NZ announces green car policy changes

NEW ZEALAND authorities have announced changes to the country’s controversial Clean Car Discount rebate/fee policy implemented in March 2022 but now undergoing changes effective July 1.

The Clean Car Discount (CCD) consists of rebates or fees based on CO2 emissions for new and used eligible vehicles the first time they are registered in New Zealand.

Put simply, the higher the CO2 emissions, the greater the fee, the lower the emissions, the greater the rebate. Vehicles with moderate emissions currently do not incur a fee or be eligible for a rebate.

The policy has advantaged some sectors of the new car market at the expense of others and is aimed at expediting New Zealand’s transition to electric vehicles.

However, March 2023 new vehicle sales figures from New Zealand, in particular those for (mostly diesel) light commercial vehicles, are down reflecting the impact of the CCD.

New Zealand’s Motor Industry Association’s (MIA) principal technical advisor, Mark Stockdale, said some of the decline of new vehicle sales can be attributed to the CCD fees.

“Year-on-year comparisons illustrate the effect government policy can have in changing purchaser behaviours, and I note, light commercial vehicle sales have struggled to regain momentum since the introduction of CCD fees in March of last year.”

Registrations of passenger cars and SUVs, beneficiaries of the CCD, were up on the same month in 2022, the registration of 11,626 units marking a four per cent uptick (444 units).

Commercial vehicle registrations declined sharply, however, with March numbers down 55.5 per cent (5451 units) on last March.

The stark figures have prompted changes to the CCD from 1 July 2023 announced by the New Zealand minister of transport, Michael Wood, some of which the MIA says it welcomes, “However, we have significant concerns on several of the changes that will adversely impact the new vehicle sector,” the association said in a statement.

The new vehicle sector no doubt welcomes the CCD eligibility criteria remaining the same with an $NZ80,000 ($A74,848) cap, which addresses inflationary pressures for new vehicle prices.

But the MIA says it is disappointed that a request for the creation of a specific light commercial vehicle cap at $NZ85,000 ($A79,549) seemed a step too far.

“The consequence is that light commercial vehicles are now unfortunately disproportionately impacted by 1 July CCD fee changes,” it said.

“Our most significant concern is the timing for the CCD change. Such a short notice period for industry to prepare for 1 July CCD changes, will cause difficulties for the new vehicle sector for two key reasons.

“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.”

The MIA says it anticipated a reduction in rebates, an increase in fees and adjustment to the bands for eligibility for rebates.

The government has reduced the point at which a rebate begins (reducing from 146 grams to 100 grams of CO2 per km) which now excludes almost all hybrid vehicles (HEVs) from qualifying for a CCD rebate from 1 July 2023.

It means that the only vehicles to qualify for a CCD rebate post 1 July are likely to be Battery Electric Vehicles (BEVs) and Plug-in Hybrid Vehicles (PHEVs).

As an association representing the interests of the motor industry the MIA has expressed concern about the potential impact to sales of non-plug-in hybrid vehicles.

“If sales for these vehicles drop because they no longer attract a CCD rebate, this could negatively impact the downward trend of CO2 emission improvements from vehicles entering the New Zealand fleet,” the association says.