The EV market tanked after the Government axed subsidies but 2025 is looking better, according to Fitch Solutions' BMI

Figures from BMI, part of Fitch Solutions, show the coalition government's removal of the Clean Car Discount and introduction of Road User Charges (RUCs) hit the electric vehicle (EV) market hard in the near term.

Due to the negative impact of the policy changes, the BMI analysts forecast New Zealand EV sales to decline by more than 64% this year, to 10,200 units.

This represents 11.4% of the passenger vehicle market. BMI used Motor Industry Association (MIA) figures for its research.

Despite the steep drop in EV sales, BMI thinks sales next year will grow by almost 55% to 16,600 vehicles, which would represent 16.3% of the total passenger vehicle market.

BMI said Chinese-made EVs like those from BYD and MG will play a significant role in driving market growth in New Zealand, due to their competitive pricing and value offering for cost-conscious customers.

National's pledge to deliver 10,000 EV chargers by 2030 around the country is also "crucial to sustain EV demand over the medium to long term" as it helps diminish range anxiety among owners of the battery-powered vehicles.

ChargeNet remains the main provider of EV charging stations, but it is facing competition nationwide from Open Loop, BP, and Z Energy.

Electric commercial vehicles (ECVs) is a slightly different story to passenger ones, BMI noted. After growing almost five fold from a low base in 2022, ECVs grew only slightly to 600 units in 2023.

That left the ECV market penetration rate at 1.4% of the total in 2023, but it could grow to 1.6% this year, with around 700 units being sold.

For 2025, BMI forecasts volumes grow by 104% to 1,500 ECVs, doubling the sales.

Whether or not New Zealand will go with its earlier target of banning imports of internal combustion engine (ICE) vehicles by 2040, and aiming for nearly all vehicles brought into the country to be EVs by 2035 remains uncertain.

In July this year, Transport Minister Simeon Brown said New Zealand would align its Clean Car Importer Standard with Australia, to ensure affordability of vehicles.

Across the Tasman, the Australian Capital Territory (ACT) has announced ICE cars will be banned by 2035. No other state or territory have yet to issue such an edict though, which could put the nation's net zero greenhouse gas emissions target by 2050 in jeopardy.