Photo / Supplied
The Government announced yesterday that a new electric vehicle subsidy will be introduced to help low-income New Zealanders buy EVs or hybrids.
People on low incomes will be able to trade in their polluting vehicles and receive money to upgrade to an EV or hybrid. The funding pays for an initial trial of 2500 vehicles, tagged at $15.9m a year for the next two years, before increasing to $242m in 2024/25. But some in the industry warn that it won’t be enough.
The funding will not just be for electric vehicles, but it could go towards purchasing an e-bike or public transport vouchers. But details about how the scheme would work, who would be eligible, and how much financial help they would receive, were sparse.
Climate Change Minister, James Shaw, said yesterday that it would follow a similar scheme to what was introduced in California. There, one scheme offered people around $15,000 NZD off the price of a new or second-hand EV.
But even if that was offered here, the Motor Industry Association (MIA) warns it would still be costly, and “notoriously challenging.”
Chief executive, David Crawford, says the cost of a new EV import starts at $40,000 and goes upwards of $80,000, and used models start 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,” says Crawford.
In New Zealand, there are many unsafe and high emitting used vehicles being driven around, so the MIA says it supports moves to get these off the road.
But the Motor Trade Association (MTA) wants the Government to go even further, introducing a scrappage model for everyone.
Ian Baggott, energy and environment manager of the MTA, says it would be a huge challenge for the government to determine the criteria for scrappage.
He says that the criteria for ensuring people “don’t game the system” needs to be determined. “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 says.
He believes that the Government should look into the whole car-owner market and provide the discount to all Kiwis.
Victoria University of Wellington’s environmental studies, Professor Ralph Chapman, believes that cars, whether they’re electric or not, are still too expensive and harmful for the environment. He says rather than scrapping an old car and buying an EV or hybrid vehicle, the alternative option of using the money towards an e-bike or public transport is a good move.
“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 wastewater … when you start to add it all up, cars are pretty much a disaster.”
He also says there are still carbon emissions that go into the making of an electric vehicle, as well as importing them to New Zealand.
“The whole model has to change, rather than just encouraging people to go to a slightly more efficient car.
A spokesperson for Free Fares, which is lobbying the Government to make all public transport free, says 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”.
Keyword: EVs won't be affordable for low income families, despite new subsidy