NZ motor association pushes govt to make ‘feebate’ scheme a reality

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Words: Matthew Hansen
27 Nov 2020

The New Zealand Motor Industry Association has issued a statement in support of the Labour government’s ‘feebate’ scheme, designed to make low emissions vehicles more accessible to Kiwis.

“Policies that influence demand by incentivising the adoption of low emission technologies are effective tools so long as those policies are implemented in a way that addresses the price premium those vehicles have,” says MIA Chief Executive David Crawford.

“Because the distribution of new vehicles in NZ is a derived demand model, a well-designed feebate scheme incentivises change as it influences the purchase decision. This in turn alters the mix of models supplied by distributors which is more influenced by what is bought, and therefore restocked, than policies aimed singularly at limiting supply.

“Low emission technology is expensive so policies that address low emission vehicle affordability are likely to be the most effective tools available to Government.”

The MIA statement comes a day after it was confirmed that the government would be declaring a climate emergency in New Zealand next week. While the declaration is largely expected to be a symbolic one, it’s also likely to see a range of proposals relating to the motoring industry get put on the table.

As reported yesterday, the UK’s decision to declare a climate emergency has since seen the country bring forward its ban on the sale of new internal combustion engine vehicles to 2030, while also further improving its incentive scheme for aspiring EV owners and increasing investment in hydrogen.

The government first revealed its plans for a ‘feebate’ scheme last year. In its first iteration, it involved offering subsidies to fuel efficient vehicles paid for with fees tacked on to ‘gas guzzler’ vehicles. While the focus is on EVs priced under $80,000, the subsidies also applied to hybrids and small cars with low emissions and engine capacities.

For example, a Hyundai Ioniq EV would inherit an $8000 discount (the maximum offered) and a used Mazda 3 would inherit an $800 discount. On the other end of the spectrum, a Range Rover V8 would cop a $3000 fee (the maximum offered) and a Toyota Hiace a $1400 fee.

The proposal got mixed initial reviews last year, with critics pointing out it would make most of the country’s flow of cheap aging imports from Japan even cheaper, while also raising prices for the commercial sector and its need for utes and vans. While there are some electric vans on their way to New Zealand’s market, only one electric ute — Great Wall’s (still to be formally unveiled) creation — has been linked to local showrooms.

 

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