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Govt proposing to make clean cars cheaper

Hon Julie Anne Genter

Associate Minister of Transport
9 July 2019 PĀNUI PĀPĀHO


Govt proposing to make clean cars cheaper to tackle climate change

The Government is proposing to make electric, hybrid and fuel efficient vehicles more affordable so New Zealand families can choose a vehicle that’s better for the climate and their back pocket.

“The cars, utes and vans we use every day are also the fastest growing source of harmful climate pollution and account for nearly 70 percent of our transport emissions,” said Associate Transport Minister Julie Anne Genter.

“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 possibly - 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.

“New Zealanders have also told us they want more climate-friendly vehicles to choose from, so we’re also proposing that vehicle suppliers be required to import more fuel-efficient vehicles every year.

“Vehicles already registered in New Zealand would be exempt from these policies when on-sold in the second hand market – so more than 70 percent of vehicles sold each year won’t be affected by these proposals.

“These changes would prevent more than 5 million tonnes of dangerous climate pollution going into our atmosphere and would make a major contribution to meeting New Zealand’s climate targets.

“The benefits of these policies would flow on into the second hand market as more fuel efficient hybrid and electric vehicles are sold on.

“These policies are expected to save the country more than $3.4 billion in fuel and result in fuel savings of more than $6,800 over the lifetime of an average vehicle”.


The Government will consult from 9 July to 20 August on two new policies to improve fuel efficiency and emissions profile of light vehicles entering the New Zealand market

Light vehicles include small and medium cars, SUV, vans and utes. They do not include motorbikes or heavy vehicles like trucks.

The two policies are the ‘Clean Car Discount’ and ‘Clean Car Standard’.

The policies would only apply to new and used light vehicles entering New Zealand for the first time. They would not apply to vehicles already registered in New Zealand when on-sold. 74 percent of annual vehicles sales are of vehicles already registered and these would not be affected.

The Clean Car Standard is a vehicle fuel efficiency standard. It would require vehicle importers to reduce the average emissions of the vehicles they are importing (both new and used) by meeting an annual emission target. Emissions targets would be phased in gradually. In 2021, vehicle suppliers would be required to report the emissions of the vehicles they import, in 2022 the average emission target would be 161g CO2/km with stricter targets each year out to 105g CO2/km in 2025. Targets beyond 2025 would be set by future governments.

The targets would be weight adjusted so that smaller vehicles would have to meet stricter targets than heavy vehicles like utes.

The 2025 105g target is consistent with the average vehicle fuel efficiency achieved in the Japanese vehicle fleet in 2014 (Japan is our largest source of used imports). In 2018, the average vehicle imported into New Zealand emitted around 180 gCO2/km (2018).

The economic evaluation shows the benefits of the Clean Car Standard outweigh the costs 3 to 1. The majority of the economic benefits are to motorists who will save of $6,800 per vehicle, and $3.4 billion collectively over the lifetime of the vehicles affected. It is estimated that it would reduce emissions by 5.1 million tonnes.

The Clean Car Discount

The Clean Car Discount is a scheme designed to reduce the cost of low emission vehicles. The scheme offers discounts on low emission vehicles and places fees on high emission vehicles at the point of sale.

It is proposed that the Clean Car Discount begins in 2021 as the exemption on Road User Charges for electric vehicles is due to expire.

For the first year, in 2021, the government is proposing discounts of up to $8,000 for zero-emission new imported vehicles and a fee of up to $3,000 for new imported vehicles that emit in excess 250 grams of carbon dioxide per kilometre (CO2/km). For imported used vehicles the highest available discount would be $2,600 (for zero-emissions) while the highest fee is $1,500 in 2021.

Vehicles with a recommended retail price of over $80,000 would not be eligible for any discounts.

The economic evaluation shows economic benefits of the Clean Car Discount out weight the assumed cost 2.6 to 1. It is estimated that motorists would save about $5,200 per vehicle and $627 million collectively on fuel over the life of the vehicles affected.

Example fee and discount schedule in 2021

New vehicles

For new vehicle imports in 2021, this schedule would result in discounts of up to:

• $8,000 for electric vehicles (EVs)

• $6,800 for some plug-in hybrid electric vehicle (PHEVs)

• $4,800 for some hybrids

• $2,800 for some very fuel efficient vehicles.

Used vehicles

For used vehicle imports in 2021, this schedule would result in discounts of up to:

• $2,600 for EVs

• $2,300 for some PHEVs

• $1,700 for some hybrids

• $1,100 for some very fuel efficient vehicles.


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