Lower EV RUC suggested in automotive submission

A $60 per 1000km road user charge (RUC) for EVs rather than $76, and a $42 per 1000km RUC for plug-in hybrids instead of $53 – all GST inclusive. 

That’s proposed in a joint submission by six automotive industry representative organisations to the parliamentary transport and infrastructure select committee on the RUC (Light Electric RUC Vehicles) Amendment Bill.

Motor Industry Association (MIA) chief executive Aimee Wiley presented the submission on behalf of all six signatories including the Motor Trade Association, New Zealand Automobile Association, EV advocacy group Drive Electric, the Imported Motor Vehicle Industry Association (VIA), and the Vehicle Testing New Zealand Trust.

Wiley says the combined six organisations effectively represent the wider automotive industry and motorists.

“The reason for the submission is that we believe every motorist has a responsibility to contribute their fair share toward New Zealand roading costs,” Wiley says.

 “EVs are no exception to this. However, we also believe that every motorist has the right for their share or contribution to be fair.”

Wiley says all six entities are concerned at the RUC rate being applied to EVs from the April 1 this year as “not fair or equitable”.

“We understand and recognise that fairness and equity are important considerations for the government in introducing electric vehicles to the road user scheme, because we currently have two very different tax systems for road user charging on the one side and Fuel Excise Duty on the other, and petrol consumption varies significantly.”

Wiley says the introduction of emerging technologies in the hybrid space creates some unique challenges for the tax system.

“Linking the RUC rate to the current light vehicle diesel RUC rate will have the unintended consequence, we believe, that EVs will be contributing more to the National Land Transport Fund than the equivalent petrol cars.

“We believe this will create a further disincentive and significantly impact the uptake in demand for EVs.

“And here in New Zealand, consumer perception has already started shifting towards penalty on a plug.

“This is further compounded on plug-in hybrid vehicles that are contributing to both the Fuel Excise Duty (FED) and Road User Charges.

“EVs play an absolutely critical role in New Zealand for us to achieve our climate targets, reducing our health impacts for Kiwis from air pollution and the contribution to a productive growing economy.”

Wiley says the urgent request to the select committee is to support RUC rates to be adjusted as a temporary and more equitable solution until such time as the entire light vehicle fleet can move to a RUC or distance-based tax system.

“I understand this is a priority for the government, but it is industry’s opinion that this will take years, not months. And we are very, very concerned about what might happen in the year or two years to EV demand in this country. And if demand slips further than it already has, consumers won’t have choices.”

The committee heard that some imported used PHEVs aren’t getting even 15km from their battery.

 Wiley says submitters felt that $42 is probably still too high for used PHEVs ”but you’ve got to administer it, you’ve got to draw a line somewhere”.

She says rather than try to fit the diesel RUC option, petrol and electric could be matched temporarily.

“We believe that’s a pragmatic and simple solution that could be easily administered as a temporary option.

“Saves problems for everybody. It’s not ideal, it’s not perfect but no system is. And then we can address other options in another system when we’ve got the time to do it properly and work together, industry and officials, and transition the light fleet to something that will be fantastic for New Zealand.”