Feebate success could rely on EV supply

This story first appeared in the May issue of EVtalk – CLICK HERE to download the magazine FREE

A proposal to introduce “feebates” on imported vehicles could be disrupted by a lack of electric vehicles, dealers say.

In an effort to reduce carbon emissions, The Productivity Commission is proposing to introduce extra fees on imported gas guzzling vehicles, while offering rebates low-emission petrol vehicles and electric vehicles.

A fuel economy standard would be needed to make the scheme work.

Genuine Vehicle Group (GVI) general manager Hayden Johnston says the group was involved in consultation with a government representative about the “feebates” proposal a few months ago.
He doesn’t think the proposal would hit his business too hard.

“If the Government implemented something like this it needs to be user-pays – at the time of registration,” he says.

“That’s a more guaranteed way to collect it rather than at the border.”

However, he notes in certain vehicle segments, there are limited electric options.
“People driving high emission vehicles are usually doing that for a reason, often because it’s fit for a purpose.

“I think we’re ten-plus years away from having a viable EV model for every application, like utes, SUVs and vans.
“I don’t think we’d bring in more EVs as a result of this. We’re trying to do that regardless.”

Farmer Autovillage group managing director Michael Farmer says the Tauranga-based new and used vehicle dealership would “do our best to adapt” if the feebate system is implemented.

“So long as it’s a simple and easy to understand system – that’s the key to it.”
He believes the dealership, which also caters for electric vehicles and plug-in hybrids, would be “relatively balanced”.

But Farmer says New Zealand doesn’t have enough EVs yet to centre a feebate system around them.

“I think introducing it before 2025 would be crazy.”

Farmer says the tipping point for EVs in New Zealand will probably be around 2022-2025, so the system could be implemented after that.

“The tipping point will be when someone walks into the showroom who would never have considered an EV before, compares the price of a petrol vehicle with an EV and buys the electric,” he says.

Auto Court in Dunedin imports both used electric and petrol/diesel powered vehicles, and its family ownership is uncertain just how the feebate proposal would affect the long-running business.
Director Nelson Cottle says he will be interested to see how the scheme might look if and when it becomes reality.

However, Cottle acknowledges the dealership is struggling to get good used electric stock from Japan now because of high demand world-wide, particularly for Nissan Leafs.
Toyota New Zealand chief executive Alistair Davis says the greatest impact will be if the scheme influences demand for vehicles outputting less emissions.

“Overall the objective of the scheme is focused on reducing vehicle emissions, which is a primary focus for the automotive industry, and in-line with Toyota’s national and global objectives.
“The proposed scheme also supports our expansion of hybrid vehicles within our range, and plug-in hybrid models like the new Prius Prime.  A feebate could potentially provide better visibility to the end customer and increase the importance of emission levels when considering a vehicle purchase.”

Tradeable credits?

Another issue that could impact how importers bring in cars is a “tradeable credits scheme, which is reportedly being worked on by the Ministry of Transport.

Imported Motor Vehicle Industry Association (VIA) chief executive David Vinsen says his understanding of the proposal is it would be used to influence which models importers are bringing into the country.

“If one importer was bringing in a whole bunch of Nissan Leafs that are way below the maximum [fuel] average they would get credits that have a tangible value.

“They could then be sold on to another importer who wants to bring in a Hummer.”
However, the dealers spoken to were reluctant to speculate on a tradeable credits scheme until they knew more about it.

Toyota NZ was also keen to find out more.

“Our net vehicle emissions across new vehicles sold is ok, but the introduction of more hybrid vehicles will bring this down minimising any tradeable debt,” Davis says.

Industry impact

Whatever happens with the feebates and tradeable credits proposals, Vinsen says the changes will influence which vehicles come into the country.

“It’s going to skew the model range available.”

Motor Industry Association chief executive David Crawford is welcoming debate on the issue, spurred on by the Productivity Commission’s report.

“When it comes to transport, New Zealand is a technology taker. How we leverage the importation of low carbon technological innovations is important, especially given the high volume of old imported vehicles that are on average one to two generations behind technologies found in new vehicles.”

Associate transport minister Julie-Anne Genter acknowledges discussions are taking place.
“I’ve asked officials to look at a wide range of options to make low-emission petrol and electric vehicles more affordable and accessible to New Zealanders.

“This will include looking at the options put forward by the Productivity Commission.
“Officials will engage widely with the motor vehicle industry and public on these all of issues before any policy decisions are made.”