Your take-home messages:
More than three quarters of New Zealand’s existing electric vehicle (EV) owners consider that financial incentives from public funds are needed to ensure that more than half of new registrations of vehicles are electric by 2025. Incentives are needed to make new EVs affordable, to ensure supply meets demand, and to escape risky reliance on used EV imports that currently are not fully supported by their manufacturers once they reach New Zealand.
This month’s poll:
Our twenty second 1-click survey proposed that: “Additional financial incentives will be necessary for New Zealand to reach a milestone of having half or more of its new vehicle registrations being EVs by 2025”, and provided five options to choose from
- Strongly agree
- Neither agree or disagree
- Strongly disagree
The question was prefaced by the following introduction to help create a common understanding of terms: “Tax exemptions, reduced vehicle registration charges and ‘feebates’ (where additional taxes from high-emission vehicles subsidise the costs of low-emission vehicles) are examples of financial incentives offered in other countries to incentivise switching to electric vehicles. So far, EV owners in New Zealand are exempt from road user charges and incur a reduced ACC levy. Our national EV fleet has been more than doubling in number every year”.
Respondents were invited to provide feedback in an open comments field to explain the detail or reasons for their choices.
The poll was sent to 941 participants in Flip the Fleet on 13 August 2018. There were 542 responses by 20th August 2018, including 233 who provided an explanation or further reasoning for their choice.
Over three quarters of respondents (79%) either ‘agreed’ or ‘strongly agreed’ that further incentives will be needed for New Zealand to reach or exceed the proposed EV uptake target by 2025 (Figure 1). Eleven percent were neither in agreement or disagreement with the proposition, and 1 in 10 respondents thought that additional incentives would not be necessary top reach the proposed target (8% disagree, 2% strongly disagree).
Figure 1: Responses of 542 participants to the proposition that further incentives are required for New Zealand to have half or more of new vehicle registrations being EVs by 2025, August 2018.
What makes you click?
Many of you have mentioned the high purchase price as a current barrier to EV purchase or upgrade, and recognise that current incentives such as road user charge exemptions will disappear come 2021. Some referred to the success incentives have had in “other countries”, especially in Norway, as evidence that they would help flip New Zealand’s fleet. Some also argued that incentives may be particularly needed in New Zealand because of the peculiarities of our vehicle market and sparse infrastructure. For example, absence of local incentives leaves us dependant on external incentives (e.g. Japan) for affordable and therefore second-hand EVs. Most differences of opinion about our overarching question related to differing views on supply and demand in the New Zealand vehicle market.
Supplies might well dry up if overseas incentives are removed, especially as EV uptake in those source countries increases demand for electric vehicles and reduces the number available for export. Reliance on second hand imports will delay arrival of the newest and rapidly improving EV technology into New Zealand and have several unwanted consequences e.g. prolonging the “range anxiety” currently associated with earlier version EVs and reliance on lower-cost “battery” replacements to keep older EVs running. The tradition of keeping cars for much longer than in other countries means that flipping the fleet to EVs will be much slower in New Zealand unless incentives are mobilised to stimulate change. Encouraging New Zealanders to take up EVs might become all the more difficult without incentives if transition to EVs overseas triggers a flood of imports of even cheaper internal combustion vehicles (ICVs).
A few of you plugged the numbers and pointed out that even if EV registrations continue to double each year, we won’t reach the proposed target of half of new vehicle registrations being EVs by 2025. Some consider that doubling in itself may prove difficult: “it is relatively easy in these early years. But doubling the numbers from 16,000 to 32,000 is going to be tough, and 32,000 to 64,000 next to impossible when we discover the number of second-hand imports from Japan can’t supply the demand”. Our high proportion of rural population, current lack of charging infrastructure and limited EV range paired with our engrained vehicle purchasing habits convinces some respondents that ‘50% by 2025’ may prove an unreachable target. Others considered it to be mainly a problem a lack of values, especially a lack of care for the environment, that will prevent demand for EVs beyond the current and relatively small group of early adopters.
Others were bothered by the proposed target itself. One particularly forthright critic thought the target was “arbitrary”, “far too low” and sheer “tokenism” with the need to set “strong financial incentives such as feebates to encourage uptake”. The current government target was considered a nonsense by some because it does not appear to relate to any proven rationale, capacity for change, or the minimum needed to reach other goals (similar comments were made by respondents to 1-click survey #5 https://flipthefleet.org/2017/nz-will-reach-its-target-of-64000-levs-by-2021-1-click-survey-5/). According to this logic, the target in our question was equally problematical. One respondent called for “a coherent analysis on the costs and benefits of going slow versus fast in uptake and the necessary minimum to reach the Paris Agreement targets and national zero carbon goals by 2050”, as well as “an economist to determine the benefit to NZ” of powering fleets using NZ-produced electricity shows further research is warranted to see whether we can ‘rest assured’ that EV uptake will passively diffuse in time to meet national and global goals, or whether incentives are the push we need to pass the post.
