New Zealand will not become a “dumping ground” for high-emission vehicles, Transport Minister Chris Bishop says, despite warnings from electric vehicle advocates after the government’s major cut to the Clean Car Standard.
The standard, which effectively penalises importers of high-emission vehicles to encourage cleaner options, will be reduced by nearly 80 percent at the end of this week. Penalties for new imports will fall from $67.50 to $15 per gram of CO₂, and from $33.75 to $7.50 for used imports.
Bishop argues the change is necessary to prevent an estimated $264 million in charges from flowing through to consumers in the form of higher car prices.
The move has been welcomed by groups like the Imported Motor Vehicle Industry Association. Chair Greig Epps said many businesses had struggled under the previous requirements, with some even shutting down. He said next year’s tighter targets and higher penalties would have made the situation even worse.
However, EV advocacy group Drive Electric is dismayed. Chair Kirsten Corson called the shift “disappointing” and “embarrassing”, warning that the drastically lower penalties could turn New Zealand into a destination for high-polluting cars. She noted Australia’s penalties are still far higher.
Bishop rejects the suggestion, saying the EV market is suffering from a “perfect storm” of collapsing demand and limited global supply. High prices and supply issues in Japan and other markets, he said, are keeping New Zealand buyers away. While some critics blame the government’s earlier removal of the Clean Car Discount, Bishop insists this only affected demand “at the margins”.
Economists Gareth Kiernan and Eric Crampton disagree, noting the previous discount boosted EV sales significantly, and its removal prompted many buyers to purchase early, contributing to the 2024 slump.
The minister also confirmed no climate impact assessment was carried out before slashing the Clean Car Standard, arguing any effect would be negligible. Corson strongly disputes this, saying transport emissions are crucial to meeting New Zealand’s Paris Agreement commitments, and that decisions made now will shape the vehicle fleet for decades.
Automotive retailer Simon Lucas agrees some relief was necessary, saying distributors have been absorbing tens of millions in penalties because of the fall in EV and hybrid sales. He said removing the Clean Car Discount caused sales to collapse by up to 90 percent, making it impossible to balance emissions-related taxes. In a prolonged recession, he said, consumers are more cost-conscious and unwilling to pay the premium for EVs, which pushes them to hold on to older vehicles longer.
Lucas supports a “fiscally neutral” scheme to encourage EV uptake, noting the previous programme lost its balance when buyers shifted heavily away from petrol vehicles, leaving taxpayers with a $330 million bill.
Labour leader Chris Hipkins accused the government of causing the problem by scrapping the Clean Car Discount, which he says collapsed EV and hybrid imports and raised costs for consumers.
The government will review the Clean Car Standard and report back to Cabinet in June next year. Bishop said countries use a range of approaches, and while New Zealand is now aligned with Australia, some nations have even weaker rules. ACT continues to push for the entire scheme to be abolished.
-TIN Bureau