New vehicle industry says it knows the policy is dead - it just needs the funeral details ASAP.

UTE tax reducing from a maximum $6900 to $1 at year end has become a speculation as the new car industry becomes increasingly concerned about how Clean Car deconstruction will play out.

The National-led coalition Government has reiterated the emissions regulations introduced by the previous administration will be defunct by December 31 - but has yet to share detail on how this will occur. That’s put the car industry in a flurry.

Talk of Transport Minister Simeon Brown having opportunity to use discretion to knock down the penalty on high CO2 vehicles to a nominal figure at year end - thus placating the ‘rural and tradie’ voters he says have driven need to abolish low emissions rules - to avoid a legislative hiccup is being considered a rumour by the industry’s representative body.

Motor Industry Association chief executive Aimee Wiley (below) says it is inevitable such talk will arise until the Government spills out exactly how and when it will curtail CCD.

The industry body has no doubt the scheme is dead - it just needs all the funeral details, the sooner the better.

“Our members and the wider industry urgently need to know what to expect, we are rapidly running out of time.” 

To date, it has certainty only that the $7015 payout for electric cars selling for less than $80,000 will be axed by December 31, a pre-election target date. 

However it wants to know more about how and when the penalties on high emissions culprits will go. Until the whole strategy is spelled out, there will be uncertainty and speculation, Wiley fears.

Her own hope is that CCD will complete dismantle in one stroke.

“It would not be good for the industry if rebates go first and fees follow later,” she said today.

“There has been no indication that it will be just the rebate (gone) but we are watching it very closely.”

Though it agrees incentives were vital to turning motorist to low CO2 cars, the MIA also believes CCD has been inequitable and has run its course. 

Though it is not supporting a call on Government to consider different ways to incentivise EV uptake, this made from today Drive Electric, the MIA also concurs that influencer group’s ideal.

“We do support alternative and different ways to incentive EV uptake.  We will be supporting and advocating for all practical and pragmatic alternatives to be considered.”

Drive Electric fears electric car sales will collapse without ongoing support. Last week another pro-electric organisation, Better NZ Trust, also spoke out, seeking that Clean Car be kept until mid-2024.

Wiley acknowledges the next few months might grim for new EV distributors which, having amassed a glut of vehicles to meet pre-election sales conditions, are now heavily stocked and are hoping for a rebate rush that has yet to occur.

“That’s why we are seeing a lot of marketing and advertising campaigns on at the moment as they try to get them gone before the rebate is, for fear they might be a lot harder to shift immediately after.

“We are concerned about the impact this (end of CCD) may have on the uptake of low emission vehicles, particularly BEV’s. Ensuring continued momentum toward lower emission vehicles is crucial.”

While the next few months could be tough, the industry organisation believes the market will ultimately settle down.

The rebate is sought by an EV buyer at point of a car’s registration; the $7015 is for a brand new car, a lower payout applies to imported used stock. 

From industry perspective, ending the rebate is thought to be as simple as Brown naming a day and time when it will curtail. 

Winding up the penalty is considered a different matter. It’s effectively a tax, so requires legislative process. Is there enough time?

Even though the National-Act-NZ First coalition deal is settled, process to enable Government is still required, which will take several weeks.

Only after that can the matters it wants to address in its 100 day plan can be considered.

Wiley says it has been clear that ‘ute tax’ is a priority, yet effectively Government might have just a fortnight before Christmas break to sort everything out.

That has sparked lots of conjecture, including that Brown has mandate to alter the penalty as he sees fit - reducing it to a nominal $1 to placate those it suggest have been hard-hit by the tax: Ute buyers.

Yet in respect to the country’s favoured one-tonner, Ford Ranger (above), there’s been little real pain, the brand itself has confirmed.

Ford NZ spokesman Tom Clancy said some customers are holding off buying with CCD in play, 

“We do know that approximately 30 percent of our sales are on hold until fees come off. So we could be doing better.”

All in all, though, the model has done well this year, including this month, with close to 1000 registrations anticipated; a tally that is not far off bumper pre-CCD counts.

That should be enough to maintain it’s hold as the month’s No.1, a sales status it has often kept throughout the Clean Car period, and will likely ensure its almost decade-long run as the country’s best selling annual choice.

Wiley said the MIA didn’t disagree with the logic of CCD; it was the process it didn’t agree with.

“We just wanted one policy and we didn’t want it to change. Constant tweaking with the CCD caused so many problems and so much disruption for distributors, dealer network and consumers.”

It also has hope, nonetheless, some inducements might return when the new vehicle sector becomes an even playing field, with commercial vehicles that have taken the pain until now avail with electric-involved drivetrains now in passenger cars.

That technology step would avoid exposure to the penalties that arrive with diesel engines they presently have.

Ford has introduced an electric Transit van and but electrification one-tonne utes in the market-crucial four-wheel-drive format is still some way off. Ford might be first with its plug-in hybrid Ranger (below), due in early 2025. 

As with electric and electrified cars, the potential for these having to cop a price increase was inevitable and so, Wiley argues, the need for them being incentivised also rose.

“In future, when it’s their turn to get electrification it would be unfair if they did not have a turn (at receiving incentives), given they have had to pay a fee.”

However, it would not like to see CCD return in the same format as it has had.

“We’re advocating for alternative incentives that don’t necessarily have the same financial implications.”

NZ’s adoption of low CO2 cars had taken a big step forward with CCD and the industry did not want to see that progress stymied.

“We don’t want to go backward in the uptake of low emissions technology.”

NZ needed to continue strong EV uptake to be able to achieve transport CO2 emission reduction goals of 41percent by 2035 and net zero emissions by 2050.

When CCD began, there were around 40 models in the market that served as regulation compliant options. 

“Now there’s close to 200. 

“The policy has had its intended effect in that it has got the ‘right’ vehicles coming to NZ … I’m hoping consumer demand doesn’t wane. 

“In the short term, it will - if you lose a $7000 rebate, that’s a cost - but, in the medium to long term, I think the market will correct itself.”

When Clean Car Discount goes, another regime that also penalises high CO2 count vehicles remains.

Clean Car Standard is a regime of fees that affect product at point of arrival in the country and is paid by the distributor. It also ultimately caps, at around $7000, as CCD penalty has. Under Labour, it was planned as an annually rising cost, to 2025, then would be reviewed. CCS came into effect on January 1 this year and many distributors say they will have to pass on its impact to buyers.