Feebate: Huge uptick in electric vehicle and plug-in hybrid sales in early weeks of new scheme

Tuesday, 20 July 2021

The Government's feebate scheme (video first published in June).

More than 1300 electric or plug-in hybrid vehicles were registered in the first 19 days of the Government’s new “feebate” policy taking effect.

Though a small fragment of the overall light vehicle market, that number was higher than the two months of electric and plug-in hybrid sales that preceded it, and about triple the daily average for the first half of 2021.

Ministry of Transport statistics show the rate of registrations has roughly trebled.

But the National Party says public-sector purchasing may have slanted those numbers and it was far too early to tell if the policy had succeeded.

According to Ministry of Transport figures released to Stuff, 1357 electric vehicles or plug-in hybrids were registered from July 1 to July 19 – including both brand-new vehicles and newly imported secondhand vehicles.

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An electric-vehicle charging station in Nelson.

National's Michael Woodhouse says it is too early to know if the feebate policy is working.

The Government introduced the “feebate” policy from July 1, subsidising electric vehicles and plug-in hybrids by up to $8625, in a bid to lower transport emissions.

The scheme will eventually look to pay for itself by penalising sales of higher-emitting vehicles. This has led to strong opposition from National, which describes the policy as a “ute tax”.

In the first 19 days of the policy, an average of 71.4 electric vehicles or plug-in hybrids were registered every day. That was up from about 21.7 a day in the first six months of 2021.

A spokesperson for the Ministry of Transport said for brand new electric vehicles there was no obvious drop in June after the policy was announced, but there had been a slight drop for used EVs – suggesting some people may have been deferring their sales.

Those 180 “postponed units” were more than matched by 383 additional used vehicles in July so far, however.

National’s transport spokesman, Michael Woodhouse, said it was too early to tell if this had marked a trend, and he suspected some central government entities had made some large purchases in the early weeks of July.

“It’s too early to say whether this marks a trend in increased purchases of EVs and PHEVs as a consequence of the discount. That may well be under way, but we need to see what the trend is,” Woodhouse said.

He noted that public-sector entities were able to claim the rebate and might be making large purchases.

National opposes the feebate, arguing that farmers and tradespeople shouldn't be penalised when buying work vehicles if there is no realistic alternative.

Woodhouse said National instead favoured using the Emissions Trading Scheme to nudge purchases towards cleaner vehicles.

Transport Minister Michael Wood agreed that it was early days “but these are positive early signs”.

“Overall we are comfortable with the rollout, and there is good evidence that Kiwis across the country are keen to get into cleaner cars when we put the right policies in place.”

While a substantial uptick, it is likely that petrol and diesel-powered light vehicle registrations will still dwarf electric vehicles and plug-in hybrids.

In the first three months of 2021, just under 73,000 light vehicles were registered in New Zealand, with just over 2000 of them being electric or plug-in hybrid.