Toyota NZ urges Government to rev up climate stance

Country’s top car seller says a feebate a must to get wheels moving

Neeraj Lala.

NEW Zealand risks becoming the “Cuba of the South Pacific”, a dumping ground of Europe’s dirty diesels and high carbon-emitting petrol-fuelled cars.

That’s the view of Toyota New Zealand’s chief executive officer, Neeraj Lal, reacting to recent occurrences of political shift toward encouraging a shift from fossil fuels and toward more environmental motoring solutions, including battery-motivated products.

His comments come in the wake of two big headline actions: The move by the United Kingdom to ban sale of new fossil-fuelled cars after 2030 and our own Government’s determination this week to formally joined 32 other countries around the world in declaring a state of climate emergency for New Zealand. 

The NZ initiative brings with it a revitalised focus on electrifying its public service vehicle fleet, thorough prioritising fully electric and hybrid cars, and plans to become carbon neutral by 2025. 

That’s conceivably a switch Toyota NZ cannot leverage to advantage as much as some other brands as even though Toyota hybrid cars are highly favoured by private and fleet buyers, they are not considered electric models, because they lack facility to recharge off the mains.

The Government’s climate response decision has been welcomed by not-for-profit pressure group Drive Electric, though this organisation - which involves 17 new car brands, including TNZ - says the move still doesn’t go far enough.

Mr Lala says the UK’s move is both an encouragement to New Zealand policy-makers and a danger sign that this country could be flooded with used internal combustion engine (ICE) vehicles at the end of this decade.
 
New Zealand needs to work urgently on the right policy settings that encourage much higher take up of electrified vehicles through meaningful financial incentives, he said today. 

“We also need to make sure that we do not end up importing vast numbers of ICE passenger vehicles. Otherwise there is no hope of meeting the Paris Agreement’s 2050 net-zero carbon target.”

A push by new vehicle distributors, via their representative body, the Motor Industry Association, to introduce the ‘feebate’ that incentivises purchase of low and no-emissions cars has TNZ’s support. Mr Lala said the scheme, proposed in the last Parliamentary term by kyboshed by the Government’s then-partner, NZ First, has much merit.

The core element of the scheme is that it incentivises private and fleet buyers of low-emitting vehicles by adding a levy to high-emitting vehicles and using that revenue to reduce the price of low-emitting vehicles costing less than $80,000.

Mr Lala also reminds that the era of Covid-19 has affected car makers ability to produce and ship vehicles.

“As the worldwide supply of hybrid and battery electric vehicles becomes stretched due to global demand, New Zealand will find it harder and harder to access stock without a financial incentive.

“Essentially, we need to get our hybrid and EV numbers up to get higher stock allocations.  

“The feebate scheme should be back on the table, urgently. Toyota New Zealand has opened a dialogue with the Minister of Transport, Michael Wood, and will continue to advocate for financial incentives for electrified vehicles.”

TNZ is easily the biggest seller of mild hybrid vehicles in this country – and is now seeing hybrid editions of popular models outselling their fully fossil-fuelled equivalents. However none will conceivably be considered when Government weans off fossil-fuelled cars in public service use and into electric models, as proposed.

the rav4 hybrid has become massively popular and outsells the fully fossil-fuel alternates.

The market leader has just one plug-in hybrid car, a version of the Prius, but will add another, in the form of a PHEV edition of its most model of the moment, the RAV4. It has plans to deliver an electric car in 2021.

Mr Lala has applauded Government for confronting environmental issues, but says it needs to put financial resources behind its policy.

“Companies such as Toyota (NZ) would be willing to supply the public sector with low-emitting vehicles, but not at cost – it needs to be a win-win for both parties.
 
“With transport emissions accounting for nearly 20 percent of all carbon output, we have a large influence on how New Zealand will progress to a zero-carbon economy. The transition to a low emissions transport market comes with a price tag, but the cost of not enabling a greater uptake of low emissions vehicle could cost Aotearoa/New Zealand and the planet a lot more.”
 