A minority of you are confident the target is achievable regardless of EV incentives and that it will be surpassed in the next seven years: “[the question is] only talking about registrations. 2025 is 7 years away. By then there should be a myriad of electric vehicles on the market at prices less than petrol/diesel alternatives”. Indeed, the 2018 EV Global Outlook predicts that EV market prices will match ICV equivalents by 2024. Some reckoned that EVs hold enough innate merit that they can be left to flood the market on their own, and that ICV taxes already seem sufficient. Knowledge that manufacturing costs will drop, battery replacement will become available, and a greater variety of EV models will soon be on the market has led some respondents to believe that uptake will happen quite naturally without the need for incentives. One said: perhaps “we shouldn’t be wasting our money trying to make this happen sooner”. However, if incentives could help reduce emissions and vehicle running costs between now and this critical mass of uptake, certainly they deserve some consideration.
Industry and market incentives could also help resolve perceived current EV supply issues such as hefty price mark-ups (“the cost of a Holden volt started at 80k NZ but was half that in the US”), a lack of available models, inadequate support services, and low resale value (“try getting a trade in on a 2011, 9 bar Leaf”). A lack of supply of EVs in the NZ-new market is was identified by many of you as the main constraint for national EV uptake, and correspondingly the need for local incentives to bring in such vehicles is urgent. The lack of supply of new EVs forces car dealers to make the most of second-hand EVs that come cheaper thanks to place-of-origin incentives. In return, Kiwis receive “no support, no new EVs, and no NZ New Used EVs”. Some of you thought that an added push for new EVs to enter New Zealand is urgently needed: There will be a huge competition for the new and relatively new second-hand EVs right round the world in the coming decade, made worse by our left-hand driving (smaller production runs). For adequate supply we need to incentivise import and purchase of new EVs as quickly as possible”.
One Flip the Fleet member suggests that car manufacturers and suppliers are making the most of growing global demand for EVs yet short local supply by keeping the cost of new EVs higher than they actually need to be: “All the hype about EVs is making newer cars too expensive. Dealers have found a cash cow for the rich”.
Irrespective of opinions about whether incentives are absolutely needed to reach our target, most of you believe that incentives are bound to increase their uptake: For some its simple maths e.g. “If petrol cars cost more than an EV, then people will buy an EV”. One EV owner believed the initial aid could even be made back by the government over time: “If the government subsidies the initial price, even if they then get that back via higher road user chargers, that could help also i.e. the total being paid is the same, just spreading the cost out, like a current petrol car”. Such direct financial incentives could help in two ways: “making them cheaper to buy at the start, but also by keeping the resale value up”.
A mix of direct and indirect ways of financially subsidising EVs emerged from your comments: (i) subsidise the import of new or near-new EVs ensuring a variety of models, (ii) providing indirect business incentives, (iii) make it mandatory for manufacturers and local suppliers to include electric drive trains in their fleets, and (iv) fund the start-up of EV repair and maintenance companies inclusive of staff training. The latter training element is already underway as part of the government’s EV uptake investments over the next three years.
Feebates were by far the most attractive option for existing EV owners that responded to our poll. Some viewed them as “the fairest” incentive, and acknowledged their dual benefit of “penalising the threat (those gas guzzlers) and encouraging the solution (the EVs) for the same cost of administering the cross-subsidisation and at no net cost to the government”. Extending the road user charge exemption beyond 2021 provides some certainty for encouraging investment in an EV and the consequent savings on running costs can drastically reducing the time required to pay off any loan required to purchase the EV.
Bumping up ICV taxes and petrol costs may seem appropriate mechanisms to some, but for others they were considered unfair because they penalise others i.e. such disincentives will also penalise our lower socioeconomic groups who are more likely to own the oldest, cheapest, and least efficient ICVs. This risk can be minimised by smart choice of the size of the feebate. For example, there are way more ICVs than EVs at the moment, giving scope for a small penalty on an ICV translating into a large benefit for an EV: “Maybe it could be as sharp as a 50 to one deal at first i.e. $100 extra on the registration of a banger transfers $5,000 to the purchaser of an EV. We could also apply the feebate just to the registration of new cars as they come into the country (i.e. either brand new of near new second-hand) rather than levy a feebate annually on all cars in NZ – then poorer families currently with an old car are not hurt, and anyone contemplating buying a new car has a more even choice between an EV and ICV”. Obviously, equity in the EV purchasing process is important so that all New Zealanders “get to participate in a better way of travelling”. Also, if EV uptake gains sufficient momentum, the cost of used ICVs is likely to drop, so poorer people may in fact be able to buy a cheaper ICV even if it has a feebate penalty imposed.
