Australian policymakers rule out New Zealand’s radical electric-car plan

New Zealand’s ‘carrot and stick’ approach to reducing tailpipe emissions – by penalising utes and SUVs with higher taxes and giving discounts to electric cars – has been ruled out for Australia.

A bold plan by the New Zealand government to increase the tax on utes and SUVs to pay for rebates on electric cars – which has been in force since July 2021 – has been ruled out by Australian policymakers.

New Zealand car-buyers are offered a rebate of up to $NZ7015 ($AU6490) for vehicles with zero emissions – such as electric and hydrogen fuel-cell models.

Cars emitting 150 grams of tailpipe CO2 or more per kilometre are taxed at a higher rate.

The sliding-scale approach means low-emissions vehicles, such as plug-in hybrids, receive a lower rebate than their fully-electric counterparts.

At the other end of the scale, vehicles with tailpipe emissions of up to 260g/CO2 or more – such as utes, SUVs and four-wheel-drives – are taxed $NZ6900 ($AU6380).

The New Zealand government says the extra taxes from high-emissions vehicles help fund the rebates for zero- and low-emissions vehicles, with more than 100,000 rebates claimed in the first two years.

Vehicles with tailpipe emissions between 100g and 149g/CO2 per kilometre fall into the ‘zero band range’, and are not subsidised or hit with an additional tax.

MORE: Federal Government announces vehicle emissions reduction plan

Despite the Australian Government working on a motor vehicle emissions reduction scheme, policymakers have for now ruled out New Zealand’s ‘carrot and stick’ approach.

“The [Federal] Government is not currently considering New Zealand’s Clean Car Discount model,” a spokesperson for the Australian Minister for Climate Change and Energy, Chris Bowen, told Drive.

“The [Federal] Government is delivering on making cleaner, cheaper-to-run cars more affordable and accessible for households and businesses through our Electric Car Discount, and upcoming reforms to fuel efficiency standards.”

On 1 July 2023, the New Zealand Government was forced to lower the maximum rebate from $NZ8625 ($AU6310) and increase the tax from $NZ5175 ($AU7980), as well as lowering the tailpipe emissions targets, after the rebate program exceeded the government’s projections.

While electric-car rebates have so far been the responsibility of state and territory governments in Australia, the Federal Government’s Electric Car Discount exempts some electric and plug-in hybrid vehicles from Fringe Benefits Tax when they are purchased through an employer’s novated lease program.

MORE: BMW iX electric SUV to chauffeur Australian politicians

Drive understands the Federal Chamber of Automotive Industries – the car-company lobby group whose members sell petrol, diesel, hybrid and electric vehicles – has engaged as many as seven lobbyists in recent years to work the halls of Parliament House.

In addition, the Electric Vehicle Council has had two lobbyists working in Canberra since 2022 over various periods of time.

“After a decade of policy inaction, including a ridiculous scare campaign about [electric vehicles] ‘ending the weekend’, [electric vehicles] have now jumped from 2 per cent of new car sales in May 2022 to almost 9 per cent today,” the spokesperson for Minister Bowen told Drive.

In New Zealand, registrations for electric passenger cars – buoyed by huge cash incentives – hit almost 14 per cent of the total sales mix for the month of July 2023. If expanded to include all vehicles – including trucks, buses, and scooters – the sales data shows 20 per cent of all vehicles sold in New Zealand at the end of last year were electric.

The post Australian policymakers rule out New Zealand’s radical electric-car plan appeared first on Drive.