EV sales stalled badly, again, in February

Consumers have suffered twin electric shocks with the end of the Clean Car Discount and the introduction of Road User Charges.

Registrations of light electric vehicles plunged in January and were again slow in February - the second month of sales with the clean car discount gone, and road user charges for EVs confirmed from April 1. Fewer than 400 EVs were sold, compared to close to 4347 in December, when fully electric vehicles accounted for 1 in 5 passenger car sales.

The total market, including petrol and diesel vehicles, was also weak. Motor Industry Association chief executive Aimee Wiley said that registrations in February slumped to 9663 on the back of weak demand for light passenger vehicles - which at 5951 was the lowest February result in 11 years.

Kirsten Corson, founder of carshare firm Zilch and now chairwoman of EV-promoting non-profit Drive Electric, told the Herald a lull was always expected, given the 53 per cent jump in EV sales in December as buyers raced to beat the end of the rebate.

But she said based on her group’s conversation with dealers, March would be slow, too.

After elimination of the clean car discount carrot on December 31, a stick is about to hit.

EV owners will lose their exemption from Road User Chargers from April 1, $76 per 1000km from April 1, plus $12.44 to $13.71 in admin fees for every pre-paid block of mileage, with plug-in hybrid (Phev) owners paying $53 per 1000km.

“EVs are still cheaper on a total cost of ownership model, but the current structure with RUCs - with EVs paying more than petrol - will definitely deter consumers and businesses from going electric,” Corson said.

EECA’s rule of thumb is that it costs the equivalent of 40c a litre petrol to charge an EV at home. RUCs will now be added to the equation.

The Automobile Association (AA) says the average Kiwi driver clocks up 12,000km a year, meaning $912 a year in road user charges for the average EV owner.

EV advocates have complained a fuel-efficient petrol car pays about $511 in petrol tax for the same distance.

Corson said the Government could reanimate EV sales by addressing this disparity.

Her group would also like to see rebates or another mechanism used to encourage owners of light commercial vehicles to go electric.

Many vans used in business clock up around 40,000km a year, Corson said, but the segment had gone under the radar with incentive schemes so far. Heavy vehicle owners should be incentivised to go electric, too. In February, only 38 heavy EVs were sold amid total heavy commercial vehicle sales of 660.

On the back of the clean car discount (CCD) of up to $8625, the number of new EVs on New Zealand’s roads jumped from 27,499 at the end of 2022 to 73,067 at the end of 2023.

December last year was the peak of the CCD frenzy, with 4347 EVs registered.

In January, that fell to 448. In February, 363 new vehicles were registered.

Only 164 new plug-in hybrids were registered in February, from 202 in January and 987 in December.

Tesla Model Y (145 registrations) topped the subdued February EV chart, followed by the BYD Atto 3 (25), the Ford Mustang Mach-E (20), Kia EV6 (17) and the Audi E-TRON GT (14).

In plug-in hybrids, the Mitsubishi Outlander (42) lead the pack, followed by the Mitsubishi Eclipse Cross (22), Mini Countryman (16), Porsche Cayenne (12) and Land Rover Defender (8).

In “mild” or non-plug-in hybrids (which escape RUCs) the top five was an all-Toyota lineup consisting of the RAV4 (444), Highlander (154), Corolla Cross (131), Corolla (94) and Yaris Cross (83).

Despite the elimination of the “ute tax”, light commercial vehicles were also slow. At 3052 registrations they were 13.8 per cent higher than the cyclone-hit February 2023 but 18.4 per cent down on the same month in 2022.

The top sellers were the Ford Ranger (956), Toyota Hilux (692) and Mitsubishi Triton (437).

New incentive on the way

Earlier, Transport Minister Simeon Brown said the RUC exemption was always set to expire once EVs formed 2 per cent of NZ’s fleet (NZTA stats put EV uptake at 1.7 per cent, or 2.4 per cent if you include plug-in hybrids).

Transport Minister Simeon Brown (right) favours ultimately expanding RUCs to all vehicles.

The previous Government had pencilled in the April 1 transition date, which was then confirmed by Brown.

The Government planned to subsidise 10,000 public chargers by 2030 as a new mechanism to encourage electric vehicle uptake. Details of the scheme are pending.

And although the clean car discount was wiped for consumers, the previous Government’s Clean Car Standard had been maintained.

The CCD sees importers incur charges on higher-emission vehicles, but these can be offset with credits for importing lower-emission vehicles, too.

Brown favours ultimately expanding RUCs to all vehicles as the Crown seeks to maintain road maintenance funding - about half of which is currently generated from fuel tax - as NZ’s fleet electrifies. By the end of the decade, all vehicles will pay road user charges according to their weight, rather than fuel tax.

The ABCs of RUCs

• Road User Charges are pre-purchased in blocks of 1000km online or from the likes of VTNZ or AA.
• Pure EVs will pay $76 per 1000km, plug-in hybrids $53 per 1000km.
• There will be an admin fee of $12.44 or $13.71 each time you pre-pay for a block of mileage online or over-the-counter.
• Those same rates apply to all EVs weighing less than 3500kg (heavier electric vehicles won’t be hit by RUCs until December 31, 2025).
• Hybrids that don’t require a charge at the wall, like the Toyota Prius, are exempt. E-scooters, e-bikes and electric mopeds and motorbikes are also exempt.
• An odometer reading must be given the first time you buy a block of RUCs.
• An odometer reading is then taken each time your car gets a warrant of fitness. If the odometer exceeds the RUCs purchased by the vehicle’s owner, they will be invoiced for any difference.
• There will be a two-month grace period as the new system is phased in.
• You can be fined up to $15,000 for providing false RUC records.
• Late payment can incur a 10 per cent penalty on the amount owed.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.