EV market set to soar

New Zealand’s EV market will experience exponential growth from 2021 with the government beginning to implement carbon reduction policies.

The country’s Labour and Green party coalition will drive long-term EV sales growth as they will likely improve the incentives offered for EV adoption in 2021 and drive New Zealand to lead the Asia region by 2029, a Fitch Solutions report says.

The EV push is expected to come from prime minister Jacinda Ardern’s call for all government departments, agencies and ministries to exclusively buy EVs, geared towards making the public sector carbon neutral.

That means nearly 16,000 vehicles in the government’s fleet will be replaced by 2025.

Fitch Solutions has revised its EV sales forecast as a result to a 64.4% average annual growth rate which was previously set around 30%.

It expects EV sales to reach 32,690 units in annual sales by the end of 2025, with battery electric vehicle (BEV) sales taking about 80% of that.

Fitch believes EV sales could reach nearly 50% of total vehicle sales in 2029 if a Clean Car plan including a feebate scheme is introduced.

Few EV incentives are provided at present, including a road user charge (RUC) exemption until the end of December 2021.

Hydrogen fuel cell EVs (FCEVs) will gain more support into the 2020s, Fitch Solutions adds, particularly as New Zealand aims to reach 100% renewable energy by 2035 and have a carbon-neutral economy by 2050.

Fitch Solutions expects New Zealand’s vehicle fleet will expand at a 2.5% average annual rate during 2020-2029, reaching about 4.7 million units by the end of 2029.

The report expects New Zealand’s FCEV market will follow Australia and initially comprise mainly FCEV trucks and buses, with the first due in 2021.