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Be bolder. Lower the EV subsidy cap.

Updated: Aug 31, 2022

The Clean Car Rebate has been a huge success. There will be opponents who would argue that it is flawed, and at Boost Auto we would agree, however we would also accept it has been hugely successful in helping environmentally conscious consumers to buy a Plug In Hybrid or a Battery Electric Vehicle.

Photo by mediamodifier on Unsplash

To understand the scale of its success, we need to look at data. In May 2021 (the month before the announcement and two months from the introduction of the CCR) just 395 EVs were sold, made up of 276 battery and 119 PHEV (2.8% and 1.2% of passenger vehicle sales respectively).

Fast forward to May 2022 and the numbers were 1278 vehicles, 519 electric and 759 plug in hybrid. The data is for new passenger vehicle sales only. The impact on used is lower; PHEV sales doubled to 162 over the same period and BEV doubles to 407 units. The author suspected that perhaps hybrid sales had exploded over the same period, but they only went from 2221 to 2900.

The NZ fleet is like our population. It is getting fatter...

The rebate of $8,750 for a new vehicle is capped. A vehicle must cost less than $80,000 including On Road Costs to be included. In no one’s world is $80,000 for a new car affordable, but there are more affordable options. The most affordable new PHEV is the Kia Nero PHEV Light at $49,990 plus ORC and the cheapest BEV is the MG the ZS EV Excite at $49,990 including ORC. Ora Cat and BYD Dolphin (EA1) will help as they are likely to bring that entry price down by $5K or more when they arrive. Consumers are demanding BEVs in greater numbers, but the price remains a barrier.

At the other end of the scale there are some interesting market distortions. There are at least 9 vehicles within $2000 of the $80K cap (note that the price has to include ORC to meet the rebate threshold).

Now imagine the impact that reducing the cap could do. . It is highly likely that the manufacturers and local HQs would de-content the cars, tweak dealer and wholesale margins and reduce the prices of some of these vehicles. Some might offer variants with smaller batteries. Of course a smaller battery is a retrograde step, but losing a panoramic sunroof, or electric seats? These are first world problems. New Zealand has a love affair with high specification cars, so clearly some of the tech we like or demand works against us.

The new vehicle market represents around 3% percentage of vehicles on the road. We know that additionally around 100,000 used vehicles enter the market from overseas every year. Yet there is no evidence to support that the CCA has dramatically reduced the age of these incoming used vehicles. Used imports are still on average 9 years old when they arrive in NZ, although electric vehicles tend to be around 5 years old. Overall the average import age is still trending upwards, because the dilution effect of EVs is negligible.

Consumers for many used vehicle imports are seeking simple affordable vehicles, which lend themselves to being much cleaner than the vehicle they replace. The Toyota Aqua which failed here as a new car (when sold as the Prius C) is a consumer champion as a used import. With low emissions, fuel economy of 4.3 L/100 km and prices around $9,000 it is no surprise that it has taken the used car crown from Nissan Tiida. For a typical customer it halves the fuel costs per annum and the CO2 emissions of a Tiida. Thera are 2000+ Aqua on TradeMe at present, and one could argue that supporting mild hybrid sales more would have a bigger impact on our emissions reductions and for a lower cost.

According to NZTA data for July 2022, there are 3.6 million licenced light vehicles on our roads (our total fleet of all vehicles including unlicensed vehicles is around 4.4 million). 1.4% of the fleet is either electric or plug in hybrid, and 3.6% are mild hybrid.

Figure 2: NZ Light fleet make up July 2022

At our current rate of new EVs to the market the majority of vehicles here will stubbornly remain ICE powered for perhaps the next 20 years at least, according to Boost Auto’s estimation. Yet if the government were bolder they could shift the dial faster.

Families often have two cars, yet how we think we use our cars and how we really use our cars are markedly different.

One-sixth of household car trips in New Zealand are under 2km long and almost half are less than 6 km long.

The driver was the sole vehicle occupant in two-thirds (68%) of trips in cars, vans and utes.

Arguably the government should be really brave and open up the local market to the categories of vehicles that really will bring affordable electric vehicles to the masses, while at the same time it could target old heavy polluters with tougher emissions testing and a cash for clunkers scheme.

Public transport in the the provinces and particularly rural New Zealand is patchy, however there is a list of alternatives that were barely available just five years ago, like shared scooters and ebikes. What we need as a nation is cheap affordable clean transport. Transport is no longer just car, ute, van, truck, and using a vehicle is vehicle no-longer restricted to ownership.

...and older.

In many markets there are categories of vehicles that are not legal here, which would help the adoption of cheap clean mobility. In Europe a quadricycle is a midpoint between a motorcycle and a car. A low powered quadricycle can be driven by a 14 year old in some parts of Europe, but generally they are driven by 16 year old on a car licence. These are typically size, weight, power or speed restricted. Many markets have their equivalent of a quadricycle. China’s best selling BEV, the Wuling Hong Guang Mini EV for example sits in this classification. For context in 2021 they sold 395,000 of these in China – but they retail for around 8,000 NZD. The USA has a classification called Neighbourhood Vehicles. Japan has Kei cars. Interestingly Japan’s automotive sector has been slow to adopt to electric despite being a pioneer in the industry with the Nissan Leaf that was introduced 12 years ago.

Last but not least, electric motorcycles and ebikes. If you want to create efficient one person transportation – perhaps to replace a second car – then an electric motorcycle or scooter is the most efficient self-propelled vehicle you could consider. An ebike is the most efficient assisted option to consider, yet these vehicles aren’t subsidised. An electric moped costs around 1c per kilometre in fuel to run. If we could convert 20% of car journeys onto two wheels that would be a huge win for the environment.

Given that the majority of trips are short and single occupancy, and the average age of our fleet is old and polluting, much bolder ac

Here’s the Boost Auto wish list for de-carbonising our private fleet.

  1. Offer a cash for clunkers scheme for vehicles over 20 years old – later make it 15 years old. Link the rebate to the purchase of a hybrid or cleaner. Rebates need not be huge.

  2. Introduce a limited emissions testing scheme at WOFs (even non-binding is fine) to help consumers understand how polluting their car is.

  3. Add a component to licence fees to record emissions, with a slow introduction of emission based component.

  4. Support car sharing schemes for BEV in key neighbourhoods

  5. Lower the rebate cap (while creating some carve outs for light commercial vehicles) to $70K (and later lower again) to encourage better cheaper cars.

  6. Allow battery electric Quadricycles and equivalent (just like Paxter) as a power and speed capped vehicle. They can be banned from motorways like mopeds are currently.

  7. Provide incentives for electric mopeds, (this could be just 10% of the rebate for a car) with a target of getting 20% of all car trips converted to two wheels.

  8. Allow community funding for local hybrid powered shuttle buses in rural communities (revise the PSV rule for seat isle width to make more vehicles able to comply).

  9. Provide incentives for ebikes. Globally they have been a success and are the most efficient assisted EV on the market.

  10. Make urban road planning user centric not car centric. The objective should be to have roads a safe space for all, not give traditional transport priority. Motorways would be the exception as they serve a different inter-city purpose.

  11. Remove duty from fuel and move towards a universal pollution and weight based RUC programme for all powered vehicles, promoting smaller, lighter, more efficient vehicles.

Boost Auto is an automotive consultancy working in seven main areas.

  • Market Insights & Trends

  • Sales Training

  • Sales and Marketing effectiveness for brands and dealers

  • Green fleet facilitation for large corporates

  • Go To Market strategies for emerging brands

  • Business Planning and facilitation

  • Operational Effectiveness

You can contact us at


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