Government intent to make good on road tax for electrics sparks up diverse responses.

BEGRUDGING acceptance, thought that plug-in hybrids are unfairly penalised to point they will lose popularity, bizarre argument that cars really don’t ruin roads and conjecture of potential avoidance tactics.

All that, and more, has come up on immediate comment across social media from electric vehicles owners to Government having made good on requiring owners of light electric vehicles and plug-in hybrids to pay road user charges (RUCs) from 1 April.

For light EVs, the payout is $76 per 1000km, in line with equivalent diesel-powered vehicles. For PHEVs, it’s $53 per 1000km. This rate assumes that on average, a PHEV will consume petrol at a rate of just under 3 litres per 100km.

Responses reflecting resignation to anger - and conjecture about how much damage light transport does versus the social good they bring - so flooded one top site that, by 8am today, it had closed down comment and advised members to move on to another subject.

That just a handful of commentators seemed genuinely surprised by yesterday’s announcement from Transport Minister Simeon Brown also reflected another element: That this date - and action - are old news.

Requirement for battery-assisted light vehicles to one day pay RUC was never in doubt.

It was signalled more than a decade ago, when electrics were novel and barely seen, notably coming to the fore in 2016, when product roll out was becoming obvious and Government of the day determined it could be an incentive to increase uptake.

Then Waka Kotahi NZ Transport Agency announced an exemption on electrics would last until December 31, 2021. 

It went for longer still, mainly because of the covid pandemic, but also because an implementation target - of EVs accounting for two percent of the national fleet - had not been reached.

Today, just over a year since intent for April 1 2024 implementation was announced, the penetration is all but established, with just under 90,000 electric vehicles in circulation, according to Drive Electric, a pro-EV lobby group.

Last year saw strong uptake of new electrified vehicles - a classification that includes mild, aka ‘self sustaining’ and non mains-replenishing hybrid cars which are targeted by petrol tax rather than RUC. 

Sales were up 45 percent against the 2022 count, by far the biggest year-on-year volume lift recorded. Almost 60,000 light vehicles within that category were sold, of which half drew mains electricity.

Also altered is the political landscape; though a point worth bearing in mind is that, while far more pro-EV than the new National-led coalition, the previous Labour Government ousted last October also intended to make good on the April 1 requirement, which was made clear under their watch.

New Transport Minister Simeon Brown, whose first action on taking office was to rescind electric car rebates and penalties on high CO2 vehicles, says bringing EVs and PHEVs into the RUC structure is in the interests of "fairness and equity”.

The change would ensure all vehicle owners contributed to the upkeep and maintenance of the country's roading network, irrespective of the kind of car they drove.

Says Brown: “With the increasing uptake of EVs and plug-in hybrids being brought into the RUC system, this means that these vehicles will now be contributing towards the maintenance and upkeep of our roading system like all other road users and will support the government's priority of building and maintaining our roading network.”

More tweaking could come, with Brown describing April 1 as a first step “in delivering on the National-ACT coalition commitment to bring all vehicles into the RUC system.”

Internal combustion cars are becoming more fuel efficient - those that use less petrol and contributing less in fuel excise duty. So, ultimately, Government intends RUCs on these, as well, to offset the lower tax take at the pump.

PHEVs, which power by electricity for limited distance and petrol otherwise, have also had to pay petrol tax.

But Government has decided that this is not to the same level as petrol equivalent vehicles, which mild - that is, non-mains replenished - hybrids are determined to be.

“To ensure that plug-in hybrids avoid paying twice through both fuel excise duty and RUCs, these vehicles will pay a reduced rate RUC.”

The government intends passing legislation to cover the reduced rate for PHEVs before the start date.

Controversial? It will be. Radio New Zealand aired a report that highlighted internal administrative concern from Waka Kotahi. 

The agency report of eight months ago forecast “an increase of non-compliance and debt for customers entering the RUC system” and expressed doubt the regulatory structure could cope.

So what happens now? Waka Kotahi/NZTA will get in touch with EV and plug-in hybrid owners about the change and what it will mean for them. 

Government has said those owners will need to buy a RUC licence from April 1. The first time this happens, they need to give their odometer reading.

Whenever a warrant of fitness is carried out, a vehicle's odometer will be reviewed. If the odometer exceeds the RUCs purchased by the vehicle's owner, they will be invoiced for any difference

There will be a two-month transition period to allow time for people to get registered in the RUC system without being penalised for unpaid charges.