Electric models key to steering clear of CO2 tax impact, GLMD explains.

EVIDENCE of the potential financial impact of the Clean Car Standard has been outlined by the importer of LDV and SsangYong vehicles.

The standard, which enacts on January 1, is the next step of the Government’s CO2 reduction plan and aims to persuade new distributors to introduce more low/no emissions vehicles, by setting them an average CO2 target.

If the target is met or improved upon, the distributor earns a credit. If not, it pays a penalty fee, calculated per gram of exceeded CO2 per vehicle. Credits can be used to offset any charges.

Next year Great Lake Motor Distributors hopes to sell 4000 vehicles. Were its mode mix for that period comprise as it was in 2021, it would face a $9 million tax bill next year – equating to an average price rise of $2000.

That loading would rise to $3000 in 2024, to $4500 in 2025, to $6000 in 2026 and to $7500 in 2027, when the operation’s CO2 tax liability would be $31 million.

That likely won’t happen because it has since added electric models, with more to come. The latest from LDV are the Mifa 9 people carrier and the e-T60 utility (pictured below), right-hand drive supply of the latter having now began.

However, GLMD general manager Andrew Bayliss (above), made clear during a presentation at an event for Mifa 9 on November 23 that customers will ultimately be asked to pay more for vehicles if a distributor has to pay penalties. “The tax bill would have to be passed on.”

He added however that the standard will be complex, as importers will be able to defer payments by a year to give them a chance to offset the tax with future credits.

Bayliss said GLMD estimated that to mitigate fees next year, it will have to sell an electric model for every four and a half ICE models. In 2027, it will need to sell two EVs for every ICE model to ensure its CO2 average is met.

“Luckily we are in a fortunate position, because our LDV commercial vehicle brand has a huge range of EVs,” he said.

“This will allow us to transition from predominantly ICE vehicles to EVs during 2023.

“Our EV customer inquiry is already ramping up – its already 10 to one EVs over ICE.”

GLMD’s view is that whereas EVs account for 11 percent of national new passenger and SUV sales, it achieves just one percent of commercial sales.

“That means we have a 99 percent opportunity with our commercial vehicles.

“We’re already on the All of Government Vehicle Supply list, which means our eDeliver 3 and eDeliver9 vans and eT60 ute are now in the Government supply catalogue.

“We’ve also just taken delivery of the first 100 eT60 utes, all of which have been pre-sold. So we see massive opportunity presenting itself next year.”