Some respondents drew attention to a need for regulation alongside incentives: “Subsidizing electric cars doesn’t always make them cheaper, only higher prices [and] more profit for the dealers. Same happened with the insulation of houses, when the subsidy on insulation got introduced, the prices increased with the same amount or more.” Although import and manufacturing subsidies would make New Zealand more competitive in the global EV procurement market, perhaps a current market analysis would be useful to ensure prices didn’t rise accordingly once subsidies were put in place. The “free market” alone cannot necessarily deliver the desired outcome.
Several of you emphasized a need “to get business on board”. Tax exemptions for EV purchases by businesses “would potentially drive procurement [of new EVs] and accelerate trickle-down to private owners”. Targeting incentives towards businesses could also help to expand the availability of different EV models such as utes, station wagons and vans (eventually available to the public at more affordable second-hand prices) while ensuring we have more new EVs entering the New Zealand fleet.
The full range of incentives and disincentives and strategies for redistributing finances includes:
- Extended road user charge exemption beyond 2021 for EVs and plug-in hybrids (PHEVs) to a lesser extent
- Free public charging (possibly via solar energy production atop public buildings)
- Extensive and reliable public charging infrastructure
- Subsidizing fast charger installations in public places, homes and workplaces, motor camps
- GST excluded from new EV purchases
- Additional tax on new ICV (petrol and diesel) purchases
- Reduced EV registration fees
- Adjusted Fringe-Benefit Taxes to make it more attractive for businesses to buy EVs
- Reduced electrical supply rates
- Free at-home charging from 12pm to 4am
- Lower insurance costs for EVs
- Transferring saved foreign fuel import costs to EV incentives
- Sliding scale of road user charges relative to efficiency/emissions of vehicle
- Different depreciation rates for tax write-offs (EVs > PHEVs, ICVs > PHEVs and EVs)
- Incentives to convert old ICVs to EVs (thereby creating jobs and decreasing waste)
- Mandated electric drive train option for all car manufacturers/suppliers
- Very low or zero interest loan schemes for EV purchase
- Health warnings featured on ICV promotional material e.g. TV advertisements
- Ban new ICE sales in 2025
- More stringent WOF checks for emissions
- Preferential lanes for EVs and banning/taxing ICV in cities
Successful and prolonged EV uptake will not just depend on financial incentives and regulation. Some of you think investing in education and infrastructure are “just as important as individual financial incentives”. Conversations with interested citizens reveal some “don’t understand they can charge at home on a 15 Amp plug”, and others are unaware of the current road user charge exemption and ACC levy reduction – even after they’ve bought an EV! Further promotion of EV lifestyle and driving benefits could be an additional channel funding flows into. Ensuring “infrastructure outpaces growth” was also mentioned as vital for achieving a steady uptake of EVs, with the belief that “more chargers are more incentive”.
Focusing on “Evolving” public transport fleets and investing in cycle and walkways were also pegged as ways government could help remove high emission vehicles from roads and set the EV scene. Public and active transport remain important pieces of the low-emissions challenge e.g. considering that “1 person in an EV takes up as much road space and parking space as 1 person in an ICE [internal combustion engine vehicle], and much land, energy and materials goes into roads and parking spaces”.
Several of you believe stronger and more inclusive governmental regulations are required alongside incentives for EV uptake to be successful. The current need for business vehicles to present ANCAP ratings that meet health and safety guidelines – which are only available for new and not second-hand EVs – means businesses are excluding them as viable vehicles because they don’t “stack up from the accountant’s angle”. Meanwhile, “the Consumer Grantees Act is inadequate to protect buyers and without the full backing of the OEMs, the dealers are really vulnerable”.
Poor role-modelling has some of you off-side with our political leadership: “Government haven’t even incentivised their own departments to go EV, so why would Joe Blogs do it?”.
Action speaks loader than words. “If the New Zealand govt wants to actually have a “Clean Green New Zealand”, not just have the marketers tell the world that we do, it must put some money in to ensure we are actually as clean and green as we claim we are. Especially if it costs the govt nothing [in net terms, should a feebate be used]”.
