The Government is providing $52.7 million in interest-free loans to ChargeNet and Meridian Energy for 2574 new EV chargers. But a lobby group says that's well short of what's needed and what other countries are doing.
By Keiller MacDuff of RNZ
The Government is providing interest-free loans of $52.7 million to two companies to boost the number of electric vehicle public chargers around the country.
The zero-interest loans will go to ChargeNet (majority-owned by Genesis Energy) and Meridian Energy. The two companies are investing $60m in capital for 2574 new charge points, 1374 DC fast chargers and 1200 AC chargers.
The move will more than double the country’s chargers, to about 4550.
New Zealand has about 1800 public charge points currently, among the lowest charger-to-electric vehicle ratios in the OECD.
In 2023, the National Party promised 10,000 electric vehicle chargers by 2030 if elected.
Transport Minister Chris Bishop said the loans kept the taxpayer’s contribution to a minimum.
“In this case, the average loan per charge point is $20,000, but once repayments are factored in, the net cost to the Crown is around $10,000 per charger, roughly a quarter of what a direct grant would cost.
Bishop said it was a chicken-and-egg situation, with some electric vehicle (EV) charger providers reluctant to roll out chargers until there were more EVs on the road, but concerns about the driving range of EVs and a lack of public chargers was one of the main perceived disadvantages of EVs for potential buyers.
“Many New Zealanders have thought about getting an EV, even before the fuel challenges we’re currently facing. But research shows that the lack of public chargers is holding many back from making the switch to an EV,” Bishop said.
“The private sector is reluctant to invest in charging infrastructure until there’s sufficient demand, but demand won’t grow until the lack of public chargers stops putting buyers off. Just as the previous National-led Government did with the ultrafast-broadband network rollout, we’re taking action to break that deadlock.”
He said the below-market interest rate loans were preferable to grants.
“It’s a more commercial model, a more sophisticated model, bringing forward that private sector investment.”
Some requirements were placed on the loans, such as requiring an urban-rural split, but exactly where they went was a commercial decision for the companies, Bishop said.
“About half the new chargers will be spread across Auckland, Hamilton, Tauranga, the Wellington region, Christchurch and Dunedin, with the other half throughout the regions, so drivers outside the main centres will benefit too,” he said.
“We’re also changing our planning rules to make the installation of public EV chargers a permitted activity under the RMA [Resource Management Act], meaning, in most cases, no consent is required – another factor that will help to speed up delivery.”
Work on the grants had been underway for some time, but that the timing was “fortuitous” given the increased interest in electric vehicles after surging fuel costs caused by the conflict in the Middle East, he said.
“People look at a petrol price of three bucks, three bucks twenty, and potentially going higher, and they say, jeepers creepers, now’s the time to go electric because the running costs are just so much lower,” Bishop said.
The 10,000 chargers by 2030 target was ambitious, he said. It was on its way to meeting it, but would require additional Crown investment, which would be considered as part of the Budget process.
EV lobby group Drive Electric chair Kirsten Corston welcomed the news, but said much more needed to be done.
She said the Government had promised more than $200m to go towards fast chargers several years ago, and this project only accounted for $52m.
“We’re interested to see what the other commitments are going to be,” Corston said.
It seemed very unlikely the Government would achieve its target of 10,000 chargers before 2030, she said.
New Zealand was falling behind other countries in EV uptake after a sharp decline in purchases following the Government’s cancellation of the clean car subsidy.
EVs accounted for around 27% of new vehicle sales in 2023, or at least one in four cars sold. Only one in nine cars sold are electric now.
“And you look at Australia, one in five cars sold are electric. In China, one in two cars sold are electric. The global average is one in four cars sold are electric,” Corston said.
There had been a three-fold increase of inquiries into second-hand and new EVs in recent weeks, she said.
“The challenge for us, though, is we’ve got a country that is still very dependent on importing fossil fuels and we’ve got a Government that, whilst this is fantastic to see, this investment into charging infrastructure, we also need investment into electric vehicles to drive uptake.”
Colston said reducing road user charges – which are the same for electric vehicles as for diesel vehicles – would be one way to do that.
Other levers included a Fringe Benefit Tax for light vehicles such as Australia has, or accelerated depreciation for commercial and heavy vehicles.
Drive EV wanted to see investment in making EVs more accessible to more people, Corston said.
“At the moment, when the average purchase of a car for a Kiwi is around $7000, yes, they can go and access a Nissan Leaf for $5000-$10,000. But if they’ve got four kids and they need a 200-kilometre range to get around town for the day, that’s not going to meet their needs.
“So we have to create that second-, third-, fourth-hand market for Kiwis to bring that price down – that’s a really critical piece to make EVs available for everyone in our community.”
Getting more people into electric vehicles promised a huge financial opportunity for New Zealanders, Colston said.
“The average household spends $3000 to $4000 a year paying for their petrol or diesel, and if they could electrify, it would be around $1000 a year.”