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Electric cars need tax breaks - expert
By Grant Bradley • 14/03/2016
Government should offer incentives to drive electric cars
A visiting electric vehicle expert says New Zealand should offer tax incentives to kick-start their uptake here as the Government says it is working on measures that will be released soon.
The roll-out out of plug-in vehicles here has been slow with just over 1000 of them on the roads among a light vehicle fleet of more than three million.
Relatively high prices, anxiety about the range of the cars and a lack of variety have been cited as reasons for reluctance by motorists and by fleet buyers, in spite of claims they cost the equivalent of less than 30c a litre to run and have much lower maintenance costs than their petrol equivalents.
Nissan, which sold the world's most popular EV here, has stopped selling them because it can't source the right cars for the market and has met strong competition from used vehicles. The government has also been criticised for being slow in unveiling measures that could encourage their use.
By contrast Norway, which has a range of tax and user incentives, has the highest per capita EV ownership in the world and last year more than 17 per cent of all new cars sold were plug-ins.
Christina Bu, the secretary general of the Norwegian Electric Vehicle Association is in New Zealand for the Asia-Pacific Energy Leaders' Summit this week and said the worldwide acceptance of electric vehicles was growing.
There are close to 100,000 electric vehicles in Norway, with a population which is a little bigger than New Zealand. Like this country, most power is generated from renewable sources - close to 100 per cent in the Nordic nation and around 80 per cent here and growing.
Bu, who spent time here as an exchange student, said if New Zealand was serious about getting motorists into electric cars the government needed to act. "Because of the number of big cars here there's scope for tax - I understand it's difficult to put taxes on - but in Norway we tax big polluting cars to make them very very expensive."
Norway has notoriously high consumption and income taxes although incomes and living standards are high in the oil-rich country that has the biggest sovereign wealth fund in the world.
Bu said this gave policy makers more scope to shape the vehicle fleet but countries such as New Zealand needed to look at such measures, even if just for five years.
"I understand that not all countries can do what Norway does because we have high taxes and we can do it more easily but there are several things that you can do," she said.
New Zealand car buyers pay GST but one option would be to increase the tax on big vehicles in return for reducing it on plug-ins, said Bu.
User incentives such as allowing EVs to use bus lanes, offering free municipal parking and cutting tolls had worked in her country and could be considered here, she said.
"Norway is five or ten years ahead of other countries but this is where it is going," she said.
"The race between car producers is on. The electric cars are developing quickly now, new car producers are joining the game, the price of batteries is coming down fast and EVs are part of the discussion in ever more countries. Sales are still developing a bit slowly, but I think we are just about to see the ball rolling, it will not stop."
Reports say the Centre for Solar Energy and Hydrogen Research Baden-Württemberg (ZSW) found that last year the number of electrically powered cars increased worldwide by almost 750,000 to around 1.3 million.
The United States has 410,000 electric cars followed by China with 307,000, the ZSW found.
Nissan New Zealand is searching for a replacement for the Leaf, which it stopped selling late last year.
Managing director John Manley said Nissan had sold 150 of the cars (for just under $40,000) during three years but wanted a model that met New Zealanders' safety requirements, specifications and price.
"There's a whole array of things that have to align."
Second hand Leafs sell for less than $20,000.
"It has accelerated and there's no denying there are large numbers of used Leafs coming in from other markets. One of the difficulties we have is that we need to position our car to be reasonably priced up against used cars that are coming from subsidised market."
Transport and Energy minister Simon Bridges said this year could be one of "considerable" momentum for electric vehicles.
More charging stations were being rolled out and there were indications new car models would be introduced.
While the numbers of EV owners is increasing albeit from a low base pretty strongly the range (of cars) isn't there yet."
I think this is going to be a year of quite considerable momentum. Before we think of government initiatives you've got to say the market itself is really delivering.
"While the numbers of EV owners is increasing albeit from a low base pretty strongly the range (of cars) isn't there yet."
Government moves to encourage EV takeup aren't expected to be radical but measures were being worked on.
"We're simply working our way through options - I hope to have more say more about that soon. There's no great holdup - its's better to get things right and do int in a considered way rather than rush out with something that is under or overcooked.'
Energy conference • Christina Bu is a keynote speaker at the Asia Pacific Energy Leader Summit which is being hosted by the BusinessNZ Energy Council and World Energy Council as the first of its kind. • Held in Wellington March 16-17 • It has attracted around 200 delegates • The focus is on how build resilience in a collaborative way - sharing challenges and learnings between countries.