Feebate plans shock industry

The Imported Motor Vehicle Industry Association (VIA) fears proposed changes to the clean car discount (CCD) may result in fewer hybrids qualifying for rebates and utes receiving exemptions from fees or other special treatment.

A review of the feebate scheme is being undertaken by the Ministry of Transport (MoT) as it seeks to address a funding gap of nearly $100 million between penalties and rebates.

The government said when the CCD was launched that it would eventually be costneutral, but between April 1 and December 31 last year it paid out $203.3m in rebates and received $105.1m in fees.

Light vehicles that produce between 147g and 191g of carbon dioxide (CO2) per kilometre currently fall into a “zero band” and attract neither a fee or a discount.

Among the options being considered by the MoT is dropping that range by about 50gCO2/km.

Kit Wilkerson, VIA’s head of policy and strategy, made a submission about the proposals to Michael Wood, Minister of Transport, on March 31. In it, he notes VIA would prefer officials chose an option that takes the zero band to between about

150gCO2/km and 175gCO2/km.

“Unfortunately, all we can do is express a preference as we cannot support any of the options being offered,” says Wilkerson in the submission.

“We are very concerned that the proposed changes will have the greatest negative effect on lowincome car buyers and on those businesses that have acted in good faith by transitioning to specialise in higher efficiency vehicles, such as hybrids.

“Hybrid vehicles remain the best option for New Zealand to lower greenhouse gas emissions from transport, at least until pure electric vehicles [EVs] reach price parity and there is a ready supply.

“We were also aghast to see [the government is] considering carving out an exemption or giving special treatment to utes, some of the worst emitters in the fleet. VIA has no recourse but to conclude that the government has forgotten the purpose of the clean-car programme.”

VIA has recommended to Wood that the CCD’s zero band be left as it is until plug-in hybrids and EVs become available in higher volumes and in a greater variety of models.

Wilkerson told Autofile shifting the entire band down by 50gCO2/ km would be a “big jump” for the used-imports industry.

He notes it would result in about half of the hybrids coming in – “the most efficient cars we’re importing apart from EVs” – no longer getting any discounts.

The government is reportedly looking at introducing changes to the CCD settings at either the middle or end of this year.

VIA has recommended any alterations kick in from the start of 2024 to coincide with expected new targets under the clean car standard.

It is also calling for at least three months’ notice of any revision of the rules, so importers don’t bring in cars that then unexpectedly attract penalty fees.

Wood says an update on possible changes to the CCD will be provided “in the coming months” and the government is committed to ensuring the scheme is revenue neutral.

He told Autofile: “We are reviewing the settings to make sure we are achieving this as signalled when we launched the scheme.”

The minister describes the CCD as having been a success “with tens of thousands of light electric and hybrid vehicles registered in its first year of operation”.

He adds that 78,585 vehicles had been approved for rebates between April 1, 2022, and February 28, 2023, with the largest vehicle type supported by the scheme having been second-hand hybrids and EVs.

“The clean car discount is doing exactly what it was designed to do, which is to make cleaner vehicles a more realistic choice for people,” says Wood.

“It is making a huge contribution towards meeting New Zealand’s [emissions] target while supporting New Zealanders to be part of the shift to our low carbon future.”