Clean Car Package: Concerns EV subsidy could be cancelled out as overseas suppliers raise prices

The Government's attempt to lower the prices of electric vehicles may have backfired already.

From next month, rebates will be offered on new EVs, but Kiwi importers say that could be cancelled out because their suppliers overseas are raising prices, anticipating a surge in demand.

"Japan is our primary supply market for pre-owned EVs, and after the subsidies were announced [on Monday], we saw prices steadily rising in Japan," says GVI Electric general manager Hayden Johnston.

Off-the-yard sales have ground to a halt at GVI Electric in Penrose, but Johnston is confident he'll have a bumper July.

"We've taken a huge number of deposits for July delivery. So we haven't sold another vehicle since the subsidies were announced, but we'll have, or will hopefully have, a large month of sales in July."

He's hoping to sell 50 percent more EVs than usual next month when the Government's Clean Car Discount kicks in.

But he's finding demand is outstripping supply, and the moment news about the subsidy reached his suppliers in Japan, the supplier's prices went up.

It means the rebate sweetener might not be so sweet.

"We're expecting the pricing locally to have to go up to meet the price rises in Japan. So we anticipate, even with the subsidy applied, EVs will be the same price as they were prior to the subsidy being announced," Johnston says.

Michael Wood.
Michael Wood. Photo credit: Newshub.

Transport Minister Michael Wood says he's asked officials to keep an eye on the market as the Clean Car Discount gains momentum.

"The new and imported used vehicle market is very competitive, and I'm sure anyone attempting to distort market pricing will be called out," he says.

Johnston says another unfortunate side-effect of the rebate announcement is it's left early adopters pretty irate.

"We've had people at our door wanting their money back, wanting to give their cars back, blaming us for not being able to receive the subsidy. Obviously, something we were completely unaware of, unsure of the timing of," he explains.

But Wood says people would miss out, regardless of when a discount was implemented.

"No matter when we introduced the discount, there were going to be people who missed out, so it was better to bring it in as soon as possible."

The Government says some sellers are reporting a 20 percent rise in sales, and some companies, like Ford, have even brought forward new EV models for ordering since the scheme's announcement.

But EVs aren't the only vehicles having their moment. Utes always sell like hotcakes at Fieldays, but some exhibitors say last week there was more interest than usual, ahead of the new feebate charges being brought in next January.

Isuzu says the bell rang 211 times for ute sales in three days. And while Ford says it's too early to tell if buzz has translated into sales, it was all anyone could talk about.

"For sure, people visiting the Ford tent, the feebate scheme was definitely the hot topic, all day every day for the four days. People trying to get their head around it, what's this Ranger going to cost me for the next year," says Ford New Zealand's communications manager Tom Clancy.

The hot topic among ute owners is likely to get louder as 2022 approaches.

"Heading into Fieldays, and before the scheme was even announced, the demand for the Ford Ranger was already off the charts. I think we'll be able to tell before the end of the year, we'll certainly see a spike when people start realising this kicks in."