Despite considering itself well-prepped for Clean Car, Hyundai NZ is still concerned about some impending Government actions.

SEVERAL legislative amendments tied to Government’s push to clean up vehicle emissions might be impossible to enact in the cited timeframes, will be costly for consumers and also disrupt vehicle supply, a leading motor industry figure contends.

While confident having a healthy count of compliant cars will give his own brand a good chance as Government’s intended vehicles emissions ambition under the Clean Cars mantle continues to realise, Hyundai New Zealand boss Andy Sinclair has misgivings about the overall impact of some Beehive intention.

The Clean Car legislation that kicked off in July with rebates for electric and plug-in hybrid cars will also penalise high emission models, with ultimate aim of pushing them out.

Intent to penalise vehicles that emit more than 192 grams per kilometre of CO2 – the so-called ‘ute tax’ because it particularly impacts on the one-tonne utilities that have been hugely popular - gets fully serious in 2023 with the Clean Car Standard.

Prior to this, though, another Beehive action appears afoot; adoption of Europe’s latest emissions standard, EU6, that is far more rigorous than EU5, the current standard.

The car industry understands Government intends to enact EU6 in 2022, perhaps as early as January 1 – that action is years too soon for NZ and, if it does happen, will be instantly and hugely disruptive, Sinclair says.

“We’ve told them clearly that this will not work.

“If they bring that in it will have massive effect on availability of vehicles and cost … there would be massive supply constraints and it could possibly cripple the industry at the start of 2022.”

The reason is that many manufacturers prefer, for expedience, to avail New Zealand with vehicles configured to meet standards set in Australia, where there no intent to introduce EU6 before 2024 at earliest.

“Manufacturers are not ready to bring into NZ Euro 6 vehicles. Euro 6 is far more expensive and demand (for those models) in Europe is huge and we would have massive supply constraints.”

In addition to being general manager of the prominent Korean make, Sinclair is also president of the Motor Industry Association, the industry group that represents the country’s new vehicle distributors.  

However, he enforced the views he expressed during a media event for a new-generation Tucson SUV were specific to his brand position.

Another gnawing concern is Government expectation that distributors can achieve, by 2025, a fleet average of 105 grams of CO2 per kilometre.

It’s an ongoing challenge, he says, to change the mindset of Government high-ups who still have belief that there is a multitude of electric cars in particular available and that the car industry simply chooses not to sell them here. That’s simply misguided, Sinclair says. Non-availability is genuine; NZ is a small market and we just don’t have priority with makers.

Sometimes NZ distributors could manage to get around that, as Hyundai NZ did in 2017, by buying Ireland-spec versions of its first full electric, the Ioniq. But such accomplishments were rare. Often, brands here simply have to wait until makers are able to officially supply.

New Zealand’s adoption of the EU standard - regulations put in place by the European Commission to restrict emissions from petrol and diesel vehicles – occurred some years ago and is not an issue for Sinclair. 

The regulations vary between diesel and petrol cars because of the different ways they work – with diesel it’s more about particulate counts and nitrous oxide outputs, where the petrol focus is on carbon monoxide and dioxide gas counts.

A number of European brands sold in NZ, across a wide price span, are already EU6-configured but many are not, Sinclair contends. He says maintaining those cars in the market would become increasingly challenging.

Many distributors might simply find they will no longer be able to deliver popular cars. The impact of this was that either customers will be denied their choices or will very likely also face price increases. 

Why go to EU6? Because it ties into a Government push to tidy up emissions and economy calculation.

It prefers the maker-cited fuel economies that present to customers to be calculated to latest world standard, called WLTP (world light vehicle protocol)

That measurement is considered a far more accurate real-world result than the NEDC scale that has historically applied.

However, only EU6-compliant cars come with WLTP counts. Most vehicle sold here configure to EU5 so maker-cited optimal economies for these are decided by the NEDC scale.

Government has already begun using a formula to convert NEDC counts to WLTP equivalents when working out what EU5-compliant models will sit above 192g/km. The conversion calculation pumps up the counts.

Building vehicles to EU6 is a higher cost to manufacturers - for soot reduction, diesels have to run AdBlue, a liquid urea additive. Hyundai diesel models sold here lack this, though the new fourth generation Tucson now could be availed in that format. Sinclair says he would prefer to avoid that if he could, as the system is a complexity he believes customers would likely prefer to do without.

As is, HNZ’s fleet-wide CO2 count, last measured at the end of 2020 as being 169g/km, is expected to drop significantly this year, mainly due to its electric cars.

The ground-breaking Ioniq 5, Hyundai’s first EV designed not to implement components also developed for fossil-fuelled cars, is the next of those arriving.

Other CO2-positive fare is coming. Hybrid and plug-in hybrid versions of the Tucson and Santa Fe sports utilities, with 52-55kms’ electric-only range, arrive next year. It has also just introduced a 1.0-litre version of the i30 hatch.

 Hyundai NZ had chosen to source the latest Tucson from a plant in the Czech Republic, rather than from South Korea (as Australia has done), so it can secure the battery-assisted cars. It is also selling a Europe market 1.6-litre diesel in preference to the 2.0-litre that South Korea would have provided, because the smaller unit’s emissions avoid a Clean Car penalty that would hit the larger engine.

Hyundai might also look to drop its highest CO2 count passenger vehicle, the Palisade with a petrol 3.8-litre V6 that emits 246g/km on NEDC (whereas the diesel edition outputs 195g/km), if it felt need to ensure a best-possible average, Sinclair has indicated.

He says Hyundai will benefit because Clean Car is already working to encourage buy-in of electric cars and his brand has the biggest rebate-eligible choice of those. 

Once penalties apply, that take up will increase, as the money paid in with fund the rebates to Green cars.

“The sale of electric and plug-in hybrids will increase and the Government will be hoping to see a decrease in the sale of high-emitting vehicles.”

With penalties on 192g/km-plus vehicles set to hit next year, he will not be surprised if the car market – already heading to achieve a record 165,000 registrations this year – sees a sales rush in the last part of the year as consumers seek to snap up vehicles that are set to be penalised.

The irony is that this will assuredly mean “this could be the year where we have the most emissions ever.”

He has no doubt that when the Clean Car Standard engages, vehicle prices will rise.

“Effectively it is a second penalty for high-emission vehicles as they are already going to be hit by the Clean Car discount and then by the Clean Car Standard.

“It is my belief we will be the only country in the world that has done both in the same time.”