Call to lower EV road user charges
Organisations representing the automotive industry have come together to call for a reduction in the government’s proposed road user charges (RUC) for light battery electric vehicles (BEVs) and plug-in hybrids (PHEVs).
An amendment bill aims to remove the RUC exemption for those vehicles from April 1 and proposes charging $76 per 1,000km for BEVS and $53 for PHEVs, with the lower price recognising those motorists also pay fuel excise duty at the petrol pump.
A joint submission on the plans from the Motor Industry Association (MIA), Imported Motor Vehicle Industry Association (VIA), Motor Trade Association, AA, Drive Electric and Better NZ Trust says the proposed fees are “not fair or equitable”.
They recommend BEVs should instead face charges of $60 per 1,000km and owners of PHEVs pay $42 for travelling the same distance.
Aimee Wiley, MIA chief executive, has told the transport and infrastructure committee all the signatories to the submission believe every motorist has a responsibility to contribute their fair share to our roading costs, with EVs being no exception.
“However, we also believe that every motorist has the right for their share or contribution to be fair,” she adds.
“We’re all concerned the rate of the road user charges being applied to EVs from the 1st of April is not fair or equitable.
“Linking the rate of the RUC to the current light vehicle diesel RUC rate will have the unintended consequence, we believe, that EVs will be contributing more to the national land transport fund than equivalent petrol cars.
“We believe this will create a further disincentive and significantly impact the demand and uptake for EVs.”
The select committee, which is chaired by NZ First MP Andy Foster, is currently considering submissions on the Road User Charges (Light Electric RUC Vehicles) Amendment Bill and is due to release a report with its recommendations by Thursday, March 14.
It heard from a number of submitters in person during a hearing on March 8.
Wiley, speaking on behalf of organisations “representing the motor industry and Kiwi motorists”, told the committee EVs are critical for New Zealand to hit climate targets, reduce health impacts from air pollution, and contribute to a growing economy.
“Our recommendation and urgent request to the select committee is to support RUC rates to be adjusted as a temporary and more equitable solution until such a time as the entire light vehicle fleet can move to a RUC or distance-based tax system.”
She added that industry believes achieving a universal system will take years and not months and there are concerns EV demand may slip in that time and leave consumers with less choice when it comes to low and zero-emissions models.
Wiley explained the suggested lower RUC figures were based on looking at all new petrol and hybrid vehicles sold in New Zealand over the past 24 months and calculating the weighted average fuel consumption, which was 7.8 litres per 100km.
At that rate, the equivalent in fuel excuse duty collected over 1,000km would be $60 and so the organisations recommend that should be the RUC setting for BEVs.
The suggested PHEV rate of $42 is 70 per cent of the total for fully electric vehicles, which follows the formula used by government in its proposed legislation.
‘Compounding’ issues hurt sales
MIA also delivered an individual submission to the select committee warning the introduction of RUC for light electric vehicles is likely to hurt sales of such models for the rest of the year.
Wiley told the hearing the new-vehicle industry is still reeling from the impact of the removal of the clean car discount at the end of December and the subsequent proposed levels for RUC had come as a shock.
“What we’re faced with now is compounding issues to demand and we’re very concerned about that,” she said.
“We have seen market reactions to that with people dropping prices by considerable amounts to dump stock and then we will lose those models from this market.
“The feedback we hear from our membership is that it’s impossible right now to sell EVs and PHEVs … [and] they’re not expecting EV sales to pick up this year as a result of the compounding [factors].”
As a result, she explained distributors may cancel orders for low and zero-emissions vehicles, which runs counter to attempts to achieve lower emissions across the national fleet.
“We’re concerned not only by the low demand but the message it sends because the new vehicle industry places orders months in advance and they have to lock them in.
“They place orders for hundreds of EVs and they can’t turn those boats away and stop them; they’re coming and the knee-jerk reaction is don’t bring any more and bring ICE [vehicles instead],” she continued.
Wiley noted that meant the market may go back to having fewer model options and a lack of competition among EVs to help bring prices down, which will “lock in emissions of our fleet for longer”.
