Toyota boss doesn't expect Government to change position on emissions targets

Friday, 10 December 2021

Toyota New Zealand CEO Neeraj Lala fully expects the Government to ignore the car industry’s advice on emissions standards.

The country’s dominant seller of new passenger and light commercial vehicles doesn’t expect the Government to heed its advice on why impending emissions standards are flawed.

Toyota New Zealand, an industry leader for 30 years that currently sells 40,000 new and used cars annually, has been strenuously putting its case about future national motoring and mobility trends to Government, mainly to persuade a legislative rethink.

A submission on the Emissions Reduction Plan to the Ministry for the Environment followed a pitch, alongside other brands, to a mid-November hearing into the Clean Car Standard, whose intention is to reduce CO2 emissions, starting in earnest with the ‘ute tax’ effecting on April 1.

At an event promoting arrival of Toyota’s first fully electric model, the Lexus UX 300e, TNZ’s chief executive Neeraj Lala doubted the Government will be diverted.

TNZ is among brands that sees merit in a standard aiming to cease availability of new fossil fuelled products by 2035 but is also firm some targets, notably those for 2026 and 2027, set too high a bar.

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Lala says Transport Minister Michael Wood is wanting to ‘defribrilate’ the industry into quick action, but warns that New Zealand is a ‘technology taker’ so can’t actually move faster than overseas markets.

Those concerns were raised with the Transport and Infrastructure select committee on November 16, but he doubts that’ll change anything.

Government planning was too entrenched now to be altered and the committee process was simply “politics.”

“I don’t believe the Government will change their position … I honestly don’t.”

He still believes Transport Minister Michael Wood is trying to “defibrillate” the industry into quick action, to shift the needle on carbon emissions.

“The Minister have been quite transparent around wanting to defibrillate the industry and we’ve been cautioning them that if the power is too high on the defibrillation machine it might fry … rather than boost back to life.

Toyota’s first EV, the bZ4X SUV, will launch globally next year.

“But I don’t believe they will change their position. It is going to be a case of car companies needing to accelerate the lowering of their carbon footprint, which is what we (TNZ) are doing.”

Among initial processes is intent to phase in a stepped reduction in the average emissions of almost all new and used imported passenger models to 145 grams per kilometre travelled in 2023, dropping to 63.3g/km in 2027, with financial penalties if the targets are not met have upset.

Lala says achieving the first target will be a seismic shift. The second would require NZ having the world’s lowest emissions average and is too great a reach.

“I don’t believe that the 2027 target is realistic or achievable for most car companies.”

Even though he did not imagine that it was Government’s specific intent to decimate many of the players in the new car market, that would nonetheless be the outcome.

“They are wanting to create acceleration and a trajectory of significant improvement and I think there will be some negotiation closer to (that) time rather than starting that negotiation too early.

“We have another series of meetings with Ministers on Monday (December 13) where we will continue that discussion, but I cannot see them changing.”

TNZ’s boss contends the mooted ideal of favouring more environmentally friendly technology do not reflect the availability of battery electric vehicle technology designed to meet NZ market conditions.

His brand contends that while the EV charging network as it stands is well-planned, it doubts the infrastructure or energy suppliers could cope with an envisaged uptake of one million-plus electric-replenished cars in national circulation by the end of the decade.

It also reminds that EV production does not divorce from pollution; China’s world-leading EV industry creates high levels of CO2. “The reality is that volume production in China produces the highest emission.”

Other TNZ arguments include thought that adoption of the standard will adversely impact on new vehicle affordability and could result in lower cost and less safe vehicles being imported. It also feels the targets will result in crippling penalties that detrimentally impact on supply, consumers, and businesses.

Government’s strategy is to emulate, albeit in a shorter timeframe, an action adopted for Western Europe, which has the world’s most ambitious climate plan.

Just last week Toyota Japan surprised with a vow to be ready to sell only zero-emission cars, including Lexus products, in Europe by 2035.

Toyota also set a new intermediate goal for at least half its sales in Western Europe to be zero-emission vehicles by the end of the decade; a big step up from the roughly 10 percent sales mix expected in 2025.