Electric vehicles: what Kiwis spent on electric vehicles until March

Imports of electric vehicles doubled in the year to March, according to new figures from Statistics New Zealand.

But sales tumbled in April as incentives changed shape, Tesla’s price hikes ate up much of the value
reimbursement from the government, and the end date of the exemption from road user charges for electric vehicles has come closer.

The total value of pure electric and hybrid vehicles imported in the 12 months to March 31, 2022 was $877 million in a passenger vehicle market worth a total of $6.1 billion.

Sales were shaped by the government’s Clean Car Discount scheme, introduced in July, which offered carrots of up to $8,625 to electric vehicle buyers until April this year, and threatened a stick – the so-called ” ute tax” of up to $5175 – from January (it was eventually postponed to April).

Electric vehicle shoppers stormed the doors of dealerships (or, more importantly, Tesla’s website) to shop before the discount’s most generous period expired, while gas and diesel “ice” (internal combustion engine) rushed in before the penalties.

The result was a banner year for both segments.

The value of pure electric vehicle imports soared 309% to $543 million.

Hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs) rose 63% to $242 million and 141% to $46 million, respectively, while internal combustion vehicles rose 42 % to reach $5.5 billion (growth in the traditional ice cream market also reflected a rebound from the Covid-hit previous year).

Tesla’s Model 3 was the big winner in the pure-electric market, according to figures from the Motor Industry Association. The Model 3 accounted for 3,283, just under half of all pure electric vehicle sales for 2021. It was far ahead of the second pure electric vehicle (the MG ZS EV with 874 sales) and the third Hyundai Kona (826) .

It could be the end of golden times, though.

April saw sales of 572 pure electric vehicles, 1,113 PHEVs and 2,145 hybrid vehicles, according to MIA figures. This means that pure electric vehicles fell by a third of the level they had reached in the best month at the height of the rebate frenzy (September, with 1,512 sales).

PHEVs and hybrids have actually perked up a bit as the Clean Car Discount program has been remodeled from April 1 into a graduated scale based on the total emissions of individual models. The new setup means you can now get a subsidy on a hybrid SUV for the first time – but it also caps the maximum rebate between a $2,000 and $7,500 band (from $2,300 to $8,625 from the subsidy program). Note that although the original program has now expired, there are still people who had pending requests to claim a discount through May 31).

Price increases haven’t helped either. In March, Tesla raised the price of a base Model 3 to $72,400 or $74,443 after road trips.

At the start of the Clean Car Discount era, a Model 3 cost $68,732.

Like all electric vehicle makers, Tesla is grappling with global inflation, Covid supply chain issues and concerns over key components like lithium and nickel as demand for electric vehicles soars. . (At the APEC CEO Summit, Tesla Chairman Robyn Denholm called on governments to co-invest in new mines.)

At the other end of the market, ute sales fell to their lowest level since 2015 when the ute tax took effect. No ute made the top 10 for the first time in a decade.

Road user charge exception for electric vehicles expires

Soaring gas prices are of course a powerful counterweight.

But EV buyers who brag that it costs the equivalent of 40 cents a liter to charge their vehicle are leaving out the elephant in the room: road user fees.

Then Transport Minister Simon Bridges suspended road user charges for electric vehicles in 2016, part of a series of measures to encourage take-up of electric vehicles (another allowed EV owners from driving in bus lanes, which collapsed after resistance from road and transport agencies).

The advantage of bridges has now been with us for so long that it has become part of the landscape, and perhaps even forgotten. But it was always presented as temporary.

And as it stands, EV’s RUC exemption is due to expire in March 2024.

From then on, electric car owners could be required to pay $750 per $10,000 driven (to account for road user charges currently levied on light-duty diesel vehicles).

While the government at the time might be tempted to extend the RUC exemption beyond March 2024, they will also be keeping an eye on Transpower’s report on the cost of mainstreaming EVs (which is inevitable, given that all major automakers say they will only make pure EVs and hybrid vehicles from 2030 or earlier).

Transpower says about 40 new grid-scale generation and battery projects will be needed, budgeted at $50 million per year starting in 2030 and reaching $300 million per year by 2050, to accommodate the electric vehicles.

One way or another, this bill will have to be paid.