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Action needed to boost EV take-up - Drive Electric

Friday 17th August 2018

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The government needs to be acting now if it is to sustain take-up of electric vehicles as part of its emissions reduction strategy, industry lobby group Drive Electric says.

The used-import sector is doing a good job of providing reasonably-priced cars and the annual doubling of the electric fleet is heartening, Drive Electric chair Mark Gilbert says.

But that figure is rising from a very low base and that momentum will be hard to maintain without an increase in new EV imports, he told BusinessDesk. To have 64,000 EVs on the road by the end of 2021, the current target, the country will need to add about 50,000 vehicles during the next three calendar years.

“That’s a pretty steep curve from a volume point of view,” Gilbert said. “I really don’t see that happening - based on what is happening now.”

“The thing that is going to make the difference isn’t the private market – it’s the fleet market.”

The current targets were set by the former National government. The coalition has talked up the prospect of greater electrification of transport as a key part of its climate change response, a strategy endorsed by the Productivity Commission.

Labour’s pre-election policy included converting all government fleets to electric vehicles where it was practical to do so. Green Party leader James Shaw also favoured changes to fringe benefit tax rules to encourage greater EV take-up in corporate fleets.

Gilbert says the government’s position on EVs and any possible incentives will probably roll out of the work underway on the Zero Carbon Act and the establishment of the independent Climate Change Commission.

But he said that risks further delay while the 2021 EV deadline gets closer all the time.

“The government needs to stop sitting on its hands on this,” he said. “They’re coming up to 12 months in the hot seat so it’s probably time we saw something.”

Power firms, car and van retailers and lines companies are working to encourage uptake of EVs. Today Mercury NZ announced a pilot subscription service in Auckland with Snap Rentals. It will allow people to rent a range of EVs on a monthly basis from $469 a month.

Just on 550 EVs were added to the New Zealand car fleet in July – only 121 of them new, according to Ministry of Transport data.

That took the total EV fleet to 9,241 – more than twice that a year ago and about eight months ahead of the 2018 target. If the country continues adding 550 a month it will almost reach 12,000 EVs by the end of the year.

Drive Electric has spent more than a year advocating for a change in fringe benefit tax rules to make it easier for firms to replace conventional internal combustion-engined cars with usually higher cost EVs.

Gilbert says the scheme, which has also been supported by the Motor Industry Association and the Sustainable Business Council, would set the FBT rate on newly purchased EVs at the same rate as the fossil-fuelled cars they replace.

And because EVs retain a higher residual value, those vehicles could then be sold into the second-hand market after a couple of years, boosting the number and mix of models available for private motorists.

Gilbert said policymakers need to understand that New Zealand is a small market. It is already competing for access to new EVs, and may soon face more competition from Australia for access to used Japanese EVs.

“Whichever way you cut it, New Zealand is small so we need to be able to drive more significant volumes to make it of more interest.”


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