Clean Car Scheme now live, now include e-bikes

The start of this month brought with it the full implementation of the governments Clean Car Scheme which sees rebates given for electric and plug-in hybrid vehicles, funded by fees for high emitting vehicles.

The rebate part of the scheme was introduced in July last year and the government celebrated last week by announcing that already 12,000 rebates had been approved.

Transport Minister Michael Wood announced today that the Clean Car rebate scheme has exceeded expectations by already reaching 12,000 approved rebates.

“The Clean Car Discount scheme is off to an electric start, helping to get more Kiwis behind the wheel of cheaper electric vehicles,” Michael Wood said.

The Clean Car rebate provides a maximum of $8,625 for low and zero emission new and used imports.

“The climate emergency we face is a challenge we cannot postpone, and I’m excited and encouraged to see Kiwis making the most of the Clean Car rebate to help play an active role in cutting emissions and reaching our climate targets.

“Today’s milestone means that electric and hybrids vehicles now make up around 1 percent of Aotearoa’s light-vehicle fleet. This is a promising start, but we need to keep building on this momentum. As demand for electric and hybrid vehicles grows worldwide, Aotearoa needs to be an active participant in this market, and avoid being in a position where we are the dumping ground for high-emitting vehicles from other countries moving ahead in the decarbonisation of their fleet.

You can certainly see a big jump in monthly EV sales from July on the stats on the Ministry of Transport’s tracker. In total they say there are now 38,000 EVs in the fleet meaning the EV fleet grew by nearly half in just eight months.

And that should only grow further as from the start of the month the fee part has kicked in. It also saw the rebate scheme expanded to a wider range of vehicles.

The government should have introduced the fee at the same time as the rebate back in July but they didn’t and as predicted, this saw a rush on large high-emitting vehicles.

New car buyers have rushed to get in ahead of the introduction of Clean Car Programme fees on higher-emission vehicles on the 1st of April, with 21,044 new passenger vehicles being registered in March, the highest monthly registrations ever recorded in New Zealand.

Motor Industry Association Chief Executive David Crawford says that while an increase in registrations was anticipated in the lead up to the Clean Car Programme fees, the March 2022 figures are a massive 4,374 units over the previous strongest in October 2018, when 16,607 units were registered.

As expected sales were dominated by the largest ever monthly registrations for light commercial vehicles of 9841 units as buyers rushed to avoid fees for high CO2 emitting vehicles that began on 1 April.

Overall registrations of 21,044 were up a huge 35.8 per cent (5546 units) on March 2021. Year to date the market is up 12.5 per cent (5230 units) compared to the first three months of 2021.

The top three models for March were all utes, with the Mitsubishi Triton (2266 units) taking the lead, followed by the Ford Ranger (1933 units) and the Toyota Hilux in third place (1580 units).

While the three biggest sellers were all about avoiding a fee, of note was the fourth place vehicle for the month, the Tesla Model 3 on 949 units, proving that not every new vehicle buyer was getting in quick to avoid fees.

While the motor industry all knew this bump would happen, I suspect the chances are high that over the next year or so we them forget this and complaining that their sales volumes have dropped.

The rebate scheme hasn’t been all that smooth either.

The Transport Agency, Waka Kotahi, has admitted there are inaccuracies in its feebate system after car dealers reported some car buyers were being asked to pay fees of thousands of dollars on cars that should be attracting rebates.

Transport Minister Michael Wood said he was seeking assurances from Waka Kotahi that those were “isolated cases and that there is a plan to remedy the problem”.

“With any new large scale programme we can expect some teething issues,” he said.

…….

But Vehicles Importers Association chief executive David Vincent said the motor vehicle register that recorded the emissions of different vehicles was incomplete and in some cases inaccurate, sometimes also “defaulting” to apply a fee when rebates were due.

As a result, some car buyers were incorrectly being instructed to pay thousands of dollars in fees on lower emission vehicles including hybrids.

Greig Epps, strategy manager of the Motor Trade Association (MTA), said that in some cases, information on whether a fee or rebate was due had jumped around “every other day”, leaving car dealers unsure what they should tell customers.

That seems a pretty poor performance from Waka Kotahi.

But overall the biggest problem with the scheme is that it’s only for cars, as while electric vehicles do help address emissions, they don’t do anything to help address our other big challenges such as reducing congestion or improving safety outcomes.

The government should at least expand the scheme, or create a separate one, to offer rebates on e-bikes. E-bikes aren’t cheap but are already far more affordable than electric cars and many e-bike users find they are able to replace many, if not all of their car journeys with them. They also have the benefit of requiring far fewer materials to build and need even less electricity to run.

Skyrocketing petrol prices are driving commuters towards ebikes in record numbers and making the switch could save thousands of dollars a year.

Consumer NZ’s latest Sentiment Tracker found that, as well as adjusting their driving habits or joining a carpool to rein in climbing costs, a third of respondents were also considering switching to a hybrid or electric vehicle.

But that momentum has been building for a while, with interest in electric cars and bicycles increasing significantly over the last decade.

Michael Tritt​, chief executive of ebike maker and retailer Electrify NZ, said Customs import figures and other data showed ebike imports had skyrocketed from about 2000 in 2014 to 50,000 in 2020.

In line with that growth, Electrify NZ doubled its sales in the 2021 financial year, Tritt said.

An ebike commuter himself, Tritt said it cost him 20 cents to charge his bike for 100 kilometres of cycling each week.

“The difference between that and 100km worth of petrol right now is huge, without taking into account the other costs that come with car ownership including registration, WOF, insurance, servicing and parking.”

Ebike riders were encouraged to service their bikes every six months but from a cost perspective, making the transition from a car to an electric-assisted pedal power made sense, Tritt said.

If the government were to extend the rebate scheme it could help bring the cost of e-bikes down further, potentially even making them a viable option for lower income households, something electric cars won’t be. It’s worth noting that for the $5.6 billion price difference between surface and tunnelled light rail, the government could buy everyone in Auckland an e-bike and still likely have money left over. Alternatively, they could also give everyone in the country a $1000+ subsidy on them

The biggest challenge to an e-bike subsidy is we just don’t have enough safe cycle route, but then if everyone has them there’ll be plenty of road space to reallocate.

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