New Zealand’s Clean Car Discount: What Is It? 

Introduction

The New Zealand government just introduced the Clean Car Discount plan to boost the adoption of low and zero-emission vehicles, but it’s not just concerning electronic vehicles (EVs), so below are some of the most frequent inquiries about the scheme. 

From July 1st to December 31st of 2021, all brand new and pre-owned light electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) brought into and licensed for use in New Zealand will be eligible for the Clean Car Discount, according to the government entity in charge of land transport in New Zealand. A light vehicle is defined as a car, van, truck utility vehicle (UTE), or Sports Utility Vehicle (SUV) that weighs less than 3500 kilograms. Vehicles must be under 80 thousand dollars, including GST and on-road charges, and have a Rightcar grade of three stars or above. 

Straight hybrid cars which are without a ‘plug-in’ component were ineligible for the compensation in 2021, but a proportion will most likely be eligible this year when a spectrum of rebate discounts and charges dependent on CO2 classification is suggested. Existing used automobiles already registered in New Zealand will not be eligible for any charges or refunds since the plan only pertains to light EVs that are freshly imported into New Zealand.

What are the rebates promised for a new car?

New car purchasers will get an $8625 reimbursement on any electric vehicle (EV) which was bought for under the stipulated 80 thousand dollars, including GST and on-road fees, or a $5750 reduction on any plug-in hybrid electric vehicle (PHEV) of the same value, as of July 1st. From January 1 of 2022, the highest possible rebate for a zero-emission car under the $80,000 will be $8645 and will decrease dependent on CO2 classification.

How about the rebates for pre-owned cars?

The process of importing vehicles that have been previously owned or used will work similarly, although with lesser savings and charges. A newly-registered pre-owned electronic vehicle costing up to $80,000, including additional typical charges, will be qualified for a $3450 reimbursement starting July 1st, while a plug-in hybrid will be qualified for a $2300 rebate starting July 1st. 

From January 1st of next year, all newly-registered used imported cars will be subject to the CO2 emissions sliding spectrum, with the highest possible reimbursement of $3450 and a maximum CO2 tax of $2875.

How does the process work?

Do not anticipate a discount right away ⁠—the savings will not be automatically attached to the purchase and will not be given by the dealership. The refund is not applied to the vehicle’s sticker price, so you must first purchase your car, get it licensed under your name, and then submit an application for the rebate under Clean Car Discount plan. The registrar of the automobile must submit an application to the Waka Kotahi NZ Transport Agency with the purchase contract, the vehicle’s license plate, and their bank account information attached, after which the refund will be paid to that account. 

Similarly, the fees must also be sent to Waka Kotahi during the registration process when they are implemented in 2022.

How much will my non-electric car cost me?

This is most likely the most important point, and also the most uncertain and speculative supposition at the present. The high-emitter fines will be based on a relative spectrum of CO2 emissions starting at 192g/km and rising, so they will fluctuate from car to car and even across versions of the same car. A high-emitting car will be assessed a maximum fee of $5,175 for a brand new car and $2,875 for a newly brought-in, pre-owned vehicle.

Into more specifics, how much will my diesel utility vehicle cost me? Although there much conjecture about how much a diesel utility vehicle would cost, the New Zealand government has yet to establish the exact parameters and has only provided a few extremely specific examples, stating that all amounts provided so far are representative and according to law and therefore, might change. There’s also a lot of conjecture that ignores particular models that might have various engines, one example being the Ford Ranger.

Controversies surrounding the carbon emission measurements by car companies

Automobile vehicle companies typically use the Australian ADR 81/02 testing cycle, which is widely considered outrageously wrong and outdated. The Australian Automotive Association (AAA) has so far been notably vociferous in its critique of ADR 81/02, claiming that the difference between actual-world and research-facility efficiency is roughly 23%. The triple-A discovered that the worst automobile examined consumed 59% greater gasoline in the actual world than it reported during research testing.

Now, the New European Driving Cycle (NEDC) test or the more current, World harmonized Light-duty Vehicles Test Procedure (WLTP), has been gaining traction, substituting the use of ADR by car companies. WLTP numbers would be used to compute fees and discounts, and those provided with alternative testing methods will be changed to governmental standards if the legislation is implemented.

What does this mean for the Clean Car Discount plan?

It’s unclear exactly what that information will concretely translate into fines or rebates – but based on the statistics used by the authorities, the disparity between a 3.2-liter vehicle and the 2.0-liter vehicle could widen, and the 2.0-liter might even also face a fee.

In addition, we should perhaps keep in mind that, in addition to the additional penalties imposed on high polluters, distributors will face fines if they exceed their CO2 targets under the Clean Car Standard, which will take effect at the beginning of 2023.

Conclusion

As of now, the New Zealand government is working towards their 2050 carbon-neutral target, committing to reducing greenhouse gas emissions, especially carbon dioxide emissions. The Clean Car Discount plan has taken effect since 1st April of this year. In general, the greater the carbon emission rating, the higher the price to be paid in the form of enforced fees. The rebates work according to the same principles: The lower the emissions, the higher the rewards in the form of cash reimbursements.