‘Clean car’ plan paves way for EVs

This story first appeared in the July issue of AutoTalk – CLICK HERE to download the magazine FREE

Electric vehicle uptake in New Zealand has been given a boost with consultation open until August 20 on a “clean car plan”.

It proposes feebate type incentives for zero or low emission producing light vehicles (small/medium cars, SUVs, vans and utes).

EV advocates and energy companies are among those to support the proposal which will see high emitting vehicles charged up to $3000 to enter the fleet – and up to an $8000 bonus offered on lower emitters.

For new or near-new plug-in cars, battery electrics would receive an $8000 rebate, plug-in hybrids $6800 and hybrids $4800, under the plan announced by associate minister of transport Julie Anne Genter.

But no vehicles over $80,000 would receive a discount – locking out many EVs currently on offer.

While the highest penalty for a new vehicle is $3000, used import cars would sit on a different scale – with a maximum fee of $1500, and a maximum discount of $2600.

“The cars, utes and vans we use every day are also the fastest growing source of harmful climate pollution and account for nearly 70% of our transport emissions,” Genter says.

“Most Kiwis want to buy a car that’s good for the environment, but tell us the upfront cost and limited choice makes it a challenge.

“This is about making cleaner cars a realistic choice for more New Zealanders – by reducing the upfront cost of electric, hybrid and fuel-efficient vehicles when sold in New Zealand for the first time.

“Discounts will be financed in the fairest way possible – by putting a small fee on the highest polluting vehicles when they’re sold in New Zealand for the first time.This means people will still have choice, while contributing to the task of cleaning up the vehicles coming into New Zealand.”

Vehicles already registered here would be exempt when on-sold in the second-hand market (about 70% of vehicles sold annually).

The two policies in the plan are the “clean car discount and the “clean car standard”.

The discount policy is aimed at reducing the cost of low emission vehicles – offering discounts for them and placing fees on high emission vehicles at the point of sale.

The “clean car discount” could start in 2021 when the road user charges (RUC) exemption for EVs is due to expire.

The “clean car standard” is a vehicle fuel efficiency standard requiring importers to reduce the average emissions of new and used vehicles they are bringing in, meeting an annual emission target likely to be phased in.

From 2021, vehicle importers would have to report emissions of the vehicles they import, then in 2022 the average emission target would be 161 grams of carbon dioxide per kilometre with stricter targets set annually to reach 105g CO2/km in 2025.Targets beyond that year would be established by future governments.

Such changes would stop more than five million tonnes of climate changing gases entering the atmosphere and make a major contribution to meeting New Zealand’s climate targets, Genter says, adding benefits would flow into the second-hand market too.

She says the plan could save NZ more than $3.4 billion in fuel and bring in excess of $6800 fuel savings over the life of an average vehicle.

Distributors and importers could group to balance their C02 levels – for example; the Giltrap Group could partner one of its supercar brands with a brand that predominately imports small or electric cars.New car distributors could also essentially “borrow” future emissions cuts, a way of recognising steps in technology are made every five to 10 years.

Years where the company undercuts the average could also be banked for future years.

Distributors and used vehicle traders will be supplied an online tool to assist in calculating their levels; they will be required to submit data on the fleet they sold each year to the NZ Transport Agency for verification.

While utes make up the bulk of the new vehicle fleet, the government appears convinced this will mitigate itself over time – noting quotes from Toyota that it will be “electrifying” every model by 2025, and that Great Wall is set to launch an electric ute in New Zealand.

EV advocacy group Drive Electric hopes to see the consultation process move quickly on the Government’s proposed “clean car” plan and the feebate style scheme introduced “sooner rather than later”.

The group has long pushed for such a plan and Drive Electric chairman Mark Gilbert says it’s a great step forward.

“It’s good to have some sort of emissions protocol in New Zealand as we’ve never had this.

“A lot of people don’t really know what sort of emissions their vehicle produces – whether clean or dirty – so an education process could be put in place.

