New Zealand Sees a 27% Drop in Electric Vehicle Sales
Less than one in four cars registered over the past few months have been electric.
The percentage of New Zealanders willing to switch to electric vehicles (EVs) has decreased significantly over the last three months, with less than 25% of new cars being electric, presenting a major challenge for the government to reach its climate goals.
Statistics from the Motor Industry Association (MIA) for the March period indicate a notable drop in new EV sales compared to the previous March.
Only 11,616 new vehicles were registered, marking a 27.4% decrease from March 2023 and a 44.7% decline from March 2022.
During the middle stages of the pandemic, EV ownership in New Zealand had been rising as consumers took advantage of incentives like a clean car rebate scheme, road user charges exemptions, and registration discounts offered by the previous government.
However, the removal of the clean rebate scheme by the new government on Dec. 31 resulted in a spike in sales during that month, likely due to buyers rushing to make purchases before the deadline.
This decision was part of the National Party’s campaign promises. Former Transport spokesman Simeon Brown argued against subsidizing EVs, deeming it unfair to other sectors of society.
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“Recent data reveals that between July 2021 and September 2023, over $500 million was paid out in rebates for new electric vehicles, burdening hardworking farmers, tradespeople, and taxpayers who have been bearing the brunt of these subsidies,” Mr. Brown stated.
“It’s evident that Labour’s Ute Tax and Clean Car Discount represents a reverse-Robin Hood scheme, taxing hardworking New Zealanders for the vehicles they require in order to fund others’ new car purchases.
Climate Minister Simon Watts expressed no concern regarding the deceleration in purchases, stating, “As a coalition, the government is resolute in achieving the 2050 net zero goal and our emissions targets.”
Aimee Wiley, CEO of the Motor Industry Association (MIA), suggested that the recent numbers also reflect the broader economic slowdown and higher interest rates in New Zealand, dampening consumer spending considerably.
Reductions for PHEV but not BEV
Despite the removal of incentives, the government acknowledged the need for some relief for drivers.
Prior to implementing new Road User Charges (RUC) for EVs starting April 1, a reduced rate of $53 per 1,000km, about two-thirds of the full RUC rate of $76 per 1,000km, was proposed for Plug-in Hybrid Electric Vehicle (PHEV) owners.
The MIA advocated for a greater reduction, arguing that this would result in PHEV owners paying more in road user charges than comparable hybrid vehicles.
In response, Transport Minister Simeon Brown announced a 50% reduction for PHEVs, set at $38 per 1,000km driven. In contrast, EVs are charged at $76 per 1,000km.
Mr. Brown stated that the changes aimed to create uniformity among all vehicles on the road.
“Plug-in hybrids, which run on electricity and petrol, have been subject to petrol taxes, but not at the same level as petrol vehicles. To ensure that plug-in hybrids do not double pay through fuel excise duties and RUCs, these vehicles will incur a reduced RUC rate,” he explained.
“This transition to RUC is about fairness and equity, ensuring that all road users contribute to maintaining and repairing our roads, regardless of the vehicle type they choose to drive.”
While the MIA welcomed the news regarding PHEVs, it expressed disappointment that the adjustments did not extend to fully electric Battery Electric Vehicles (BEV).
“Based on the average fuel consumption of new petrol hybrid vehicles sold in the last two years, MIA analysis indicated that at the initial proposed RUC rate, a PHEV would pay 70% more than an equivalent hybrid petrol vehicle, and a full battery electric vehicle (BEV) would pay 95% more,” MIA CEO Aimee Wiley pointed out.
Ms. Wiley highlighted the tax disparity between fully electric and hybrid RUCs, stating that it would unjustly disadvantage PHEV owners, whose battery range can vary based on model and age.
She stressed that this inconsistency could potentially discourage the adoption of these low-emission vehicles and hinder efforts to reduce transport emissions.
