Service Matters (07) 3353 6939 Unit 6/37 Queens Road, Everton Hills QLD 4053

Are you thinking of buying an electric car? If you support the cause of pollution control with green and clean mobility, it is definitely the right choice to make. The looming danger of carbon emissions and its effect on human health is making a huge impact on environmentally conscious citizens. It is one of the reasons a niche consumer base leans heavily towards purchasing EVs as opposed to traditional vehicles. Switching over to an EV can result in significant long-term savings due to low maintenance costs.

However, truth be told, as of now, the cheapest electric car in Australia – the Hyundai KONA costs a little less than $40,000 with a battery pack delivering 258 miles per charge. This is a lot for a five-door hatchback especially when you compare it with a fuel-backed entry-level luxury car that can cost the same.

So what makes EVs so astronomically expensive? And more importantly, how do we reach a balance between being socially responsible and getting a top-notch fancy car? Let’s find out.

Here is a simple story to illustrate the biggest challenge for contemporary EV production – affordability. When Kodak started manufacturing digital cameras, they stopped short right at the onset and discarded the idea. 

Why? Because selling digital cameras would threaten their very basic business model – selling cheap cameras and making money from developing films. They stopped making digital cameras even as others continued with the evolution. Today, Kodak is no longer relevant in the market. 

Something similar is brewing in car manufacturing. Firstly, it took 100 years of uncountable billions of dollars as well as development hours to come up with a full-proof Internal Combustion Engine (ICE) and the associated gearbox needed to maintain the motor. Today, they are manufactured in tens of millions a year, making the cost per unit affordable at best. 

These 100 years also saw the categorical smoothing of a raw material supply chain. Iron ore extraction, smelting, casting and panel stamping for the car body has evolved as an industry in itself which easily supplies the components for manufacturing an ICE car. 

They have a mature supply chain, a century of spreading developmental costs plus tens of millions of units purchased each year to cover costs and expand profit. This is the classic trope for mass manufacturing and distributing a cheap product.

EVs, on the other hand, are far from catching up. It is not the production of steel bodies or copper for motor windings that is posing as a threat. The real problem lies with the extraction of raw materials for the battery and refining the production capacity of battery-backs. 

The cost of electric cars is sky-high because of a basic economic problem – high demand and low supply. The number of EV units being produced is just not enough to meet the pent-up demand for them. With such low numbers being produced, cost is high per unit, making them doubly expensive. Also, there is a classic economic circle at play, which brings us back to the Kodak story.

Current EV manufacturers in the market are in fear of serious dislocation of their existing business model – sell fuel-backed cars and then make money from servicing charges and the sale of components, after all that is the business we are in, making profits from servicing cars.

If consumers were to unite for the sake of breaking the corporates’ monopoly and responsibly making the effort to curb global warming, the EV market may make faster leeway.

In the meantime, while you still operate your ICE vehicle, remember that independent workshops such as our are able to provide you with all you are servicing and repair requirements and still allow you to keep your warranty in check. Instead of leaning on a dealership, you could help out local businesses and soften the corporate power. If their profit-making mechanism is alleviated, we might be looking at a hydrocarbon free environment at last. Cheers to that!