Feebate 'best' route to lower exhaust emissions

Forget about banning gas guzzlers – convince motorists to buy low-emission vehicles, says the new car industry’s voice.

The lower a passenger vehicle’s emissions, the bigger the incentive, the MIA believes.

NEW vehicle importers have begun urging the Government to introduce a feebate scheme to accelerate the uptake of low-emission vehicles.

In a move obviously designed to see off any chance of an outright ban on importing vehicles fuelled by petrol or diesel, as has just been suggested by the Green Party, the Motor Industry Association, which presents new vehicle distributors, is pushing for new policies aimed at incentivising motorists to buy passenger models with the cleanest exhaust emissions – or none at all.

Chief executive David Crawford says members are strong supporters of having effective policies to encourage the reduction of carbon emissions from transport.

The way to do that is not to introduce policies aimed singularly at limiting vehicle supply. This would happen if the Government adopted the United Kingdom’s decision to ban pure petrol and diesel vehicles from as early as 2030. More preferable is to have policies that influence demand by incentivising the adoption of low technology technologies, Crawford says.

Such policies would be effective tools so long as they were implemented in a way that addressed the price premiums the low-emission vehicles have, he adds.

And the best way to achieve that is to introduce a feebate scheme that encourages car buyers to choose vehicles that are more efficient and less polluting, through rewarding those who do by giving them a rebate on the purchase price, funded by fees added to the price of less efficient vehicles.

“Because the distribution of new vehicles in New Zealand is a derived demand model, a well-designed feebate scheme incentivises change as it influences the purchase decision,” he says.

“This in turn alters the mix of models supplied by distributors which is more influenced by what is bought, and therefore restocked, rather than policies aimed singularly at limiting supply.

“Low emission technology is expensive, so policies that address low emission vehicle affordability are likely to be the most effective tools available to the Government.”

The previous Government proposed a ‘clean car initiative’, a ‘clean car standard’ (which would be a vehicle fuel-efficiency standard) and a ‘clean car discount’ (which would apply a rebate or penalty depending on exhaust emissions).

At the time, the MIA said it welcomed sensible discussions on ways to make vehicles cleaner and greener, and it promised the new car sector would work constructively with Government to help  create the best mix of policies to achieve that outcome.

The organisation didn’t like the ‘clean car standard’, because it implied that distributors had a significant influence on what vehicles Kiwi motorists chose to buy. It claimed that policies aimed at controlling supply into our market, imposed artificial controls that could distort the market.

But the MIA was particularly keen on the proposed ‘clean car discount’, as it would send a very clear signal to consumers and would over time increase demand for lower emitting vehicles. The MIA said that in its view it would be the most powerful policy available to the Government to influence car purchase decisions.

However, later in the year the whole ‘clean car initiative’ came to a screeching halt when the kybosh was put on the proposal by New Zealand First, a partner in the then coalition Government.

The MIA is asking for the ‘clean car discount’ to get picked up again by the new Labour Government, and as originally suggested it should apply to all light vehicles of less than 3500 kilograms gross vehicle mass.

Under the MIA’s proposed feebate scheme, vehicles with CO2 outputs of 230 grams per kilometre and above would pay a penalty, those with emissions of between 100-230 g/km would be in a “neutral” zone, those with emissions of between 50 and 100 g/km – which would be some hybrids and most PHEVs - would attract a low rebate, and those with CO2 outputs below 50 g/km would attract the highest level of rebate.

“If the Government were prepared to put say $10 million a year for several years into the feebate scheme, then the level of rebate for low emissions vehicles could be higher thereby significantly increasing the rate of uptake of low emission vehicles,” says Crawford.

He adds that the level at which a fee or rebate (and the size of the neutral zone) would need to be lowered with each successive year, so that over time these would become more challenging. If the Government agreed to contribute to the rebate fund this would also reduce over time.