The Government announced yesterday that the Clean Car Discount (CCD) will be receiving some changes come July 1, 2023, which will include increasing fees slapped on higher emitting vehicles, changing the rebates for zero emissions imports and lowering the threshold for eligible vehicles.
As a result of the Discount, electric vehicle registrations went up by 20% last year, compared to 8% in 2021. Transport Minister Michael Wood said the scheme was “successfully exceeding industry and government projections”, after it was reviewed a year into its full implementation.
“As planned we are further targeting the scheme to maintain its success and ensure it will be self-funding until its next review,” he said.
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Ministry of Transport chart showing Clean Car Discount scheme changes from July 1, 2023
The adjustments seem to be somewhat appreciated by the motoring industry, but there are still concerns.
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A Ford NZ spokesperson told Stuff that while it does offer a number of electrified options for customers, including the fully electric Transit and Mach-E, as well as the PHEV Escape, all of which are eligible for rebates, the increase on ute prices “comes at a time of high inflation across every aspect of life in New Zealand.”
“In regard to Ranger specifically, no doubt anytime the government adds costs to items, it changes behaviours and what people can afford. Unfortunately it’s also coming right at time of high inflation across every aspect of life in New Zealand.
“But New Zealanders will still need utes for towing, the job site, the farm and every other task under the New Zealand sun; just recently Ford donated the use of a number of Ford Rangers to help with the recovery in Hastings for example. People will for the foreseeable future still need utes all across New Zealand.”
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Ford doesn’t have an electric Ranger yet but it does have the electric Transit van.
The Blue Oval went on to predict that Rangers powered by the 2.0-litre biturbo engine will likely become the most popular option. The most popular Ranger is currently the XLT, which only comes with the smaller engine, but the Wildtrak powered by the 3.0-litre V6 is nearly three times as popular as the Wildtrak with the 2.0-litre as of the end of March.
Meanwhile, Toyota’s CEO, Neeraj Lala, said he was “saddened” by the Clean Car adjustments, especially with regard to those with orders on hybrids. Toyota is one of the most hardest-hit brands with the new scheme, as hybrids will almost exclusively exist in the ‘zero band’ from July 1.
“Many of our customers have placed orders in good faith for both high and low emission vehicles with a clear idea of what the rebate or fee will be as part of their affordability decision,” said Neeraj.
Nile Bijoux
The top ten highest selling vehicles for 2023 until April show the Ranger still heading the pack.
“As a brand, we hold the relationship with our customers at the heart of what we do, so I am saddened by the fact that many of them, who have waited extended periods for their vehicles due to us not being able to supply them fast enough, will now be penalised by either reduction of rebate or increase in fee with very little notice.”
“We remain concerned that there are sectors, such as agriculture or construction, who are being penalised by a significant fee increase when there are no suitable low emission options available yet,” he added.
“The fee increase on these models is significant and will affect the affordability of these models that these customers need for their livelihood.”
Chief executive of the Motor Industry Association, Aimee Wiley, said: “Our most significant concern is the timing for the CCD change. Such a short notice period for industry to prepare for the changes will cause difficulties for the new vehicle sector for two key reasons.”
Stuff
The Toyota RAV4 will no longer qualify for a rebate, which will be unfortunate news to those with long order waits.
“The first relates to makes and models that have long wait lists and where customers have paid deposits in advance for those vehicles and have an expectation about the overall purchase price for those vehicles. The second relates to forward supply orders that have already been committed to by new vehicle importers and distributors. A longer notice period for these changes would have enabled industry to have adjusted some of those orders in the light of upcoming changes to CCD rebates and fees.
Wiley also agreed with Toyota in that the adjustment of the zero band will exclude almost all hybrids from rebates, and could end up reducing uptake of electrified vehicles, ultimately harming efforts to reduce CO2.
This view is largely echoed by the Motor Trade Association (MTA), which immediately gave the Government credit for upping the number of EVs on the road. “The MTA strongly supports the decarbonisation of our fleet and industry. We know that harmful emissions have a significant impact on population health. But we want to move to a future where the CCD is phased out,” said MTA chief executive Lee Marshall.
Nile Bijoux/Stuff
Electric vehicles like the Tesla Model Y still get rebates, but less than before.
“That’s because as long as we have the scheme in its current form, hard-working people who rely on larger vehicles and light commercial vehicles are being penalised, while people who can afford an EV are getting a little sweetener they don’t need. Let’s be honest; if you were going to buy a Tesla for $60,000, you were also going to buy it for $65,000. But only a select few are wealthy enough to even consider that kind of decision.”
The effective removal or reduction of the rebate for many hybrids and low-emitting petrol vehicles is also disappointing, MTA said.
Drive Electric, the not-for-profit organisation promoting national EV uptake, was enthused about the changes.
“Research has shown that the clean car discount is popular with New Zealanders, so let’s keep it going until we get close to price parity between EVs and petrol cars,” said chairman Mark Gilbert. “This discount won’t be needed forever – perhaps only another few years. In the meantime, it makes sense for the government to make the design of the scheme fiscally neutral.”
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Drive Electric chair, Mark Gilbert.
Drive Electric previously found that the effects of the Clean Car Discount will save two million tonnes of CO2 over the lives of the 490,000 vehicles registered between 1 July 2021, the start of the Clean Car Discount, to 31 January 2023.
“While we’ve made some great progress increasing new EV sales, at the end of 2022, there were still only 65,000 registered EVs. This is still just 1.5 per cent of the entire vehicle fleet. There’s more to do.”
The nonprofit would also like to see more incentive for fleets to take up EVs, as they generally have a faster use cycle, which would result in more EVs entering the used car market sooner.
