With the 2023 General Election results now decided, the new National government in New Zealand is set to make significant changes to the automotive landscape. Two key policies—the Clean Car Discount and the so-called ‘ute tax’—will be axed by the end of this year1.
The Clean Car Discount:
The Clean Car Discount, officially known as the Clean Car Rebate, was introduced in 2021 as an incentive for more Kiwis to purchase low- or no-emissions vehicles such as hybrids or electric vehicles (EVs). Under this scheme, buyers of clean cars received a discount, while those purchasing high-emission vehicles like utes faced additional fees. However, despite its initial success in promoting EV adoption, the scheme failed to become self-sustaining as promised by the previous Labour government.
Scrapping the ‘Ute Tax’:
National’s transport spokesperson, Simeon Brown, announced that they will scrap both the Ute Tax and the Clean Car Discount. The move aims to provide assurance to hardworking New Zealanders that they can purchase vehicles without being unfairly penalized1. The Ute Tax was criticized for disproportionately affecting people who rely on utes for their professions or livelihoods.
The Clean Car Standard:
While the Clean Car Discount will be eliminated, National intends to keep the Clean Car Standard in place. This standard encourages a reduction in high-emission vehicles entering the country. Importers receive credits for clean cars and face penalties if their emissions exceed specified thresholds. By maintaining this standard, New Zealand aims to promote cleaner transportation options.
Impact on Electric Cars:
As New Zealand moves away from the Clean Car Discount, there are concerns that consumers may be discouraged from purchasing electric cars. Recently, several carmakers reduced prices on their electric models, making them more affordable. The looming demise of the Clean Car Discount may further influence consumer choices in favor of traditional internal combustion engine vehicles.
In summary, New Zealand’s National government is set to eliminate both the Clean Car Discount and the Ute Tax by December 31, 2023. While this decision aims to provide relief for vehicle buyers, it also raises questions about the future of EV adoption in the country.