National and Labour won’t commit to assessing EV Salary Boost leasing scheme

National and Labour have not committed to assessing a proposed pre-tax electric vehicle leasing scheme, despite an advertising campaign aimed directly at their leaders in the final week before the 7 November election.

Rewiring Aotearoa and Drive Electric are behind the EV Salary Boost, under which employees would lease a new or used EV for three to five years, with payments deducted from their before-tax pay. The idea is based on Australia’s novated leasing system, though the groups say they are not proposing a direct copy.

Both organisations have pitched the scheme to every party in Parliament. Their latest adverts are addressed to National leader Christopher Luxon and Labour leader Chris Hipkins, with the line “Hipkins or Luxon, either will do.”

What the parties said

Asked by RNZ for a response, National pointed to its target of 10,000 public EV charging points by 2030 and funding for cleaner heavy vehicles.

“National supports New Zealanders having access to a competitive and affordable range of vehicles, including efficient and electric vehicles,” a party spokesperson said.

Labour cited its manifesto commitments to strengthen clean car emissions standards and expand the charging network. Neither party directly addressed whether it would support the leasing proposal, RNZ reported.

A review, not a rollout

The groups are not asking for the scheme to be adopted outright. They want whichever parties form the next government to commit to a formal assessment within their first 100 days.

That assessment would cover the full fiscal cost and options for a cap, how the scheme would be treated under PAYE, fringe benefit tax and GST, whether used EVs would qualify, vehicle price caps, lease terms and consumer protections, and what happens when an employee changes jobs. Deloitte has prepared an initial paper on the tax considerations, which has been shared with political parties.

Rewiring Aotearoa chief executive Mike Casey puts the cost to taxpayers at about $5000 a car, and says participating workers would save an average of $36 a week compared with a standard car loan.

He told RNZ that upfront prices still put new EVs out of reach for many people, and that politicians relying on the market to drive uptake “are not being strategic or courageous.”

“One of the biggest problems that we’re seeing, for example, is tradies all having to put their prices up on everything because of the price of diesel,” he said.

Drive Electric chair Kirsten Corson says the scheme would also add to the supply of second-hand EVs for buyers who cannot afford a new car.

“High fuel prices show how exposed households and businesses are to costs set offshore,” she says. “Every car that switches makes us a little less exposed to the next global fuel shock.”

The Australian model

Australia exempted eligible EVs from fringe benefit tax from July 2022, making novated leases on EVs significantly cheaper. More than 100,000 Australians have used the exemption, and battery electric and plug-in hybrid vehicles rose from 1.8% of new car sales in May 2022 to 22.9% by March 2026, according to figures cited by the two groups.

The exemption has also cost far more than forecast. Treasury originally expected it to cost about A$90 million in 2025-26, and that figure is now expected to reach A$1.35 billion. From April 2027, EVs priced above A$75,000 will move to a partial rate.

Casey says the New Zealand version would avoid some of those settings, including allowing novated-lease buyers to avoid GST on the vehicle.

In New Zealand, EVs make up 3.3% of the light vehicle fleet. New EV sales fell from about 20% of the new car market in 2023 to under 10% in 2024 after the Clean Car Discount ended, before recovering this year.