Dealer calls for faster EV feebate scheme as the MTA lists its niggles

Friday, 9 August 2019

Dutchman Weibe Wakker was one of the latest high-profile visitor to Bluff's Stirling Point sign, completing a three-year journey in July last year from the Netherlands in his converted electric Volkswagon Golf named the 'The Blue Bandit'.

Some car-buyers are already deciding to delay buying electric vehicles until 'feebates' kick-in in 2021, according to a Christchurch car dealer who is calling for the Government to speed up the incentive scheme for EVs and other low-emission vehicles.

Andre Hopman, principal of Hopmans QEII Cars, said that some people had been delaying buying EVs for two or three months in the run-up to the announcement of the long-awaited incentive scheme by the Associate Transport Minister Julie Anne Genter last month.

When they found out it would not kick in until the start of 2021, some lost patience and decided to buy now, but others had decided to continue waiting for the incentives, he said.

'Two years is too long,' Hopman said. 'I think the Government has to move quicker. It is a wee bit disappointing.'

Toyota Hilux's would attract a $2750 import fee under the Government proposal.

* Government considered $2000 subsidy and age limit on imported vehicles instead of feebate

* Government scheme could slash prices on cleaner cars, and make dirtier cars more expensive**

Genter said she wouldn't be surprised if there was a small drop in electric car sales prior to discounts coming in.

'The good news for car dealers is once the discounts kick in they'll see a big jump in demand for the product they're selling.

'If dealers would like to see an earlier start date I would strongly encourage them to make that clear in their submissions to the Ministry of Transport.'

The Motor Trade Association believes the Government's average emission target of 105 grams of carbon dioxide per kilometre travelled by 2025 may be going 'too far, too fast', but a Swedish expert believes it is too cautious.

Genter unveiled the feebate scheme last month, saying it would help families afford fuel-efficient vehicles that were 'better for the climate and their back pocket'.

New high-emission cars such as petrol Range Rovers and Toyota LandCruisers would face a maximum $3000 import fee, which would pay for a rebate of up to $8000 on new EVs, with the maximum fees and rebates on second-hand cars fixed at $1500 and $2600 respectively.

Smaller petrol cars could expect a rebate for several years, with models such as new Ford Fiestas potentially attracting an initial $1100 rebate.

But over time, more vehicles with middling emissions would gradually attract fees, and the rebates for low emission vehicles would decline, to keep the fees and rebates in balance as purchasing patterns changed.

At the same time, a new 'clean car standard' would force dealers to gradually reduce the average emissions of cars they imported, to 105 grams of carbon dioxide per kilometre by 2025.

Motor Trade Association (MTA) strategy manager Gregg Epps said it supported feebates, but wanted a 'just transition' and believed the Government might be trying to go 'too far, too fast' with the 105g carbon target.

'We may see brands exit, because some brands such as Isuzu deal mainly in large cars – they don't have the small vehicles to offset.

'So this is the Government forcing a new business model on Isuzu. If they want to participate in the market they have to start bringing in small cars.'

The MTA questioned some of the assumptions officials had made to model the future balance of imports, he said.

'There is an assumption about a 30 per cent increase in EV imports and we don't know where those are coming from.'

The MTA also believed both the feebates and the clean car standard could be undermined by a loophole for private car importers, he said.

If the loophole wasn't closed, it foresaw entrepreneurs setting up online platforms to help private cars buyers import higher-emissions vehicles direct from overseas to avoid import fees, also undermining consumer protections in the industry.

'None of these penalties apply to privately imported vehicles, so we expect we will see a whole bunch of business people offering to broker imports for people.'

Genter said she was confident the Government would find workable solutions to that sort of regulatory challenge.

'Both Government and industry want a level playing field with all dealers playing by the rules.

'We're consulting with the vehicle industry right now to ensure we design a scheme that's robust and fair and avoids situations like this arising.'

In contrast to the MTA, Swedish EV policy expert Jakob Lagercrantz, speaking from the EV World conference in Auckland, argued the 105g carbon target was 'a bit cautious'.

'I have told officials that if I were them, I would leave it open to strengthen that target along the way.

'Europe has a 95g target from 2021, so why not align?'

Sweden imported a record number of 'gas guzzlers' during the month before it introduced a feebate scheme in July last year, as buyers rushed to beat its introduction, Lagercrantz said.

'April and May were normal, it was just the last month.'

A lull in EV sales ahead of the application of feebates was a concern, but 'just life', he suggested.

'Maybe the Government can speed some things up, but New Zealand is a 'consensus country' where you need to discuss and debate things openly'.

New Zealand's feebate proposal had many merits and 'the few kinks' that were in it could be sorted out afterwards, he said, suggesting a review after two years.

Offering incentives to import low-emission conventional petrol cars as well as EVs 'surprised him a bit', he said.

Submissions on the feebate scheme and clean car standard close on August 20.