while production is recovering there is still a backlog of demand to fill worldwide … In some cases, distributors have ceased taking orders for some models due to the extended wait time before they can be supplied to New Zealand.”

Where does New Zealand sit in the queue?

The problem is more than just a shortage of vehicles; it’s also a shortage of the right type of vehicles – right-hand drives, to be exact. Most manufacturers only produce left-hand drive models for the major markets in continental Europe and the United States.

Stockdale said: “We are not top of the queue for sourcing electric vehicles where manufacturers prioritise limited production to larger, left-hand drive markets.”

In fact, of the top-selling EVs globally, only about 21% are suitable for mainstream New Zealand, he said.

That said, there are currently more than 70 models listed on the Drive Electric website.

Plug-in vehicles were 5.6% of new vehicle sales in New Zealand in 2021 (a record), compared with 2% in Australia and 1% in Japan (a major source market). The top-selling passenger car in March was the Tesla Model 3. So New Zealand is doing well for electrified vehicle sales compared with some other right-hand drive markets.

Downgrade to get your set of wheels faster

If you just can’t wait to get your hands on your new EV, one option to get it sooner is to sacrifice some features. If your car has fewer features, it’ll require fewer microchips, – meaning it won’t be held up for as long in the production process waiting for parts.

Stockdale said: “It is possible to despecify some models with less optional equipment, like substituting a high-end stereo, which means it requires less microchips in order to manage the global shortage.”

Gilbert has seen a few cases where dealers and importers have had the odd surprise, too.

“You might think you’re going to get an electric sunroof and it arrives without it – it’s just the only way they can do it.” Gilbert explained. “The factories have got to keep moving the cars through the production facility.”

If a car does arrive and it’s not entirely what you wanted, any shortage of a feature should be reflected in a cheaper price and you’d be given the option to take it or leave it.

“Most retailers and dealers out there would be wanting to keep you as happy as Larry, really,” Gilbert said. “It’s a difficult time for them and they’re trying to manage it the best they can.”

“There is still upheaval in global shipping channels and port delays,” Stockdale said, “as the world recovers from the impact of Covid-19, so it’s unclear when things will get back to normal. But there is light at the end of the tunnel as countries move from managing Covid-19 as a pandemic to endemic.”

Drive Electric’s website is a hub of information for those considering ditching fossil fuels.

Gen Less also has a calculator freely available that helps you run some of the costs of car ownership based on your unique situation.