Discussion and conclusions
The majority of New Zealand EV owners believe that financial incentives will be needed to reach a target of EVs making up 50% or more of new vehicle registrations in New Zealand by 2025. Certainly, there was a near unanimous assessment by the EV owners that incentives will undoubtedly accelerate uptake, even though a minority view remains that the target we nominated is attainable without them. The majority view urging financial incentives is unlikely to be motivated by self-interest. After all, the respondents to this survey already own an EV and the majority of them are overwhelmingly pleased about the decision to buy one (e.g. see 1-click surveys #15 https://flipthefleet.org/2018/1-click-survey-15/). Rather, their judgement that financial incentives are needed, especially once the pool of early adopters is exhausted, is mainly based on repeated conversations with friends, family, colleagues and the media swirl that frequently challenges the EVs value proposition. The testimony in this and other 1-click surveys (e.g. 1-click survey # 11, https://flipthefleet.org/2017/when-should-people-buy-first-ev/) complements and is consistent with the formal research commissioned by the Energy Efficiency and Conservation Authority on why New Zealanders choose to buy, or not to buy an EV. i.e. the most frequent barrier to purchase is that EVs were considered to be “Not available at an affordable price” (January to March 2018 survey).
Despite a majority asserting the need for incentives, some of you thought that we had the process backwards i.e. the target itself needs a shake-down to give it some meaning and make it worth shooting for. Is half of new registrations by 2025 enough to reach our national goals and international commitments to keeping global warming below 2 degrees Celsius? Is the target too modest (so it builds in mediocrity), or too ambitious (and so likely to turn people off)? Targets only work to draw people on to improved performance if they a realisable and inspire added effort. Targets will only inspire added effort if they are trusted and the reasons underlying their level are explained and understood – our experience is that EV owners generally do not know where the government’s current goal (to reach 64,000 EVs by 2021) comes from. It is only fractionally above the previous growth in EVs seen before the target was erected. We strongly urge completion of a formal modelling exercise to erect a Specified, Measurable, Action-oriented, Realisable and Time delimited (‘SMART’) EV uptake target. This can then be coupled to a cost-benefit analysis to ensure that New Zealand invests sufficient and an optimum level of public funds to ensure the target is reached.
We were struck by the variety and subtlety of the suggested methods for incentivising uptake. There were calls for financial incentives, subsidies, and prolonged tax exemptions could be made available to the public at large, but clear recognition that industry and business incentives may have a greater impact on purchase price, model availability, and proportion of NZ-new electric vehicles. There were several warnings that ensuring supply of sufficient high-quality and improved EVs will get more difficult as other countries capture the available stock through direct incentivisation. Slower substitution of existing ICV stock is likely in New Zealand because we traditionally retain vehicles much longer than owners in other countries. This lag is likely to apply all the more to EVs because their maintenance and repair costs are so much lower than ICVs. “Trickle down” of EVs to second and third owners in New Zealand is probably going to be even slower, so there is an urgent need to incentivise the landing of new EVs in New Zealand rather than relying on second-hand imports.
Although feebates was the most popular way to incentivise uptake, a whole package of different methods, include direct and indirect interventions, and both financial and non-financial ways to get more New Zealanders to switch. Improved regulation is needed alongside some of the incentivisation packages, partly to ensure that any public investment in EVs is actually transferred to the purchaser, but also to reduce looming risks from relying on second-hand imports of EVs. More pro-active government leadership is required to hasten EV uptake in New Zealand.
Here’s a selection of the 233 comments we received from you this month, outlining the major themes and schemes you chose to share with us. We’re oh so glad you did!
