Matthew Hansen/Stuff
Electric vehicles like the MG4 will lose the Clean Car Discount next year, a move that could result in a huge amount more CO2 by 2030.
Drive Electric, local electric vehicle lobby group, has released new research showing the removal of the Clean Car Discount and weakening of the Clean Car Standard could result in between 100,000 and 350,000 fewer electric vehicles on New Zealand roads by 2030, and as much as 3 million tonnes of CO2. This means an alternative EV incentive scheme is needed to keep emissions down, one that doesn’t necessarily involve a ‘ute tax’.
The research, completed by Concept Consulting, also found that there could be increased costs to the economy of between $900 million and $3.5 billion, mainly from importing more fossil fuel.
At the moment, the Government has only indicated it intends to “adjust” the Clean Car Standard, with details of that yet to be announced. The research modeled two scenarios to represent the range of possible impacts; one where the Clean Car Discount is removed but the Standard stays in its current form, and another where the entire Clean Car Programme is removed.
Kirk Hargreaves/Stuff
The Clean Car Standard affects distributors, pushing them to lower their fleet emissions or face fines.
The former would result in approximately 100,000 fewer EVs on the road by 2040, which would in turn increase non-emissions economy costs by at least $900 million (mainly in importing petrol and diesel) and the cumulative emissions associated with increased combustion travel and usage would increase by at least 900,000 tonnes of CO2 by 2030.
If the entire Programme were to be deleted, as many as 350,000 fewer EVs as well as plug-in hybrids would be on the road by next decade, while non-emissions economic costs would rise by $2.7 billion, or $3.5 billion if the increased emissions are valued using Treasury’s recommended shadow carbon price. Finally, the cumulative emissions associated with increased ICE travel could increase to 3.0 megatonnes of CO2 out to 2030.
RICKY WILSON/STUFF
The electric bus depot is a significant step towards Auckland Transport’s goal of a zero emission bus fleet. (First published January, 2023)
Drive Electric Board Chair, Kirsten Corson says, “We understand the new Government intends to remove the Clean Car Discount by 31 December 2023. What this research shows is that there are costs associated with doing so, both to the economy and to emissions. The clear implication is that we need an alternative form of EV incentive.”
“EV incentives are simply an effective and comparatively cost-effective way to reduce emissions from transport. And they won’t be needed forever. As soon as EVs reach upfront price parity, they can be removed.”
This local research comes at the same time as European research showing decreasing EV incentives has resulted in an 84% sales drop – with the UK showing a particularly brutal tanking of new EV sales. It went from an increase of 186% in 2020 to just 15% in 2023 due to the removal of incentives.
It also pays to mention electricity in New Zealand is more than 85% renewable – in fact, thanks to a wet spring, in the last quarter of 2022, hydro dams, geothermal plants, wind and solar farms provided 94.7% of all power – the highest share since records began in 1974, according to Ministry of Business, Innovation and Employment data.
Matthew Hansen/Stuff
The Clean Car Discount isn’t just to ‘help rich people buy Teslas’, either. You can get plenty of EVs for under $80k, like the Ford Mustang Mach-E.
Corson added: “There are a range of different options we could consider here in New Zealand to create a fiscally neutral EV incentives scheme to encourage New Zealanders into EVs. These include adjustments such as:
- A staged withdrawal of discounts that provides consumers time to adjust;
- Reducing rebates and tightening eligibility; and
- Exempting certain categories of vehicle from fees (e.g. utes).
“There are other options too, including removing fringe benefit tax and accelerating depreciation for commercial fleets. Businesses buy 50-60% of new vehicles (and 60% of new EVs), and usually only keep them in their fleets for two to five years. This could be a great source of second hand vehicles. This model is being used in Australia, and so far is proving to be successful.
“We know the Government wants to electrify New Zealand, and intends to invest in public charging. This is essential work. However, we’re also going to need to accelerate demand for EVs to take full economic advantage of electrification. We are working with industry right now on solutions to EV incentives and look forward to discussing these with the Government.”
