Govt announces Clean Car Package to drive down emissions by increasing uptake of low-emission vehicles

The Government is taking action to increase the uptake of low-emission cars by implementing rebates for electric and plug-in hybrid vehicles.

In a press release on Sunday morning, the Government announced its Clean Car Package, in line with the advice of the Climate Change Commission, to drive down New Zealand's emissions. The package includes a range of measures to help New Zealand meet its 2050 carbon neutral target.

The country is "playing catch up internationally" due to our lower uptake of electric vehicles (EVs), Transport Minister Michael Wood said on Sunday. New Zealand's monthly registrations of EVs are around half the global average - and sales are well below the 50 percent of monthly purchases seen in some European countries.

He noted the Government has already committed to policies that will make a difference to New Zealand's transport emissions, including the Clean Car Import Standard, decarbonising the public transport bus fleet, and revitalising rail - "but we have to do more".

"A discount on electric, hybrid and low-emission vehicles, funded from a fee on higher-emitting ones, is the best policy to increase low-emissions vehicle uptake in New Zealand," he continued.

"It's a common policy overseas, a recommendation of both the Climate Commission and the Productivity Commission, and is supported by the likes of the Motor Industry Association - it's time to get moving with it."

Under the Clean Car Package, the Government is offering: 

  • new rebates for electric and plug-in hybrid vehicles starting July 1, with up to $8625 for new vehicles and $3450 for used
  • chargers every 75km along most state highways to give Kiwis confidence to go electric
  • nearly four times the funding for the Low Emission Transport Fund by 2023 to continue to grow the nationwide EV charging network and support other low-emission refuelling networks
  • an Electric Vehicle Buyers Guide to help guide potential buyers
  • the establishment of an electric vehicles sector leadership group in the coming weeks to help develop policies and increase uptake
  • and the establishment of a proposed Sustainable Biofuels Mandate to prevent over a million tonnes of emissions while Kiwis switch over to electric.
Govt announces Clean Car Package to drive down emissions by increasing uptake of low-emission vehicles
Photo credit: Supplied

The Clean Car Discount will make it cheaper for New Zealanders to buy electric and low-emission vehicles. It's understood the initiative will prevent up to 9.2 million tonnes of carbon dioxide emissions and will help with the upfront cost of switching to an EV, with Kiwis getting up to $8625 back on their purchase.

Some changes have been made to the policy proposed last term, Wood said. Only safer models and vehicles under $80,000 are eligible for rebates, which will begin from July 1.

Fees on higher-emitting vehicles to help fund the scheme won't begin until January 1, 2022. The rebates will also expand from January 1 to include low-emission vehicles, not just electric and plug-in hybrids.

"Importantly the policy only applies to new and used cars arriving in New Zealand, so the existing second-hand market of cars that lower income families tend to purchase from will not be affected," Wood said.

Govt announces Clean Car Package to drive down emissions by increasing uptake of low-emission vehicles
Photo credit: Supplied

EV chargers are now available, on average, every 75km along most state highways to ensure Kiwis have the confidence to go electric, he continued. 

"The Government has been investing directly into charging facilities through the Low Emission Transport Fund."

As part of Budget 2021, the Government is increasing its investment in the Low Emission Transport Fund by a maximum of $25 million per year by 2023/24. Other projects using low-emission fuels, like biofuels and hydrogen, will also now be eligible for funding.

Wood said the proposed Sustainable Biofuels Mandate will help to reduce emissions from cars, trucks, ships and planes by 1.3 million tonnes until 2025 as zero-emissions options are developed.

"It'll also help us create jobs to support our economic recovery through encouraging a local industry." 

Govt announces Clean Car Package to drive down emissions by increasing uptake of low-emission vehicles
Photo credit: Supplied

Climate Change Minister James Shaw said cutting emissions from transport is vital to addressing the climate crisis.

"Increasing the number of electric, hybrid and low-emission vehicles is a huge part of the work we are doing to build a low carbon Aotearoa in which people have clean, climate-friendly ways of getting around," he said on Sunday. "In their final advice to the Government, the Climate Change Commission said we need more low-carbon transport options that put our communities on the path to net-zero carbon emissions by 2050."

However, Shaw acknowledged due to the additional cost, a low-emission vehicle can be out of reach for many families. He believes the Clean Car Discount will help to make EVs and plug-in hybrids more accessible to those with lower incomes.

"[The discount] will ensure more families can enjoy the benefits of low-emission vehicles and their lower maintenance and running costs. Reducing the cost of electric, hybrid and low-emission vehicles will also stimulate the second-hand market, so in the years to come, even more people can access low carbon transport options," he said.

Consultation on the Sustainable Biofuels Mandate is open until 5pm on July 26, 2021 and submissions can be made here.

An Electric Vehicle Buyers Guide is available here.

More details on the Clean Car Discount:

  • Waka Kotahi New Zealand Transport Agency (NZTA) is administering the Clean Car scheme and will issue rebates and collect fees directly with the vehicle purchaser, not vehicle dealers.
  • Waka Kotahi will issue rebates for eligible EVs and plug-in hybrid vehicles first registered on or after July 1, 2021. Vehicles ordered or bought prior to July can still receive a rebate if buyers delay registering the vehicle to July 1
  • in 2022, a set of smaller rebates will be added for vehicles that cannot be plugged in, where they fit within a low CO2 emissions limit.
  • to receive the rebate, buyers of an eligible car will be able to visit Waka Kotahi online at Owners will be asked to supply their bank account number and matching proof of vehicle ownership. All figures quoted include GST
  • vehicles with less than a three-star safety rating as listed on the RightCar website are not eligible for the Clean Car Discount (
  • Clean Car Discounts are not available for vehicles with a purchase price (including on-road costs) of $80,000 incl GST or higher
  • each year the level of rebates and fees may be adjusted to ensure the scheme is self-funding
  • vehicles which have an emissions rating in the middle of the emissions target range will not attract a fee or be eligible for a rebate
  • from 2022, car dealers will be required to clearly display CO2 emissions and fee/rebate information on vehicles for sale and online so buyers can make informed purchasing decisions
  • the Clean Car Discount supplements the Clean Car Standard, which was announced in January 2021. The Standard will require vehicle suppliers to import more fuel-efficient vehicles every year, starting in 2022
  • businesses will include the discount or fee when calculating Fringe Benefit Tax (FBT) and depreciation for vehicles they buy. This change will make buying an EV even more attractive to businesses.