Incentives will help reach the target on time
“I think the EV message is getting through and the uptake will reach critical mass in time” • “need to make more of an impression on the minds of motorists before the break even point when the upfront costs of EVs become cheaper than comparable with those for ICEs” • “The planet cannot afford to wait…” • “We need strong financial incentives such as a feebate to encourage uptake” • “Either increased $ incentives or a significant increase in the range of everyday electric vehicles will be needed to achieve 50%. Or more likely a combination of both” • “Incentives will be required in heavy transport” • “Simple maths suggests that if we continue doubling the EV fleet every year until 2025 we are still going to fall short of having half our vehicles electric by this time, we need to more than double the EV fleet every year to hit this target so will need more incentives to do this”
We don’t need incentives or disincentives
“We are only talking about registrations. 2025 is 7 years away. By then there should be a myriad of electric vehicles on the market at prices less than petrol/diesel alternatives” • “I do not believe government should subsidise EVs any more than they do at present. EVs will become a greater proportion fleet when the price comes down due to improved manufacturing efficiencies, we shouldn’t be wasting our money trying to make this happen sooner” • “I’m not sure we will need to have the extra incentives. I believe Kiwis are taking up EVs rapidly and talking about their benefits often enough that the mood is moving quickly” • “I think the Petrol & Diesel motorists are already heavily taxed without having to pay out anymore to subsidise the uptake of EVs.” • “EVs need to be entering the marketplace & becoming more attractive/affordable on their own merits”
Even with incentives, it will be a struggle to reach the target
“We think it will happen without incentives anyway, but not in 7 years. We shall see …” • “Doubling the number of EVs year on year is relatively easy in these early years. But doubling the numbers from 16,000 to 32,000 is going to be tough, and 32,000 to 64,000 next to impossible when we discover the number of second-hand imports from Japan can’t supply the demand. Because second-hand imports are the major source of EVs contributing to the numbers.” • “I think that getting to 50% or above in NZ could be difficult because of NZ’s large rural population” • “Even the (otherwise welcome) extension of the recharging network will not be sufficient, in my opinion, to fully compensate for the downtime involved in charging as opposed to pulling into a petrol station and refilling in a fraction of the time” • “As our fleet is made up of mostly second hand Japanese imports we will lag behind Japan. What they have today will probably be what we have in 2025, and that is probably not 50%+ EV’s” • “To my mind the 2025 new car plan is doomed to failure. Players like Nissan do not seem willing get on board. New car subsidies would be welcomed by dealers, but they will continue to price gouge and adoption will not increase much” • “With a lot of potential EV owners waiting until their preferred type of vehicle shows up in the market, that means someone who has an ideal car released in 2020-2021 will likely be in the market around 2023-2025. That in itself makes it exceptionally unlikely that we will see a significant proportion of car sales in NZ be EVs until around that time, with the corresponding lag in total fleet-wide numbers that this will bring”
We should be aiming higher!
“The target is arbitrary and far too low. It represents only a tiny fraction of the total car fleet in NZ. Its tokenism..” • “
We need to encourage EV manufacturers into NZ
“We spend $8.4b a year importing ICE vehicles, a huge malinvestment. That’s a huge source of private money that could be better spent” • “Nissan and Mitsubishi pulled out of the EV market in NZ due to lack of financial incentives for new car purchase, because it is cheaper for people to import cars from countries where incentives are in place. This has left Kiwis with no support, no new EVs, and no NZ New Used EVs. Also no features such as NissanConnect” • “Incentives should focus on new vehicle industry, giving importers more buying power as nations compete for current lack of supply and models (so NZ doesn’t become a dumping ground for ICE’s and second-hand EVs)” • “As other countries transition, we are potentially going to be flooded with cheap combustion vehicles, so the competition between EVs and even cheaper ICVs will intensify. What would happen to our national goals if say Japan or UK remove their current financial incentives to buy EVs and our supply of quality EVs dries up? For adequate supply we need to incentivise import and purchase of new EVs as quickly as possible” • “better support service from NZ car companies” • “Used EV imports from Japan are affordable here thanks to subsidies and tax breaks that boost sales and turnover at home” • “To become mainstream EVs will need to start being sold by main NZ car dealers in large numbers but they can’t currently compete with the UK or Japanese imports. So they either sell very few (as cost is too high) or don’t sell them at all (thus keeping EV literacry supressed)”
High purchase price and poor industry support are stifling uptake
“All the hype about EVs is making newer cars too expensive. Dealers have found a cash cow for the rich” • “New car purchase prices are significantly higher than near new or as new s/h imports. Why would dealer networks (such as Nissan NZ) bother if they cannot compete on price?” • “Compare an ICE Hyundai Kona at $40K to the same Hyundai Kona EV at $74K, kind of hard to justify paying double for the “same car”” • “At the present time, the most economical path to EVs in New Zealand remains the Japanese 2nd-hand import market which naturally has a limited supply as well as dubious manufacturer support. The expand the pool in New Zealand requires an affordable new-car channel” • “Been looking at new vehicles on the market and even the basic ones are very expensive.” • “I do think there is another issue, which is the New Zealand branches of international vehicle companies overcharging for New Electric vehicles. For example the cost of a holden volt started at 80k NZ but was half that in the US. The new Nissan Leaf was 65k, but is less than 30k US. There are other examples but I think you get the idea: New Zealand vehicle companies are being greedy. Therefore we are relying on second hand cars for most of our EV imports. Car manufacturers need to stop being greedy, and start selling for real prices not hyper-inflated prices.” • “The 64kWh Hyundai Kona (leather seats) is priced in Norway at 335,900 NOK which is approx NZD $61,000 but is listed in NZ at $74,000. Very expensive for such a small car. Other government incentives will be needed to get over that price hump” • “I think people are still unsure about battery life and potential resale value” • “We could only afford to buy one because we’d paid off our house. If we still had a mortgage, we wouldn’t have the EV. I know they save money, but the reality is we needed a petrol car as well, so this is a second car, which is a luxury” • “Our 6 month old Zoe was imported from the UK and still cost $41K, double the cost of a brand new NZ-new similar sized petrol car (eg Honda Jazz) which would also have a 3 year manufacturer’s warranty”
