‘Penalty on a plug’ – MPs told EV taxes would be too high

‘Penalty on a plug’: Warning EV taxes are too high

The government’s proposed new taxes on electric vehicles are far too high, the motor industry and consumers have told MPs at a select committee.

It wants to charge up to $70 per thousand kilometres driven and those who rushed to make submissions to the select committee were not impressed.

They pushed back against what one submitter described as a ‘penalty on a plug’.

Six motoring groups – including new and used dealers, car importers and the AA – joined together to make a submission saying they could get behind lower rates of $60 for pure EVs (down from $70), and $42 (down from $50) for plug-in hybrids.

But they said the current proposal to levy Road User Charges (RUC) was unfair and added to a perception that the government was putting a “penalty on a plug”.

Carbon market consultant Christina Hood urged MPs to go further and lower the proposed EV rate by half, noting the difference in tax paid between some similar-model petrol and electric cars was about $500 a year – four times as much as the carbon price paid by the petrol car’s driver, for carbon pollution.

Transport Minister Simeon Brown wants to make further changes to the law so that all cars – including petrol ones – pay road user charges on the same basis as EVs. Switching petrol cars from paying fuel tax to paying road user charges is part of the National Party’s coalition deal with Act, and would level out the differences brought in by bringing EVs into the RUC system.

But the motoring groups are sceptical it will happen as fast as the Minister is hoping, leaving an “unfair” gap.

Motor Industry Association chief executive Aimee Wiley said any delay levelling the impacts would hurt EV uptake.

“It is industry’s opinion that this will take years not months and we are very concerned about what will happen to EV demand [in meantime],” she said.

Kirsten Corson of Drive Electric said the drop in EV uptake under the current government was alarming, and the industry saw no signs of recovery this year.

Secondhand Nissan Leaf owner Joshua Joe told the committee he and his partner bought the EV for $12,000 to save both money and emissions, but now he feared other young people would not do that.

Documents released by the transport ministry showed the rates were set after considering a range of factors, including manufacturers’ stated fuel efficiency and Consumer NZ’s real-life tests of plug-in hybrids.

But since the change was announced, some owners of EVs and plug-in hybrids say their vehicles’ values have plunged because of the proposed tax rates.

Sam McLean of Tesla Asia Pacific told the committee New Zealand was unusual globally in experiencing a decline in EV uptake, after the clean car rebate was scrapped in December.

He said the proposed charges favoured some of the most polluting cars, and “rushed law is often bad law”.

The select committee is due to report back to Parliament today.