What exactly does the Clean Car Discount mean for car buyers?

Friday, 18 June 2021

The scheme has a cutoff of $80,000 including GST and ORCs. Not all of these EVs will make it.

Recently the Government launched the Clean Car Discount scheme aimed to encourage the uptake of low and no emission cars in New Zealand, but it’s not just about EVs, so here's look at the most common questions people have asked us about it.

What vehicles are eligible?

Here is every new EV on sale in New Zealand now that qualifies for the Clean Car Discount.

Waka Kotahi says the Clean Car Discount is available to all new and used light electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) imported and registered in New Zealand from 1st of July to the 31st of December 2021. A light vehicle is a car, SUV, ute, van or truck weighing no more than 3.5 tonnes.

Vehicles must cost less than $80,000, including GST and on-road costs, and have a safety rating of 3 stars or more on the Rightcar website.

The full Clean Car Programme kicks in from tomorrow.

Straight hybrids (without the ‘plug-in’ bit) are not eligible for a rebate in 2021, but a number will likely become eligible in 2022, when it is proposed that a range of discounts and fees will be introduced based on the CO2 rating.

The scheme only applies to light vehicles newly imported into New Zealand, so existing used cars won't attract any fees or rebates.

How much will I get off a new car?

As of the 1st of July new car buyers will get a rebate of $8,625 on any electric vehicle (EV) under $80,000 including GST and on-road costs, or a discount of $5,750 on any plug-in hybrid electric vehicle (PHEV) of the same value.

From the 1st of January 2022 this will change to a sliding scale based on CO2 emissions to include low emission vehicles, such as hybrids, with the maximum discount remaining $8,645 for a zero-emission vehicle under the $80,000 cutoff, and decreasing based on CO2 emissions.

There will be a ‘zero band’ where vehicles with CO2 emissions of between 146g/km and 192g/km get no rebate and attract no high emitter fees, and anything emitting more than 192g/km will attract a fee up to a maximum of $5,175.

How much will I get off a used car?

Used imports follow a similar path, but with lower discounts and penalties. From the 1st of July a newly-registered used import EV up to $80,000 including GST and on-road costs will be eligible for a rebate of $3,450, while a PHEV will be eligible for a $2,300 rebate.

From the 1st of January next year this too will switch to the CO2-based sliding scale for all newly-registered used imported vehicles with a maximum rebate of $3,450 and a maximum high CO2 fee of $2,875.

The scheme doesn’t apply a discount off the price – you have to purchase and register the car before you get the rebate.

How do I get the rebate?

The rebate isn’t taken off the sticker price of the vehicle, so don’t go into a dealership expecting an instant discount – you have to actually buy the car first, have it registered in your name and then apply for the rebate.

The registered owner of the car needs to apply online to Waka Kotahi and present the sale agreement, the number plate of the car and their bank details and the rebate will then be transferred into their account.

Likewise, when the fees come into play next year, they must be paid to Waka Kotahi at the time of registration.

Under the current indicative numbers your new Ford Ranger would attract a fee. Or not, depending on the model.

How much extra will I pay for my diesel ute?

This is probably the biggest question, as well as the biggest unknown and biggest source of wild speculation at the moment. The high-emitter fees will be based on a sliding scale of CO2 emissions from 192g/km of CO2 and up, so will vary from vehicle to vehicle, and even on different models of the same vehicle.

The maximum charge a high-emitting vehicle will attract is $5,175 for a new vehicle or $2,875 for an imported used one.

While there is a lot of speculation swirling around about what fees a diesel ute will attract, the Government is yet to specify the actual limits and has only released a few very specific example, saying that all figures supplied so far are “indicative and subject to legislation” so may well change. There is also a lot of speculation that doesn’t take into account specific models that may have different engines.

Current economy/emissions testing doesn't give real-world figures. The WLTP system does, says the industry.

A good example of this is the Ford Ranger that is available with either a 147kW/470Nm 3.2-litre five-cylinder turbo diesel engine that Ford claims emits 229g/km of CO2 in double cab 4x4 XLT guise, or a 157kW/500Nm 2.0-litre four-cylinder turbo diesel that emits 177g/km in the equivalent double cab 4x4 XLT guise. Based on the figures supplied so far the 2.0-litre Ranger won’t attract a fee, while a 3.2-litre one would.

But in an added twist, both of those claims are calculated by Ford using the Australian ADR 81/02 testing cycle that is largely regarded as wildly inaccurate and out of date.

ADR 81/02 is a laboratory-based test that the Australian Automotive Association (AAA) has been particularly vocal in its criticism of, saying that the gap between real-world and lab-test efficiency averages around 23 per cent.

During testing for part of a report it calls Welcome to the Real World, the AAA found that the worst car tested used 59 per cent more fuel in the real world than its claimed figure.

Both the Energy Efficiency and Conservation Authority (EECA) and RightCar use figures supplied by the manufacturers, which can vary between the New European Driving Cycle (NEDC) test, the more recent World harmonised Light-duty Vehicles Test Procedure (WLTP) that is replacing the NEDC test in Europe, or even a manufacturer’s own testing using the ADR cycle or similar.

Waka Kotahi says that, subject to legislation being passed, it is proposed that fees and discounts will be calculated using WLTP figures and that “vehicles supplied with other testing protocols will be converted to WLTP”.

Quite exactly what that means – or how the figures will be “converted” – remains to be seen, but depending on what figures the government chooses to use, the gap between the 3.2-litre Ranger and the 2.0-litre Ranger may well change, and the 2.0-litre may even end up attracting a fee as well – in the UK Ford uses WLTP figures and claims that the 157kW 2.0-litre biturbo has emissions of between 201 and 223g/km of CO2 depending on the model.

Most Japanese manufacturers use figures from the NEDC testing cycle, while most European manufacturers are in the process of swapping over to WLTP from NEDC and some still use both, although there are exceptions to both situations.

We should also remember that as well as the extra fees that do end up on high emitters, there are also the fines the distributors will incur if they exceed their CO2 target as a part of the wider Clean Car Standard that will kick in at the start of 2023.

If they can’t get low enough, distributors can choose to exceed the emissions targets and pay a penalty or buy a ‘credit’ from another importer that manages to undershoot its target. For example, from 2025, if a distributor brings in new cars with average emissions of 171g/km, they would need to pay a penalty of $4950 per vehicle.

This could be absorbed by the distributor, added to the price of the offending vehicles or spread across their entire range by way of a general price hike.

The upshot is, there is still a lot to be sorted out between now and the 1st of January next year, and we should expect the fuel consumption and emission figures of a number of manufacturers to shift from what we are seeing now, with any potential costs varying as well.