Sales of new EVs (electric vehicles) jumped 52 per cent in December (over December 2022) as the Clean Car Discount entered its final month.

The new Government scrapped the low-emission vehicle carrot –
and the accompanying “ute tax” stick – with both phased out on the final day of 2023.

The figures were released as the Motor Industry Association (MIA), representing dealers, called on the Government to release more detail on the plan to charge EV owners Road User Charges (RUCs) from April 1 – which the AA says will cost the average electric vehicle owner around $1000 per year.

With total sales of 3362 (or 6880 if you include hybrids and plug-in hybrids), electric vehicles handily outsold petrol, diesel and LPG vehicles (a combined 1594) in the light passenger vehicle class as internal combustion engine buyers sat on their hands ahead of the January 1 changes.

That spike was expected, but there was a shake-up in the electric vehicle pecking order, with two keenly priced Chinese contenders: MG (now part of the state-owned SAIC Motor Corp) and BYD pulling ahead of the Elon Musk-run Tesla.

The MG 4 (from $46,990) was the biggest-selling pure battery electric vehicle (BEV) in December and the top seller in the new vehicle market overall, as it clocked up 623 sales.

Second was BYD’s Atto 3 with 429 sales, third was the Tesla Model Y (November’s top seller) on 358. The Atto 3 and Model Y also made the top five sellers overall.

Overall, registrations of new vehicles were 19.3 per cent lower than December 2022 as potential buyers of higher-emission vehicles sat on their hands as the “ute tax” entered its final days.

MIA chief executive Aimee Wiley told the Herald she expected a spike in higher-emission vehicle sales during the first quarter.

But Wiley said dealers were anxious about the potential impact of another pending development

Light EVs (under 3000kg) are set to lose their exemption from paying RUCs on March 31 (a move that both Labour and the National-led Government have supported as the Crown seeks to maintain around $2 billion a year in taxes and charges on light vehicle drivers as New Zealand’s fleet electrifies and revenue from petrol tax shrinks).

EV owners will be charged $76 per 1000km (the same rate applied to other non-petrol light vehicles; essentially diesel-powered cars).

The AA says the average motorist drives 12,000km per year, which means $912 in road user charges (RUCs) for electric car owners.

“I’m really concerned about that, to be honest. For many EV owners, it’s about the total cost of ownership,” Wiley said.

Pushing for clarity over ‘double dipping’

There’s also a practical issue, flagged by both the AA and the MIA: owners of plug-in hybrids (PHEV) could get double-taxed: paying RUCs by dint of being electric vehicles, but also petrol tax when they fill up at the pump.

Wiley has a potential solution: PHEV owners pay partial RUCs, but her organisation is wanting details from the Government over what kind of compromise or workaround it will pursue.

The MIA boss said she supported electric vehicle owners paying RUCs.

“They’ve had a free ride. It’s time for EV owners to pay their fair share,” Wiley said.

But dealers and consumers also needed clarity over how the new system would be implemented.

“We’ve been asking some questions about plug-in hybrids so there’s no double-dipping.” So far, the Government hasn’t delivered answers.

AA climate change spokesman Simon Douglas told the Herald there was a danger PHEV owners could “skip out” of paying RUCs altogether, due to the difficulty of tracking when they used petrol or electric.

Stay of execution?

Ahead of the election, then Transport Minister David Parker said officials were investigating ways to avoid double-billing.

“As part of this work, Cabinet will also consider extending the current light EV exemption date,” Parker said.

Transport Minister Simeon Brown has been approached for comment.

Record year for EVs, now the hangover

Overall, 2023 was a bumper year for EVs, with total sales rising by a quarter to 21,036.

Remuera and other top-earning suburbs had the heaviest concentrations of electric vehicle buyers as the Clean Car Discount subsidy kicked into high gear (see table below).

The outgoing Government argued the discount also applied to used vehicles (albeit at a lower rate) and that it would ultimately help expand the second-hand EV market.

Wiley said dealers were nervous about the first two quarters of 2024, but she expected sales to “normalise” in the second half.

“I hope that with the removal of the CCD [Clean Car Discount] that we don’t go too far backwards in our low-emission vehicle sales,” Wiley said.

She said that Tesla’s Cybertruck and other electric ute options would make their way to New Zealand.

“They might not make it hear as urgently as if we kept the Clean Car Discount, but they’ll make it here.”

Ford says the electric version of its ranger ute will be on sale in New Zealand in early 2025.

Wiley noted that while the consumer-focused Clean Car Discount was scrapped on December 31, vehicle importers remained subject to the Clean Car Standard (CCS, introduced in 2022 and administered by NZ Transport Agency Waka Kotahi).

The CCS scheme sees an importer incur charges on higher-emission vehicles, but these can be cancelled out by credits for lower-emission vehicles over a 12-month period.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.