The Government is signalling its intention to slash the price of imported electric and hybrid vehicles by up to $8000 in a bid to make greener cars cheaper for Kiwis.
But it is also planning to slap a new fee of up to $3000 on the import of vehicles with the highest greenhouse gas emissions.
The Government has today opened a six-week consultation period before it introduces new legislation in Parliament later this year.
The plan, according to Associate Transport Minister Julie Anne Genter, will get more Kiwis into cleaner vehicles by reducing some of the cost burden.
It would come into force in 2021.
"Most Kiwis want to buy a car that's good for the environment, but tell us the upfront cost and limited choice makes it a challenge," she said.
The Government is proposing discounts of up to $8000 for zero-emission new imported vehicles, such as electric vehicles (EVs).
That number would be $6800 for plug-in hybrid electric vehicle (PHEVs) and $4800 for hybrids.
The level of the discount depends on the total net emissions of the vehicle.
For example, a new Hyundai Ioniq – which has an approximate retail value of just under $60,000 – would cost $52,000 after the full $8000 discount.
A used Mazda Axela, which is one of New Zealand's most popular imported vehicles, would cost $7200 after an $800 discount.
But a new Land Rover Sports V8 would be slapped with a $3000 high-emissions fee.
A $22,000 Toyota Hiace would cost an extra $1400 after the fee was applied.
Genter said the policy would be cost neutral – meaning the money gained through the fees from higher emitting vehicles would offset the subsidies provided to the lower emission cars.
"This means people will still have choice, while contributing to the task of cleaning up the vehicles coming into New Zealand."
The policy would only apply to new and used cars being imported into New Zealand, not to vehicles already registered in New Zealand when on-sold.
Some 74 per cent of annual vehicles sales are of vehicles already registered and these would not be affected, Genter said.
According to data from NZ Transport, there are more than 3.2 million petrol cars on New Zealand's roads. That compares to almost 15,000 electric vehicles in New Zealand.
The Motor Industry Association's chief executive David Crawford said the Government's moves were sensible.
Although the industry doesn't agree with all of the Government's proposals, it was keen to ensure that it is successful in reducing CO2 emissions from the light vehicle fleet in New Zealand, Crawford said.
"Our view is that the best policies to achieve a reduction in emissions are those that influence purchasing decisions. Changes in models supplied to New Zealand will follow if the demand is altered."
Greenpeace has welcomed the Government's move as a "good first step", but thinks the fee on higher emitting vehicles should be much higher.
"It's disappointing to see the maximum fee for highly polluting vehicles capped at $3,000. Would this make someone buying a more than $100,000 gas guzzler reconsider?" said Greenpeace Energy Campaigner Amanda Larsson.
"In France, for example, the top penalty is more than three times greater than what the New Zealand Government is proposing."
The Government is also looking to introduce new clean car standards, which would require vehicle importers to reduce the average emissions by meeting an annual emission target.
Emissions targets would be phased in gradually.
Genter said the economic evaluation shows the benefits of the clean car standard outweigh the costs by a factor of 3 to 1.
"The majority of the economic benefits are to motorists who will save $6800 per vehicle and $3.4 billion collectively over the lifetime of the vehicles affected."
She said the policy is forecast to reduce emissions by 5.1 million tonnes.
"These policies are about making cleaner vehicles a realistic option for more New Zealand households and businesses."
The consultation period will run from today through to August 20. Genter said a bill making these policies law will go before the House between September and November.
The move comes after the draft Independent Climate Change Committee's (ICCC) report into how New Zealand can reach the 100 per cent renewable target, obtained by the Herald, revealed the committee recommended the Government prioritises getting more electric vehicles on the road over reaching 100 per cent renewable energy by 2035.