Feebates are a “fair enough” trade-off
“Rebate schemes have had results overseas in giving the push required to get the market started. It would be fairly straightforward to implement such a scheme in New Zealand and even keep it revenue-neutral by adding a small ‘smoke tax’ on first registration of combustion engine vehicles which would be used to provide the rebate on EVs. At the present rate of ~2% new registrations being EVs, a $500 tax on 20 ICE vehicles would fund a $10K rebate on an EV with some money to spare. This would go a long way towards closing the price gap for new EVs vs. their conventional counterparts” • “Maybe if there is a feebate so that new ICE cars are made to be more expensive than electric cars for the New Car Market in New Zealand then it will be much easier to allow adoption. There won’t need to be much increase on ICE cars to lower the cost of Electrics to a good level. Imagine only having to spend 30k for a new LEAF or Volt or Kona! This won’t work so well for Tesla which have only electric vehicles” • “It won’t be popular – but it is necessary” • “Feebates are also excellent because they are a double-action intervention that joins penalising the threat (those gas guzzlers) and encouraging the solution (the EVs) for the same cost of administering the cross-subsidisation and at no net cost to the government” • “
Financial incentives are the way to go
“Financial incentives will help in two ways: making them cheaper to buy at the start, but also by keeping the resale value up” • “financial incentives needed to surpass capital investment purchase barrier, with NZ mindset currently negating “future savings” prospect of EV ownership” • “If petrol cars cost more than an EV then people will buy an EV” • “But as the total cost of ownership of an EV is basically in the initial price, then if the government subsidies the initial price, even if they then get that back via higher road user chargers, that could help also. i.e the total being paid is the same, just spreading the cost out, like a current petrol car.” • “I think people still fail to see the long-term gains and focus on the initial price tag. As a consequence, they tend to purchase petrol cars rather than EVs due to the higher up-front cost for EVs. Until some sort of parity is achieved on the initial price tag, EV uptake will remain sluggish” • “EVs are perceived as more expensive as petrol/diesel equivalents. The NZ govt should look to other countries – there’s only so many early adopters who will go EV without rebates. Once they’re all EV owners, there’s a lot of petrol heads that will need convincing” • “As rural residents, we’re looking forward to being able to buy a car that has a greater range, but they are too far out of our financial reach at the moment” • “Nothing drives someone to driving something else than seeing other people saving money or getting stuff for free” • “Any financial subsidy or incentive by Government will help [overcome this]. However any Government help must be reliable/certain…I have yet to see any reduction in the registration fee for my EV” • “I believe we should be putting in financial incentives for new and used cars arriving in the country. This really only starts to bring us in line with what other more forward thinking countries are doing”
Disincentives will trump incentives
“Disincentives in place of EV incentives put forth to unwed ICE owners from their gas-guzzlers: “I think there’s too much investment in ICE cars and too many people still wedded to big cars to achieve the goal. Disincentives are needed here” • “There needs to be modest incentives to make EVs more attractive to those wavering on a decision, and very strong disincentives to prod the stubborn status quo ICE owners to convert to EVs. People need to be jolted out of their comfort zones” • “However, if the price of petrol was inflated sufficiently high, we would have bought an electric, and hired the occasional petrol car when needed. It’s simple economics – we are resistant to change, then price of our existing option goes up and up, then we change” • “Being pedantic: Norway didn’t give incentives for EVs, it gave DIS-incentives to buy fossil cars. I think this is easier to sell to the public”
Fringe Benefit Tax needs a shake-down
“FBT needs urgent overall. At the moment pool vehicles incur FBT at a rate set by the purchase cost of the most expensive vehicle in the fleet. Why should a business start substituting even a few ICVs if they then have to pay higher FBTs across the board? At the other extreme, we could instead levy the FBT against the residual value of the ICV that the new EV replaced” ● “I agree with a Feebate, FBT and GST exemption like in Tahiti (no import duty for EVs)” ● “Making EVs the vehicle of choice of businesses would be greatly helped by the removal or suspension of FBT for personal use by giving decision makers access to and experience of EVs”
Business incentives could create further trickle-down rewards
“Allowing different depreciation rates for tax write-offs (EVs higher than PHEVs, and PHEVs higher for ICVs) would potentially drive procurement by businesses and accelerate trickle-down to private owners. This would perhaps be the fastest way to trigger change and create the market for new EVs” • “the key is to get business aboard” • “Fear is businesses are targeted through tax exemptions, then money used by government elsewhere”
Lack of support of used EV imports by dealers
“The real adoption elephant in the room is the negative attitude of a number of the big vehicle dealers and the lack of support network. Cockram Nissans behaviour springs to mind. Buyers of new EVs currently pay a massive premium for new cars in NZ, second hand cars are not holding value (try getting a trade in on a 2011, 9 bar leaf) and after market support is woeful (good luck trying to get even a software updates for as Japanese import car from Cockrams, let alone a battery replacement)”
Prolong the RUC exemptions!
