National leader Judith Collins describes electric car rebate as 'bizarre, counterintuitive' due to coal spike

National leader Judith Collins believes the soon-to-be electric car incentive scheme is "counterintuitive" because coal use is on the rise in New Zealand. 

In a bid to increase the uptake of electric vehicles (EVs), the Government announced on Sunday it will give rebates or discounts of up to $8625 for newly imported electric and plug-in hybrid vehicles from July 1. 

Used EVs will be able to fetch discounts of up to $3450. The discounts will only apply to vehicles below $80,000 and the vehicle must have a three-star safety rating. The second-hand market will not be affected. 

To pay for the discounts, the Government will tax newly imported vehicles with high emissions profiles - vehicles like utes. The fees on higher emitting vehicles to help fund the scheme won't begin until January next year. 

The policy announcement came off the back of the Climate Change Commission's final advice to the Government. To meet the Zero Carbon Act's emissions targets, it said New Zealand must stop importing petrol vehicles by 2035, since transport makes up almost 33 percent of emissions. 

Collins has vowed to "reverse" the incentive scheme policy because she believes it unfairly targets farmers who need vehicles like utes for work. 

"National would reverse this ridiculous situation that the Government has put a lot of Kiwis into where people who have to have a ute for their work or want to have one for their work are now being told that they will get to pay for people who get choices around whether or not they have an EV," she told Magic Talk. 

"It is a tax, just like Labour said they wouldn't do - they're now doing it again, revoking all those promises they made and just going and doing exactly what they want to do."

Collins described it as "counterintuitive" because coal use is on the rise. The latest data from the Ministry of Business Innovation and Employment (MBIE) shows coal used for electricity had more than doubled from the previous quarter to nearly 430,000 tonnes.

"That has a lot to do with the oil and gas ban on exploration because natural gas cannot be relied on to top up and take the peak loads, so now there is more coal coming in and strangely enough we've got plenty of coal in New Zealand but for some reason it's apparently better to buy Indonesian coal, ship it over, and train it over to Huntly," said Collins. 

"The entire thing is bizarre, it is totally counter-intuitive, and the Government has not a clue as to what it's doing on this."

National leader Judith Collins
National leader Judith Collins. Photo credit: Newshub / Zane Small

Energy Minister Megan Woods has previously dismissed claims the ban on new oil and gas exploration has led to an increase in coal use. Woods said in March it was because of tight supply of gas production at the Pohokura gas field and dry weather conditions, which impacted on hydro lake inflows.

Prime Minister Jacinda Ardern acknowledged the issue when asked about it in Parliament last week. 

"One of the issues that we're facing, of course, is that whilst we have a very high rate of renewables in New Zealand, in a hydrological dry year, we have a major problem, and so we have to look at options to try and overcome that."

MBIE's NZ Battery Project has been set up to tackle the 'dry year problem', with $30 million to investigate a pumped hydro scheme at Lake Onslow - a man-made lake in Otago, which could be capable of storing the same amount of all of New Zealand's existing hydro schemes combined. 

Depending on the findings of the feasibility study, the Government has committed up to $70 million for engineering design and further field work. It could help fill the gaps to create power grid stability in dry seasons.  

MBIE predicts construction could begin in 2024.

Speaking to The AM Show on Monday, Ardern also acknowledged that the market hasn't delivered for farmers seeking eco-friendly utes. 

Prime Minister Jacinda Ardern
Prime Minister Jacinda Ardern. Photo credit: Newshub / Zane Small

"We absolutely acknowledge with utes at the moment the market is not meeting the needs there," Ardern said. 

"We're hoping within the next 12 to 24 months the likes of Toyota are talking about EV utes. My hope is then that people might delay their purchase in order to start building a market in New Zealand where you can access those vehicles, because it is a problem."

Motor Industry Association chief executive David Crawford said on Monday manufacturers of current popular makes of utes have confirmed they will not have electric utes coming to the market in the next 12 to 24 months.

"One or two brands are working hard to get in a fully electric ute, but our expectation is plug-in hybrid (PHEV) utes might become more widely available by 2025 and full battery electric (BEV) utes after that."

Ardern also dismissed criticism that capping the discounts at $80,000 is unfair. 

"We've capped it out at $80,000 and the reason for that is when you start buying a car over that price point, you're less likely to be affected by the price point. I don't think that's an unfair assumption to make," she said. 

"They're probably in a better position to be able to pay for it. We're talking about vehicles that are more than $80,000...There are a whole range of fantastic EVs that sit below that price point. It is just about us trying to be smart about how we're applying this."

Collins said a looming problem is EV battery waste. 

"That is something that no manufacturer has yet been able to deal with successfully," she told Magic Talk. 

"I've certainly raised it with Tesla when I was in the [United] States and meeting with them. They assured me that at some stage they'll find a solution. Well, we haven't got it yet."

She said the Government needs to rethink the policy. 

"I think this is playing fast and loose with taxing the trades people, the farmers, people with more than one child, basically; people who need something bigger than a tiny car, they are now being told 'you get to pay for people who can choose to have a second or third car as an EV'."