New Zealand’s approach to electric vehicle (EV) subsidies has undergone significant changes in recent years. The government has shifted its focus from direct consumer incentives to bolstering infrastructure and encouraging private investment.
The End of the Clean Car Discount
Introduced in 2021, the Clean Car Discount provided rebates for low-emission vehicles and imposed fees on high-emission ones. However, the scheme concluded on December 31, 2023, following the enactment of the Land Transport (Clean Vehicle Discount Scheme Repeal) Amendment Act 2023. This decision was influenced by concerns over the scheme’s financial sustainability, as it had resulted in a deficit of NZ$302.5 million, with payouts exceeding the revenue generated from fees.
Introduction of Interest-Free Loans for EV Infrastructure
In a strategic pivot, the government has allocated NZ$68.5 million, previously designated for grants, to offer interest-free loans aimed at accelerating the development of public EV charging infrastructure. Transport Minister Chris Bishop highlighted that these concessionary loans are intended to stimulate private sector investment by reducing capital costs, thereby addressing the “chicken-and-egg” dilemma of EV adoption and charging infrastructure availability.
Implementation of Road User Charges (RUC)
As of April 2024, light electric vehicles (weighing between 1001kg and 3500kg) are subject to Road User Charges, aligning them with diesel vehicles at a rate of NZ$76 per 1,000 km. This move aims to ensure equitable contributions to road maintenance across different vehicle types.
Adjustments in Government Fleet Policies
The government is also revising its procurement policies by removing mandates that required agencies to purchase electric vehicles. This change is part of a broader initiative to streamline procurement rules and enhance opportunities for local businesses.
Market Impact and Future Outlook
The cessation of direct consumer subsidies and the introduction of RUC have led to a decline in EV market share in 2024. However, analysts anticipate a rebound in 2025, driven by infrastructure investments and a broader selection of EV models.
New Zealand’s transition from direct subsidies to infrastructure-focused incentives reflects a strategic approach to fostering sustainable EV adoption. By addressing infrastructure challenges and promoting private investment, the country aims to create a conducive environment for the growth of electric mobility.