Feebate has encouraged VW Group distributor to push for faster MEB model delivery.

EUROPE’S biggest provider of electric cars will be asked to accelerate local market release of its mainstream models now that Government has delivered a tasty incentive.

Drivers who buy new cars from July 1 will be able to get taxpayer-funded rebates of almost $8700 for a new electric or plug-in hybrid car, and about $3500 for used cars.

The inducement is an introductory to a full feebate scheme which will come into effect in 2022.

Brands already selling EVs here have reacted positively, with the national agents for MG, Renault and Hyundai immediately notifying that the clean car discounts will be available on their popular products. 

It has also invigorated Giltrap Group, the national distributor for Volkswagen Group, whose stated aim is to be the world’s biggest producer by volume of electric cars. 

A spokesman suggests the policy is a positive for encouraging a faster availability of mainstream VW Group cars that have previously been signalled as not being likely for up to two more years.

“The feebate and associated legislation will be helpful in discussions that we are having about accelerating the release of the products,” says Glynn Tulloch, Giltrap Group general manager.

The initial models in the spotlight are Volkswagen’s ID.3 and ID.4, SEAT/Cupra Born and Skoda’s Enyaq, all built on an underpinning, called the MEB platform, purpose designed for mass market sale and proving highly successful.

Although national pricing has not been determined, Tulloch says versions of all those models will likely be eligible for the plum incentive which only pays out on cars costing no more than $80,000, GST and on-roads included.

“If we were successful in getting MEB based products released, it’s likely they will start under $80,000.”

Initial hope of having MEB cars here by now was scuppered by various factors, including maker preference to favour markets that have subsidies akin to those the Government announced today and/or deadlines for cessation of sale of internal combustion engined cars.  

Giltrap Group has been focussing its attention in the premium sector, with Audi and Porsche models that price well above the Government’s rebate cut-off

It has always acknowledged the real opportunity for mass market penetration comes with the MEB platform cars, especially the ID models, which are planned to become a family of editions, including GTX performance models. VW NZ has desire to kick off with ID.4, a crossover recently named world car of the year.

Hyundai NZ has indicated, meanwhile, that the latest Kona electric crossover only now entering the market will be eligible for the incentive, as well the cheaper Ioniq hatch, but there is no suggestion its new-generation EV, the Ioniq 5, coming later this year will benefit.

The Kona II EV replaces the Kona EV, whose RRP in optimal format has been $5000 above the funding cut-off.

A release quoting Hyundai NZ general manager Andy Sinclair says “several models in Hyundai’s leading EV range are eligible for rebates … this includes the recently released Kona Electric Series II.”

Sinclair said while many Kiwis were embracing electric driving, “as with any new technology, the price can still be a barrier to entry. Any initiatives to get more Kiwis to consider electric vehicles is a good thing.”

MG has confirmed the MG ZS EV, already the country’s cheapest new car, will also become cheaper still, the rebate effectively reducing the starting price to $40,365 (plus on-road costs) to eligible buyers.

Renault NZ says an updated version of its Zoe city car, releasing in August, and the Kangoo EV van will also be eligible. 

The specific new car incentive announced today is for vehicles registered between the start of next month until December 31 (although applications will be accepted until the end of next February) and ties to a crash worthiness safety requirement. 

However, it is clear now NZ finally has an enduring policy to promote purchase of electric models, specifically those with mains-replenishment though hybrids will also benefit.

As expected, the implementation comes with announcement that those who buy petrol vehicles will cop a cost. From January of next year buyers of new petrol cars will have to pay a fee of up to $5875 while those buying newly imported used cars face fees of up to $2875.

That fee would be based on emissions; it appears – though has not been specifically spelled out - that vehicles, newly-introduced from that date, producing more than around 130 grams of CO2 per kilometre are set to be penalised. Those immediately below that level appaear set to be in the ‘zero band’ so do not incur a fee but also do not earn a rebate. Others with very low emissions – which could well be those meeting a 105g/km limit set to become a fleet average in 2025 - are incentivised.

The Government’s plan is expected to raise between $125-$188 million in its first year - and the revenue from the fee was expected to fully fund the rebates on EVs. 

The policy has been applauded by the Motor Industry Association, which represents new vehicle distributors, with chief executive David Crawford saying it’s heartening that, after several years of it calling for incentives for low emission vehicles, the Minister of Transport Michael Wood has announced their introduction. 

“We are delighted that at last the Government has confirmed details of their introduction.

“We are also pleased that the Government has had the foresight to bring in an interim rebate from 1 July this year for EVs and PHEVs while it takes time to put in place the regulatory law required for a full feebate scheme which will come into effect in 2022.

“The level of rebate offered is significant. It will in our view address in part the lack of affordability new low emission vehicles cost compared to their internal combustion engine (IEC) equivalent models.

“The rules around allowing the discount when calculating fringe benefit tax (FBT) and depreciation will go some way to addressing barriers to uptake of low emission vehicles by businesses. However, it stops short of the 50 percent reduction in FBT for electric vehicles we have consistently called for.”

Drive Electric, a non-profit promoting EVs, is also pleased, says the incentives and emissions standards will put NZ on the map for EV manufacturers.

Said spokesman Mark Gilbert: “We (NZ) are telling them, New Zealand is a serious market for electric vehicles and we want that supply. We are looking forward to them bringing in new ranges and models.

“For consumers, EVs are already cheaper over their lifetime than a petrol car, however the upfront costs are a barrier for the time being. This incentive levels the playing field between electric and petrol.

“It’s so important that we get EVs on the roads now, if we want to combat climate change. Any car bought today will be on our roads for the next 15 years. If that car is a petrol car it will keep polluting into the 2030s.

“The fleets owned by businesses and governments can also move more quickly towards electric vehicles. They will be an important source of secondhand EVs for New Zealanders.

“While the incentive is another important milestone, we cannot overlook the complexity of this challenge. We need electricity and charging infrastructure to meet new demand. We also need more walking, cycling, e-bikes and ride sharing. EVs alone won’t get us to a zero emissions transport system.”