‘Immediate relief for dealers’
The Motor Trade Association (MTA) says changes to the clean car standard (CCS) will provide relief to some of its members but warns the automotive industry shouldn’t be used as a “political football”.
Its comments come after the government passed legislation on November 20 to amend the CCS, including slashing charges by nearly 80 per cent for new and used imports for 2026 and 2027.
Other changes include ensuring no carbon dioxide (CO2) credits expire before December 31, 2028, and conducting a full review of the scheme in the first half of next year.
Lee Marshall, the MTA’s chief executive, says reducing the penalty fees for two years is one of the most significant shifts in vehicle emissions policy since the scheme was introduced.
“This change comes at a time when cost-of-living pressures are front of mind for many Kiwis and the economic slowdown is reflected in sluggish, if improving, vehicle sales,” he adds.
“With the consumer-oriented clean car discount now well behind us, the CCS remains one of the few levers the government has to influence supply and demand of new and used vehicles, whether electric or not.
“While this move will provide immediate relief for dealers and consumers, it raises important questions about the long-term direction of emissions policy – crucial for business continuity and planning.
“While we supported the need for revised targets, we also acknowledge members’ concerns about potential policy whiplash in coming years, given the political cycle.”
Marshall, pictured, says the CCS was designed to incentivise importers to supply low or zero-emissions vehicles by encouraging them to offset the penalties incurred by higher-emission imports with credits earned from supplying cleaner models.
He explains while a change was necessary, the danger in moving to such extremities is there may be an “equally radical swing back in the future, given the lack of a bipartisan approach to the issue”.
“By dramatically reducing charges, the government has all but removed the financial signal that underpins this system, at least for the next two years. For all intents and purposes, the scheme is now neutralised.”
“The automotive industry shouldn’t be a political football. Businesses need consistency to plan around – in particular, manufacturing allocations and product mixes are sometimes locked in years in advance,” he continues.
“Whatever the system, businesses adjust and plan around it – sometimes strategically sacrificing the performance of today for a smoother or more profitable tomorrow. Efforts that were now futile in retrospect, and that erodes confidence in the stability required for investment.”
The MTA notes it had consistently called for a reset of the CCS before the government announced the latest amendments on November 17.
Marshall describes the scale of penalties looming from January 1, 2026, as reflective of an aspirational view of improvements in vehicle technology and pricing that haven’t materialised.
The MTA also believes smaller hybrid vehicles should not attract penalties as they are a “crucial and cost-effective step” in reducing the carbon footprint of the national fleet.
“Discouraging their uptake would negatively impact fleet renewal – an important consideration given New Zealand has one of the oldest vehicle fleets in the OECD,” adds Marshall.
“Policy should make it easier, not harder, to buy newer vehicles that come inherent with improvements in safety and efficiency.”
As for next year’s review of the CCS, with recommendations due to go to cabinet by June 2026, Marshall says this provides industry with another opportunity – following the recent select committee process – to help shape the future of emissions policy.
“For some, these changes may feel like the government has gone too far. Others will rejoice. We acknowledge both perspectives and strongly encourage members and stakeholders to engage in the review process and make their views heard.”