“No RUCs could mean the difference in paying the car off in 5 years compared to 10 years”
We will need more than just incentives to keep increasing uptake
“Especially as currently we don’t have sufficient infrastructure for them to be the sole family vehicle (for long trips as well) so households tend to view them as the “second” car.” • “People I talk to don’t understand they can charge at home on a 15 watt plug” • “I don’t think it is widely known that there are currently no RUC and that Acc levy is reduced – I certainly didn’t.” • “More chargers are more incentive” • “As battery capacity in EV’s gets larger it is going to take longer to recharge and more EV’s on the road is going to put more pressure on the charging infrastructure. We travel to Dunedin with our Nissan Leaf and in the past year we now have to wait every time to recharge the car for our return trip home to Oamaru. The charging station behind the Town Hall needs an immediate up grade, access is also difficult. We are going to start using our petrol car again for trips to Dunedin as it is now taking too long to recharge” • “Rather than incentives I think focus needs to be on ensuring that infrastructure outpaces growth so that there is plenty of capacity to meet growth rather than it becoming a barrier” • “Existing advertising is skewed 99.9% in favour of ICE cars, large SUV and trucks in particular” • “There needs to be much more mainstream and positive publicity from established sources to convince NZs petrol and diesel heads to change” • “I think a big factor in getting the public to take up electric vehicles for personal use is that they know they can charge easily – whether it is from home infrastructure (eg. solar panels & battery storage being implemented at home and possibly subsidised from Government) or charging stations more visible in many towns and cities” • ““a fleet of EV’s is not necessarily the answer to transport and energy, as 1 person in an EV takes up as much road space and parking space as 1 person in an EV, and much land, energy and materials goes into roads and parking spaces. More public transport, cycleways and pedestrian friendly towns needs to be encouraged”
Incentives must ensure social equity
“There is a potential equity issue: if the cheaper high emissions vehicles get all the more expensive because of feebates, poorer families will be indirectly paying part of the cost of low emission vehicles purchased by more wealthy families. A lot depends on how any feebate is scaled – there are so many more combustion vehicles being registered than EVs, that any charge on the ICVs can be relatively modest and still deliver a hefty bonus to defray the purchase cost of the EV. Maybe it could be as sharp as a 50 to one deal at first i.e. $100 extra on the registration of a banger transfers $5,000 to the purchaser of an EV. We could also apply the feebate just to the registration of new cars as they come into the country (i.e. either brand new of near new second-hand) rather than levy a feebate annually on all cars in NZ – then poorer families currently with an old car are not hurt, and anyone contemplating a buying a new car has a more even choice between an EV and ICV” • “Most Kiwis can’t afford new cars – or even, a good second-hand one. So, the poorer you are, the more likely you are to be stuck with (at best) an old, unsafe, expensive to run car. We not only need financial incentives – we need to support the poorer car owners into EV ownership so that they too get to participate in a better way of travelling. I have literally been approached in a supermarket car park by a young man saying, “Lucky you – I really need a car like yours – I have to travel to see my sick mother so often and it costs too much” • “Also, there needs to be assistance to ensure that the electric/ICE divide does not simply become another poverty trap with those least able to change getting burdened with increasing fuel costs” • “While incentives would help, it is effectively benefiting those that can afford an EV, while penalising those that are cannot”
Government needs to lead by example and facilitate through policy
