Toyota NZ says government push on car emissions has helped it get cleaner stock

Monday, 15 November 2021

Transport Minister Michael Wood says proposed emissions limits on imported cars will only put NZ in the middle of the pack.

Toyota New Zealand chief executive Neeraj Lala says proposed laws designed to reduce greenhouse gas emissions from cars have helped it secure less polluting stock from its Japanese parent.

But Lala told MPs that a proposed target to reduce the average carbon emissions of new and used imported vehicles to 63 grams a kilometre travelled by 2027 was too tough, and he suggested it could lead to smaller car brands exiting the country.

Toyota, Nissan, Ford, Hyundai and Mazda are all rallying behind a proposal by the Motor Industry Association to water down emissions reductions targets set out in a proposed Clean Car Standard.

The car makers say New Zealand should aim to achieve the same carbon reductions currently agreed by the European Union, but two years later than Europe, noting New Zealand is starting from a worse position with a more gas-hungry fleet.

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Transport Minister Michael Wood speaks at the release of the Ministry of Transport’s green paper (first published May 14, 2021).

Parliament’s Transport and Infrastructure select committee is currently examining the Government’s proposed Clean Car Standard.

It would phase-in a stepped reduction in the average emissions of most new and used imported passenger vehicles to 145 grams per kilometre travelled in 2023, dropping to 63.3g/km in 2027, with financial penalties if the targets weren’t met.

Lala said Toyota backed the legislation and the Government’s targets for 2025, but wanted it to withdraw the tougher targets it was seeking to achieve in 2026 and 2027.

Toyota NZ boss Neeraj Lala backs the Clean Car Standard, but says its 2026 and 2027 targets set too high a bar.

Car makers have stressed throughout the select committee inquiry that they are competing with other markets around the world to secure a limited supply of electric and other low-emission stock from their parent companies.

Nissan New Zealand managing director Ben Hamilton told the committee it had only been able to obtain 45 Nissan Leaf electric vehicles over the four months since July.

“The outlook for any improvement in supply in the medium to long term for our battery-electric Leaf is poor due to material shortages globally,” he said.

Mazda New Zealand product manager Tim Nalden indicated last week that the industry was largely “tied at the hip” with Australia when it came to sourcing new cars.

But Lala said the Government’s decision to introduce legislation targeting emissions had helped Toyota NZ in negotiations with its parent.

Transport Minister Michael Wood was trying to “defibrillate” the industry into quick action, to shift the needle on carbon emissions, Lala said.

“We do admire that because we have had some success in the short term with negotiating with Toyota Japan on introducing some low emission products and securing volume of some hybrid products,” he said.

But Lala said he did not want to see car makers “disappear” because of a fear they would not be able to achieve the 2026 and 2027 targets.

He clarified to the committee that he was not suggesting Toyota’s presence in New Zealand was threatened.

The fact it sold 40,000 new and used cars each year enabled it to be “a little bit more resilient”, he said.

“But for some manufacturers that potentially don't quite have that size and scale, the target of 63g/km does put them under considerable pressure,” he said.