“Perhaps it could be part of the warrant of fitness process every couple of years.”

Gilbert says most car companies will already have an idea of their vehicles’ emissions because they have to comply with standards and policies in other countries.

“It’s more the older fleet – five or six years-plus – that might need a green or red card.”

Gillbert says the “clean car plan” could help people decide what their next car will be.

He believes fringe benefit tax (FBT) still has relevance in coming discussions, as well as general depreciation.

Servicing costs may also need to be considered as EVs generally have far fewer moving parts and therefore reduced maintenance or servicing requirements.

Gilbert hopes to see the consultation process move quickly so that the policy can be introduced as soon as possible.

Mercury chief executive Fraser Whineray says the proposals offer support and encouragement for EV uptake and de-carbonisation of the national fleet.

“The electricity sector is ready,” he says.

“New Zealand has enough renewable electricity generation already consented to power the entire light vehicle fleet.”

Whineray says the proposals benefit Kiwi drivers, as powering EVs with renewable electricity at an equivalent of 30c per litre compared with petrol will significantly reduce household energy costs.

“Research shows that the overwhelming majority of New Zealanders see electric vehicles as the way forward, with almost half of adult New Zealanders considering purchasing an EV in the next two years.These new proposals will help car buyers make the best choices.”

Vector is ready for the switch, already trialling multiple 50kW rapid EV chargers across Auckland to cater to the region’s growing fleet of EVs and to build understanding of how charging technology interacts and impacts on the electricity network, its chief networks officer Andre Botha says.

It has also invested in software management systems to help reduce the impact residential EV chargers have on peak demand, and is exploring the potential of vehicle-to-grid (V2G) and vehicle-to-home (V2H) chargers.

EV seller Martin Harwood of Harwood Cars is concerned New Zealand may be “sitting around” for two years to implement the plan while other countries scoop up EV stock.

He would rather it takes effect as soon as possible.

The Energy Efficiency and Conservation Authority (EECA) welcomes the move, saying it could be a major step for the transport sector and for transitioning New Zealand to a low-carbon economy.

Toyota New Zealand chief executive Alistair Davis says it’s an encouraging step towards reducing New Zealand’s automotive carbon emissions.Davis, who chairs the Sustainable Business Council, says he will be reviewing the proposals in detail and welcomes the consultation process.

The Motor Industry Association (MIA) says it welcomes sensible discussions on ways to make vehicles cleaner and greener.

The new car sector will work constructively with the Government on what it believes are the best mix of policies to achieve that outcome, MIA says.

MIA chief executive David Crawford says that while the industry doesn’t agree with all the Government’s proposals, it is keen to ensure that it is successful in reducing CO2 emissions from the light vehicle fleet.

He says the MIA is also disappointed to see that a sliding scale FBT regime and better depreciation rates are not up for consideration, as these two policies in combination with a clean car discount, would have a huge impact on accelerating the uptake of lower emission vehicles.

Wellington mayor Justin Lester backs the proposals.

“Every other OECD country has fuel efficiency standards except New Zealand, Russia and Australia.It has been very effective at driving down emissions and ensuring a wider range of low emission vehicles is sold.”

Genuine Vehicle Imports (GVI) group general manager Hayden Johnston says it’s great that New Zealand is following the lead of other countries successfully running a feebate system that is tried and proven, and has dramatically increased the number of EVs in their national fleets.

“A generous subsidy for new EVs and PHEVs will encourage manufacturers to offer more of their model range in New Zealand and we will hopefully step outside the clutches of Australia’s anti-EV influence,” he says.

“Used sales will also benefit dramatically as the rebate will not only be a cash incentive but can actually enable some people to get into a cleaner and safer vehicle than they normally would using the rebate amount as a deposit on finance.

“My only concern is that if passed and a firm date is announced, how far out will people stop buying and wait until making their new vehicle purchase?”