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EVs out of reach for many despite subsidy, industry warns

May 17, 2022

The road to discounting electric cars for low-income families is likely to be bumpy, some in the industry are warning.

It is unclear how much money motorists will receive to buy an electric vehicle. File photo Photo: AFP

Low-income families who scrap their old car will get funding to buy a low-emitting vehicle in a $569 million scheme, one of the big-ticket items in the government's first Emissions Reductions Plan.

The money will not just be for electric vehicles - it could also help buy an e-bike or could be in the form of public transport vouchers.

But there was very little detail released about the scheme, such as who exactly will be eligible and - critically - how much financial help they would get.

A pilot will be rolled out for 2500 households first, before an expansion of the scheme in about two years' time.

Climate Change Minister James Shaw yesterday said it would follow a similar scheme which was introduced in California.

Those who took part in one scheme there got about $NZ15,000 off the price of a new or second hand EV.

But even if a similar discount was offered here, it would still be costly, and "notoriously challenging", the Motor Industry Association (MIA) said.

Chief executive David Crawford said the cost of new EV imports started at $40,000 and went upwards of $80,000, whereas used models started at about $20,000.

"If it is a new EV, their prices are quite high; would [eligible people] be able to afford debt servicing the difference? The price gap for a new EV can still be big," Crawford said.

New Zealand has many old cars still being driven around; they pollute more and aren't as safe so the MIA said it was supportive of moves to get more of them off the road.

The Motor Trade Association (MTA), which represents mechanics and repair shops, wants the government to go further than the $569m scheme, and roll out a scrappage model for everyone.

Its energy and environment manager Ian Baggott said it would be a challenge for the government to determine the criteria for scrappage.

"[The criteria] to make sure that people don't game the system - does the vehicle need to be in a warrantable condition or have just failed its warrant [of fitness] to be eligible for scrappage? Is there an age limit? Is there a mileage limit?"

He said if the government wanted to make serious carbon emissions cuts it should tap into the whole car-owner market and provide the discount to all New Zealanders.

"There is some detail that we'll nail down over the next few months" - Transport Minister Michael Wood duration 8′ :48″ from Morning Report Add to playlistPlaylist Download as Ogg Download as MP3 Play Ogg in browser Play MP3 in browser

Transport Minister Michael Wood said the threshold would be about the median household income.

"The median household income is around about $75,000 or so - it'll be round about that level - we'll do further work to make sure that's that very specific."

The scrap and replace scheme would apply to vehicles eight years old or less, and costing $35,000 and below.

"We want to bring new clean vehicles into the fleet."

People could also trade for other clean transport options such as public transport or an ebike.

"Now that we've made the budget announcement there is some detail that we'll nail down over the next few months about exactly how that will work."

A car industry boss wants the scheme to apply to all motorists. Photo: RNZ / Marika Khabazi

Focus on private vehicles an off-track approach to climate change

Some say a significant cheque for the Clean Car programme is sending the wrong message about the role cars play in our future.

Victoria University of Wellington's environmental studies Professor Ralph Chapman said - electric or not - cars were still heavy on the wallet and on the environment.

"The sheer carbon emissions associated with running cars, the life cycle of a car and all the infrastructure that goes with it - like highways and more spread-out infrastructure for water and waste water ... when you start to add it all up, cars are pretty much a disaster."

Cars and their infrastructure including motorways are costly for the environment, professor Ralph Chapman says. Photo: RNZ / Marika Khabazi

Professor Chapman said there were still carbon emissions that went into making EVs and the like, as well as the emissions involved in importing them to New Zealand.

"The whole model has to change, rather than just encouraging people to go to a slightly more efficient car."

Professor Chapman said the alternative option of scrapping an old car in return for money towards buying a bike or using public transport was a good move.

Free Fares, which is lobbying the government to make all public transport free, is also disappointed in the scheme.

A spokesperson for the group said the wider Emissions Reduction Plan was "a continuation of an individualised culture and a focus on car ownership" rather than public transport, "which is what we need".

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