The government has changed which vehicles are eligible for its Clean Car Discount scheme and will only offer rebates to imports that emit less than 100 grams of carbon dioxide per kilometre.
A similar policy change was originally planned to take effect in 2025, but has been brought forward as the scheme—which was supposed to be cost neutral—was running out of funding.
The Clean Car Discount scheme offers a rebate to buyers of low-emissions cars, funded by imposing a fee on buyers of high-emission vehicles.
However, there have been more electric vehicles being bought than expected, so the fees and rebates are not balancing out.
Last month, Toyota NZ chief executive Neeraj Lala told media there had been a massive increase in the sales of battery electric vehicles, which were eligible for the highest rebates.
Meanwhile, less vehicles were being subjected to the fees supposedly funding the scheme.
“It doesn’t have enough money, it’s as simple as that. It’s not sustainable. We’re going to see some changes and they will be gift-wrapped in a package that will be a surprise,” he said.
As predicted, Transport Minister Michael Wood on Monday announced the eligibility criteria for the rebate would be lowered to include cars that emit less than 100 grams of CO2 per kilometre, down from 146 grams.
“The scheme is facilitating an increase in the number of EVs entering the fleet we did not expect until 2027. As planned we are further targeting the scheme to maintain its success, and ensure it will be self-funding until its next review,” he said in a statement.
This will likely mean that only battery electric vehicles and plug-in hybrids will be eligible, ruling out most plugless hybrids and pure petrol cars.
Rebates for zero emission used import vehicles will increase from $3,450 to $3,507 and the Crown will increase the scheme’s repayable grant by $100 million in Budget 2023.
Wood said the threshold for fees would also be lowered, from 192 grams of CO2 per kilometre to 150 grams, and the charges would increase. This is likely to hit more vehicles like utes.
The scheme was now forecast to reduce emissions by 3.4 million tonnes by 2035.
“That’s an additional 50% out to 2035 over and above what was forecast when it started. It will deliver twice the emissions reduction forecast between the start of the scheme and 2025,” he said.
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