The chief executive of Z Energy says new proposals to encourage uptake of electric vehicles is not a ''Kodak moment'' but says the impact of the policy will be felt gradually.

Mike Bennetts says from its formation the company had pushed for reduced reliance on fossil fuels but this would contribute towards the challenge to its core business.

''This isn't going to kill our core business overnight. This is not a Kodak moment for us - it's part of an overall decline in our core products.''

Given the proportion of EVs in the vehicle fleet was just over 1 per cent, Z had plenty of time to adapt, he said.

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The company, whose profits have been hit by strong competition and high fuel prices, could offer some recharging services, more fleet management services and its convenience stores still made up to a third of profits at Z, the country's biggest fuel retailer.

Bennetts said debate over tax for EVs still needed to be had.

His company had calculated that given projected rates of uptake over the next five to 10 years the amount of petrol sold could drop by 100 million litres a year.

This would hit the government tax take by up to $100m a year and it would look to recoup that from elsewhere - most likely a road user charge for EV owners.

''New Zealanders in general don't like paying more taxes than they need to - most of us can tolerate tax if they feel its evenly administered. Already they have to pay a fee to buy a petrol car and having to cross subsidise someone who has got a rebate for a non-fuel car,'' said Bennetts.

To encourage greener transport, the Government has proposed slashing the price of imported electric and hybrid vehicles by up to $8000 while imposing a new fee of up to $3000 on the import of vehicles with the highest greenhouse gas emissions.

Forsyth Barr senior analyst Andrew Harvey-Green said the likely changes to road user charges in which EVs are captured could slow their uptake.

And given the small proportion of EVs in the fleet the impact on Z was small at present and would grow very gradually the negative impact on Z would be marginal.

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He said power generators would also only benefit marginally from the move.

Mercury Energy chief executive Fraser Whineray said the country was ready for the introduction of more electric vehicles.

Although there would be some electricity distribution pinch points there were enough power projects for an entire fleet of cars and half the trucks on New Zealand roads.

Whineray, whose firm stands to be a big winner of the shift to EVs at a time when electricity demand for other uses is growing only slowly, said the proposal was an important milestone for switching to cleaner and more efficient transport.

Although a small proportion of the car fleet, the rate of growth is increasing rapidly and larger vehicles, including trucks were being converted to run on electricity.

''This is another step down this path with this government and will help the purchasing decision away from what New Zealand has a tendency to do — go for something cheap at the start but you end up paying for it in the long run far more,'' he said.

There could be constraints for distributing electricity if there was a very rapid uptake of EVs but Whineray said vehicle owners would charge them up overnight when there was less pressure on transmission and when prices were low.

Last night about 3000MW of capacity was used and that more than doubled for this morning's peak.

Mercury Energy chief executive Fraser Whineray in Mercury's electric-converted 1957 Ford Fairlane. Photo / Supplied
Mercury Energy chief executive Fraser Whineray in Mercury's electric-converted 1957 Ford Fairlane. Photo / Supplied

The country's 230-volt electricity system means every home could easily charge an EV from existing outlets and a Ministry for the Environment study last year found that more than 85 per cent of homes have off-street parking, allowing for simple home charging.

Whineray said with New Zealand generating more than 80 per cent of electrify from renewable sources it was logical to take advantage of that.

''It's another step on what will be a long journey but it's one that New Zealand will be in the box seat for with its renewable electricity system.''

On average households could have their total spend on energy if they opted for electric rather than petrol power. He didn't think a strong EV uptake would push up power prices much.

The country uses about 40,000 Gigagwatt hours of electricity per year and if every car was an EV another 7000Gwh would be needed. At present another 10,000 Gwh of renewable power had been consented, Whineray said.

Most of the new generating capacity is at the same levels or a ''pinch higher'' than what the country has today.

Asked if it was natural for a power company boss to welcome the prospect of selling more electricity Whineray said: ''If those customers want to buy their transport at 30c a litre rather than $2 a litre doesn't it mean that we're all winning.'

New Zealand's largest electricity distributor, Vector, has welcomed the Government's proposal too.

Vector has previously highlighted the crucial role electricity distribution businesses will play in enabling EV uptake.

Its chief networks officer Andre Botha said some fast EV chargers installed in residential homes can add the equivalent of seven houses to the electricity grid by feeding back into it and into homes.

''We have known for some time that surging EV uptake will put unprecedented pressure on the country's electricity networks - particularly if people arrive home at the end of a typical work day and start charging their cars at the same time,'' he said.

Petrol company Z has also welcomed the Government moves.

Mercury says New Zealand needs to take advantage of its renewable energy. Photo / Supplied
Mercury says New Zealand needs to take advantage of its renewable energy. Photo / Supplied

The transport sector is responsible for a significant amount of New Zealand's total greenhouse gas emissions each year, said chief executive Mike Bennetts.

Z is already taking steps within its own business to address this directly, including building New Zealand's first commercial-scale manufacturing biodiesel plant and its partnership with Wellington-based ''climate positive'' car-sharing company Mevo.

"Climate change is complex, and we need a range of solutions to address it. We believe that devoting more resources to diverse low-emissions innovation and technology – including biofuels - will be an important way of assisting programmes like the Clean Car Standard succeed. We look forward to continuing collaboration on this", Bennetts said.

The Ministry for the Environment study found that the transport sector accounts for about 18.5 per cent of New Zealand's gross emissions. Projections indicate that by 2020, transport emissions will be 58 per cent above 1990 levels, a much higher increase than in any other sector.

Almost 90 per cent of New Zealand's transport emissions are caused by road transport, with cars and vans accounting for the majority.