Rental fears over feebates

The Rental Vehicle Association of New Zealand (RVA) is concerned about the impact of changes to the clean car discount, which are set to take effect on July 1.

Its chief executive officer, Ben McFadgen, says while the revamped scheme is intended to promote the use of newer, low-emitting vehicles, it may have the opposite effect of increasing the average age of the national fleet of about 3.6 million vehicles.

“Many New Zealanders who have placed an order for a new vehicle and are awaiting delivery could now be financially disadvantaged, and order cancellations will likely follow,” adds McFadgen, pictured.

“Used-vehicle prices will increase and the fleet will get older, compromising the country’s opportunity to drive newer, low-emitting vehicles that offer savings on fuel costs for everyday New Zealanders. 

“The rental industry also places orders for significant volumes of new vehicles each year, most of which are scheduled for delivery in the last six months of the calendar year. 

“These are now subject to unforeseen price increases to the tune of many thousands of dollars per vehicle. There has been no consultation with our industry, or tangible evidence presented about the benefits associated with these imposed changes.” 

According to the RVA, cutting the age of the fleet is one of the most effective ways to decrease emissions. 

The organisation suggests that a focus on reducing its average age from 15 to eight years using petrol, diesel and hybrid vehicles could almost halve emissions. This outcome could be further enhanced by supplementing it with battery electric vehicles (BEVs) and plug-in hybrids.

McFadgen says fully decarbonising New Zealand’s light fleet according to the government’s current timeline is beyond the country’s current ability to deliver.

“We need to buy some time. Right now, we believe this scheme change will result in poor outcomes for Kiwis when things are tough enough.”

He adds that’s especially the case given current challenges in the country around infrastructure development, rapid technological development, resourcing and the continuity of international supply chains. 

Instead, the RVA is calling for stronger collaboration between the government and automotive industry, including experienced fleet managers, to review all options to cut emissions and improve the fleet’s safety. 

It believes that a high level of collaboration – and a focus on reducing vehicle age with cars with internal combustion engines, hybrids and BEVs – will result in a substantial improvement in light fleet and a large reduction in its emissions profile “for a fraction of the cost of full decarbonisation”. 

The RVA is now urging the government to reconsider the changes to the clean car discount, and work collaboratively to achieve meaningful reductions in emissions while also supporting the economy, business and everyday New Zealanders.