Budget 2021: No EV incentives for consumers

Budget 2021’s more than $380 million investment towards supporting uptake of EVs is an important move that has the potential to create a step-change in New Zealand’s journey to sustainable transport, Drive Electric chair Mark Gilbert says.

It contains $41m for the Carbon Neutral Government Programme, the Government increasing its contribution to the Low Emission Transport Fund by up to $12.5 million per year, which will be an expansion (both in terms of scope and size) of the existing Low Emission Vehicles Contestable Fund, $42m for government agencies to lease low-emission vehicles, and tags $302m for a new initiative to support EV uptake, details of which are still being finalised.

“The combination of these investments should lead to many more electric vehicles on our roads in coming years,” Gilbert says.

“As electric vehicle uptake has accelerated in recent years in other countries, New Zealand has lagged behind. In countries like Norway, more than 80% of new light vehicles entering the fleet are electric or hybrids, while in New Zealand the figure remains below 5%.

“Each fossil fuel burning vehicle entering New Zealand today will be part of our national fleet for an average of 15 to 20 years. If we are to achieve our carbon zero targets, we need to start buying electric now.

“The investment in increasing the number of electric vehicles in government fleets is an important act of leadership, and helps grow the number of secondhand vehicles on the market over time.” Further investment will be needed to decarbonise the 15,000 vehicles in the government fleet, Gilbert believes.

“The coming Clean Car Import Standards, along with these new government investments, we hope will help reduce the upfront cost of buying an electric car,” he says.

“They will mean New Zealand joins the electric revolution, rather than becoming a dumping ground for fossil fuel burning vehicles that other countries don’t want.”

Budget 2021 gives transport and business a boost to reduce emissions, energy minister Megan Woods says.

The Low Emission Vehicles Contestable Fund (LEVCF) will become the Low Emission Transport Fund (LETF) to reflect a change in eligibility for projects in areas like aviation, and maritime and for off-road vehicles.

Other fuel technology projects using biofuel and hydrogen, will also now be eligible for funding.

“Past projects have expanded the public electric vehicle charging network and invested in New Zealand-leading, innovative technology, such as electric trucks. We’ve upskilled the industry; and organisations from small community groups to nationwide transport companies have shown there is a low-emissions vehicle solution for just about every need,” Woods says.

Funding for the LETF will now be met through an even split of Crown funding and levy funding.

Total funding for the programme will reach up to $25m per year by 2023/24, with the Government increasing its contribution to up to $12.5m per year by 2023/24 through Budget 2021.

Meanwhile, more businesses will be able to make the transition to low-emissions energy, with Government funding for the Energy Efficiency and Conservation Authority’s (EECA) support services for business increasing to $8.1m a year.

EECA helps businesses identify and implement lowest-cost carbon abatement projects, optimise energy use and switch to low-emissions energy sources.

Much of the budget funding was earlier flagged by climate change minister James Shaw.

The Motor Industry Association (MIA) welcomes the Budget’s initiatives for cleaner vehicles.

The provision in Budget 2021 that establishes a $302m tagged contingency to implement a regime to incentivise the uptake of low-emissions vehicles is particularly welcomed, MIA chief executive David Crawford says.

“We have consistently advised Government that if they want to accelerate the uptake of low emission vehicles then they need to address their lack of affordability, at least in the short to medium term, compared to their equivalent internal combustion engine (ICE) vehicles,” he says. “We also welcome the commitment already announced of $42m to help decarbonise the public sector’s vehicle fleet.”

Crawford says Megan Woods’ announcement to amend the LECVF to become the Low Emissions Transport Fund is timely.