Increased awareness of the climate crisis, soaring petrol prices and a government rebate scheme bolstered sales of electric vehicles in New Zealand to record highs in December, analysts say – with uptake now far outstripping that of neighbouring Australia.
Official figures for light vehicle registrations – covering almost all passenger cars – showed battery-powered EV sales rose to just over 20% last month, from less than 4% in January 2022.
The market share for new petrol vehicles fell to a new low in December of just over 35% of light vehicles, down from 51% a year ago.
The Labour government introduced a so-called “clean car” rebate in July 2021; in its current form, the scheme allows buyers of new or used low or zero-emissions vehicles to claw back up to $8,000 (NZ) of the price, paid for by levies on higher-emitting vehicles. From this month, importers must also ensure all cars comply with carbon dioxide emissions standards, with penalties for non-compliance.
The government scheme has been so popular that it has paid out double the amount in rebates that it has collected in fees, leading opposition parties to decry it as unsustainable. In 2022, 16,223 new purely electric vehicles were registered in New Zealand, compared to 6,897 in 2021.
“It’s the discount scheme combined with the awareness that climate change is now pretty much held as a problem by the vast majority of New Zealanders,” said David Crawford, chief executive of the Motor Industry Association, when asked to explain the increase.
The limited supply of electric and hybrid vehicles in New Zealand has led to long waiting lists. Crawford said increased supply was partly reliant on Australia’s uptake of electric vehicles, as manufacturers made cars to the same specifications for both countries, along with Japan.
For the whole of 2022, battery-electric vehicles made up about 15% of new light vehicle sales in New Zealand. In Australia, which does not have a federal subsidy scheme, 3.39% of new cars were electric last year.
Crawford said industry representatives from Australia would cross the Tasman later this month to study New Zealand’s clear car rebate and tax scheme.
Both New Zealand and Australia however, still lag behind many European countries, such as Norway, where EV purchases are so heavily subsidised that they make up more than 80% of new sales.
Electric and hybrid cars make up a fraction of New Zealand’s overall car fleet, and the rebate scheme is a good start but not the entire solution to the country’s transport woes, one analyst said.
“We have one of the oldest and dirtiest car fleets anywhere in the developed world,” said Craig Renney, chief economist for the New Zealand Council of Trade Unions. “We need an integrated approach to this problem, which also includes decarbonising our public transport fleet.”
The price of electric vehicles – even with the government’s discount – remains too high for low-income families, who are now also paying the additional tax when buying petrol cars, Renney added.
The government announced last May a target of 30% electric and hybrid vehicles on New Zealand’s roads by 2030, as part of its plan to reach its target of net zero greenhouse gas emissions by 2050.