No mercy for Ford Ranger buyers as government pushes New Zealanders into electric and hybrid vehicles

The revised Clean Car Discount will double the fees charged on New Zealand’s two most popular vehicles and exclude almost all petrol vehicles, as the Government attempts to bring the scheme’s costs into balance. 

It hopes that doing so will not slow progress being made in the decarbonisation of the country’s light vehicle fleet. The Climate Change Commission recently said this was one of the few areas in which emissions reductions were ahead of expectations.  

In its draft advice for the second emissions budget, released last month, the Commission said uptake of low-emissions vehicles had grown rapidly since the introduction of the Clean Car Discount in 2021.

The Commission and Ministry of Transport hadn’t expected electric vehicles to make up over 10% of new vehicle registrations until 2025 and 2028, respectively. 

That milestone has already been passed with battery powered vehicles making up almost 12% of new registrations this year. Over 43% of all light vehicles — cars, utes, and vans — registered the past three months were hybrids or battery powered.

“This highlights the opportunity for electric and hybrid vehicles to deliver significantly higher and faster emissions reductions than previously thought,” the Climate Change Commission said. 

It wants the government to keep its foot on the pedal, as incentives and subsidies help consumers overcome the upfront cost barrier, but success comes with costs. 

The rapid uptake of low-emission vehicles has almost exhausted the $300 million Crown grant used to establish the scheme. As of the end of 2022, the scheme had collected $118 million in fees and paid out $288 million in rebates. 

Waka Kotahi, the transport ministry, said the scheme ended the year with a negative balance of $193 million and estimated it would run out of funds entirely last month. 

And so, the Crown has tipped in an extra $100 million in grant money and Transport Minister Michael Wood has adjusted which vehicles are eligible for fees and rebates. 

The upshot is that fees on a Ford Ranger and Toyota Hilux—NZ’s most popular new vehicles—will almost double and no petrol-only cars will get the subsidy. 

Previously, the lowest emission petrol vehicles, such as a Toyota Corolla or Mazda Demio, were eligible for a small rebate. 

This still had the effect of reducing emissions in the light vehicle fleet, as it may have encouraged consumers to choose a more efficient vehicle even if they couldn’t manage an electric one. 

Now, eligibility has been narrowed to only imports which emit less than 100 grams of CO2 per kilometre, down from 146 grams in the original scheme.

The average exhaust emissions of newly registered vehicles has dropped from roughly 190 grams per kilometre, prior to the clean car discount, to about 150 grams today. 

What will it get you? 

In broad terms, hybrid-petrol vehicles emit between 70 and 140 grams, most petrol vehicles range between 140 and 200, while diesel vehicles sit between 200 and 260.

The Toyota Prius is an example of a popular hybrid, and the Nissan Leaf was the most common electric vehicle — although it was almost matched by the Tesla Model Y and 3 combined. 

Popular petrol cars, previously eligible for a rebate, included the Suzuki Swift and the Mazda Axela. But at least there are alternatives available, not so for the Toyota Hilux and Ford Ranger.

These two vehicles will now attract a more than $5,000 fee, despite there being almost no equivalent hybrid or electric vehicles to buy instead. These are workhorse utes often bought by farmers and construction workers. 

There is one electric ute available in New Zealand, a Chinese make called LDV ET60, but low-emission versions of well-known brands are still years away. 

Simeon Brown, the National Party transport spokesperson, said the clean car discount would be axed if his party were to win the October election. 

He said the scheme was subsidising buyers who could already afford low-emissions vehicles by taxing people who don’t have the luxury of a choice. 

“That has been paid for by a significant subsidy by the taxpayer, and by taxes on our farmers and tradies who now are going to have to pay more under Michael Wood’s scheme.” 

National’s plan to fast-track electrification of the NZ economy by building energy infrastructure would be enough to encourage rapid uptake of electric vehicles, without requiring subsidies, it says. 

Labour’s Michael Wood said this was “laughable” as discount schemes had been proven to be the best way to get people to buy cleaner vehicles.  

“We know from research that the upfront cost is the biggest barrier to people getting into cleaner vehicles. So, you will not make the progress that we have made without a discount scheme.” 

Waiting on Japan 

The Climate Change Commission has made recommendations that support both parties’ perspectives. 

On one hand, it has emphasised the need to decarbonize light vehicles and encouraged the government to reduce emissions at their source, rather than offsetting them with forestry. 

But it also said the main constraint on EV uptake between 2026 and 2030 would be sufficient vehicle charging infrastructure – not access to low emissions vehicles.

“Charging infrastructure, both public and private, is crucial to the success of the EV transition. If the network rollout leads EV uptake, it has the potential to support consumer demand. If it lags, it has the potential to dampen EV uptake,” it said. 

Discussion of the Clean Car Discount often revolves around incentives for consumers, but it also aims to incentivize manufacturers to get affordable, clean vehicles to the NZ market. 

This could be a serious challenge. The Climate Change Commission imagines all new vehicles, and 40% of the national fleet, will be electric by 2036. 

However, we largely buy second-hand cars imported from Japan which is not adopting electric vehicles as quickly as Aotearoa. The new cars entering that market today will become the used cars we buy after 2026. 

In 2021, only 45,000 new electric vehicles were registered in Japan but the Climate Commission hopes that 55,000 used electric cars will be imported in 2030. 

“Not all these EVs will be available for export as secondhand vehicles and there is an increasing competition from markets like Australia,” it said. 

Households are likely to need government support to buy new electric vehicles in the latter half of this decade, if there is insufficient supply of secondhand right-hand drive cars globally.