“Government haven’t even incentivised their own departments to go EV so why would Joe Blogs do it?” • “No ANCAP ratings on cheap EV imports mean Health and Safety people exclude them so fleets only choice is very expensive new ones. New doesn’t stack up from the accountants angle. How about govt drives H&S people to rate clean air for all as a bigger safety concern than ticking ancap boxes for an already very safe car” • “We really need a coherent analysis on the Costs and Benefits of going slow versus fast in uptake and the necessary minimum to reach the Paris Agreement targets and national zero carbon goals by 2050” • “Regulation must be considered alongside financial incentivisation as well. Frankly the Consumer Grantees Act is inadequate to protect buyers and without the full backing of the OEMs, the dealers are really vulnerable. Poor after-sales service of EVs of imported second-hand poses large risks to our EV uptake in NZ. So we’ll need stronger regulation alongside financial incentivisation to bring more EVs in new with proper after sales service and battery replacement infrastructure and service” • “the NZ Government is just coat-tailing on the subsidies offered by Japan to stimulate the market for EVs.” • “Government is well aware that price incentives work. Examples such as taxation on cigarettes are evidence of this. If the government are serious about their emissions targets incentives should be introduced to encourage the purchase of electric vehicles.” • “It would be nice if the government could twist NissanNZs arm strongly to provide reasonable support for the current flood of Nippon-New LEAFs presently being bought in droves” • “If the New Zealand govt wants to actually have a “Clean Green New Zealand”, not just have the marketers tell the world that we do, it must put some money in to ensure we are actually as clean and green as we claim we are. Especially if it costs the govt nothing” • “Money spent on NZ made Electricity vs imported oil at ~ 8 billion dollars per year. We need an economist to determine the benefit to NZ to keep money in NZ” • “If NZ is keen to promote the 100% Pure image (do we still do that?) then surely world leading zero emissions credentials would be a draw card?” • “Rather see Govt focus on replacing the worst polluters, e.g. old buses and trucks and get those off the roads and replaced by alternatives or at least less polluting models”
Without local incentives, our EV market is shaped by other countries’
“New Zealand doesn’t traditionally have a strong new car market, which means availability and range of vehicles are limited to what is available on the 2nd hand market” • “We currently get second-hand incentives due to the initiatives in UK and Japan that are passed to us via cheaper used imports. Imagine the uptake of EVs if these incentives were first hand from NZ government on new EVs!” • “Variety of incentives have increased uptake, at least in the short term to aid the early adopters. Several countries saw initial boost in EV purchase which is now tapering off (likely reached the late adopters and laggards stage of diffusion – perhaps only price equality will sway them and maybe not even then!)” • “The supply of used EVs to import could change significantly if demand from buyers from other countries increases. It appears that Australia has just added used Leafs and e-NV200s to their allowable import list, and already one importer has multiple units for sale. If demand from Aussies takes off like it has here, then we could see much higher used Leaf prices and less choice…”
Early adopter vs majority motives
“I have a hybrid Outlander and very pleased with it. Also solar panels to reduce the cost of recharging the battery. However, both involved expensive investment and I made it because I felt that I had to contribute somehow to reducing my carbon footprint; the economic case was weak and even today remains so.. I am sure many people face the same disincentive” • “At present you really have to want an EV for other reasons and be prepared to pay heavily for it, which is a clear obstacle to wider uptake” • “After the early adopters the next cohort will require stronger incentives” • “We are still in the “innovator”/”early adopter” phase of electric mobility. Early adopters are prepared to accept the high purchase price and current limitations of EVs because the environmental benefits and other advantages out-weight these limitations. However, achieving a target of 50% of new vehicle registrations by 2025 means we would need to move NZ into the “early majority” phase and this will be a big challenge” • “Current benefits are passive – e.g. reduced fuel and maintenance costs. This motivates early adopters, but to get early majority and late majority (as per diffusion of innovation curve), active benefits would drive uptake of EVs faster”
Awaiting new models could slow uptake
“With EVs being so new there are very few options available with big gaps in the range (SUVs, trucks/utes, large family sedans/wagons etc.) where nothing is really offered. This will change in the future, but affordable availability here will be 3-5 years behind the primary markets” • “As the early generation Leaf’s age, they will be exported from Japan with increasing fervour, and of course we’ll snap them up because it’s all we can afford.”
Hannah Gentle, Henrik Moller, Monica Peters, Dima Ivanov and Daniel Myall
27 August 2018