Government announces proposed clean vehicle incentives

The Government has announced a proposed incentive scheme to push Kiwis into cleaner, low-emission vehicles. 

The "feebate" scheme would lower the cost of electric vehicles, hybrids and lower emission cars, while adding fees onto the cost of high-emissions vehicles like utes or SUVs.

Under the new scheme, which would come into force in 2021, a new Hyundai Ioniq would be $8000 cheaper, while a Ford Ranger double-cab ute would cost $2750 more.

The higher costs will only apply to vehicles when they're sold in New Zealand for the first time, so new vehicles or imports are covered. 

Associate Transport Minister Julie Anne Genter said most New Zealanders would be surprised to know everyday use of cars, utes and vans is contributing the majority of our transport emissions.

"This is about making more efficient cars more affordable and available, that's something we need to do if we're going to fight climate change.

"Once we buy these cars they're on the roads for 20 years so it's going to lock in a lot of emissions the cars we buy over the next five years."

A woman in front of a screen that has cars on it.
Julie Anne Genter Photo credit: The AM Show

The suggestion big polluters being needed for the farm doesn't carry water for her, she said analysis done on the policy shows most people affected will live in urban areas. Besides, if you're buying for the farm, there are already plenty of discounts applied.

 "These are brand new cars that are nearly $50,000 and if you are using it for work you already get a tax write off for your vehicle, so you're probably not paying tax on the vehicle.

"You have some tax advantages for buying these, and that's part of the reason they're so popular right now.

"We want to provide the tax advantages to the vehicles that are going to reduce pollution and save Kiwis money."

One ute, the Nissan Navara, will not attract a fee under the scheme and the Toyota Rav4 also won't have one.

Hybrid Rav4s sold new in 2021 will have a discount of $2800 under the proposals.

Deputy Prime Minister Winston Peters said the reality is New Zealand can't continue with its current lack of any kind of incentive.

But he's sure it's not going to affect rural people who say they need bigger vehicles.

"It won't affect 70 percent of the vehicles in this country for a start, and certainly not the 400,000 plus that are out serving rural New Zealand, unless you want some big guzzler you don't need, they won't be affected at all."

The fees won't affect any vehicles sold in New Zealand that have already been registered here, which accounts for 74 percent of the sales in the country.

Motor Industry CEO David Crawford told The AM Show the policy made sense.

"A feebate or this clean car discount, if you want to influence people in what they buy we believe that's the best way to do it."

Wellington Mayor Justin Lester told Newshub he's excited for the scheme, which would bring New Zealand in line with the rest of the OECD.

"Every single country in the OECD except for New Zealand, Russia and Australia have standards around clean emissions vehicles, so we're the outliers and we need to become the norm."

The Government also announced a proposed new "Clean Car Standard" alongside the discounts, which would require importers to reduce the average emissions of vehicles they're importing.

Consultation on the scheme will run from July 9 to August 20.