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The National Party is returning to its controversial proposal to allow electric cars in bus and high-occupancy lanes to quadruple the number on the roads.

If elected, it would also exempt electric cars (EVs) from fringe benefits tax and road user charges and make a third of the government's light vehicle's fleet electric in the hopes of driving the secondhand market.

National leader Judith Collins unveiled the policy with transport spokesman Chris Bishop and environment spokeswoman Erica Stanford, promising to have 80,000 EVs on the road by 2023.

Stanford said by encouraging businesses to buy electric - which account for 60 per cent of new car sales - it would have the knock-on effect of significantly bolstering the second-hand market where most Kiwis buy their vehicles.

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Kiwis would also be incentivised to buy electric cars for the perk of being able to use bus and high-occupancy lanes, she said.

National would bring in the rule immediately on State Highways and "work with councils" to encourage the scheme in cities.

For ease, National would introduce a new licence plate for electric and hybrid cars so they could easily be identified.

National has attempted this policy before.

In 2016, it passed legislation which set the framework for EVs to use bus lanes but left it up to local governments to adopt it.

But then-Transport Minister Simon Bridges ignored officials' advice to consult with councils because they would likely be uninterested in adopting the rule as it would slow down public transport.

Transport Ministry officials also warned bus lanes might not offer real-time savings to car drivers "given the stop-start nature of buses operating in them" but the perception of priority access could still be an incentive.

National Party leader Judith Collins has made transport policy an early focus. Photo / Warren Buckland
National Party leader Judith Collins has made transport policy an early focus. Photo / Warren Buckland

At the time, Auckland Transport voted against allowing EVs in bus lanes, in favour of supporting a trial of allowing them in T2 and T3 lanes. A spokesman said today its position hadn't changed.

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In 2018, a year-long trial by the New Zealand Transport Agency was dropped because it found EV owners cared more about environmental concerns, lower running costs and the perception of being an early adopter than driving in bus lanes.

Just over 80 per cent of owners said access to special vehicle onramps didn't factor into their decision to buy an EV - but many said expanding access to more onramps and lanes would make EVs more attractive.

Stanford said National was confident letting electric cars in bus lanes wouldn't slow down public transport networks because there were too few vehicles in New Zealand for it to be a problem.

Rapid transit networks, like Auckland's Northern Busway, would not be included in the scheme - though Wellington's Mt Victoria bus tunnel would be considered.

Stanford said if New Zealand did find itself with too many EVs in bus and high-occupancy lanes in the future, the policy would be reviewed. That would be a good thing, she said.

"Councils' positions have to change. In Auckland Council's own document, they've acknowledged they need 60 per cent of vehicles to be electric and they're not going to get there the way that we're going.

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"We've gone backwards in our electric vehicle uptake in the last three years because we don't have policies to incentivise people to buy them."

There are currently 22,000 EVs in New Zealand, which represents 0.6 per cent of the light passenger fleet.

National would also exempt EVs from fringe benefit tax (a sort of tax that can apply to benefits provided to employees other than their salary or wages, such as motor vehicles available for private use) until 2025, and extend road user charge exemptions until at least 2023.

The estimated cost is $93m over four years, including $55m in lower revenue from exempting EVs from fringe benefit tax, and $38m to electrify the government fleet.

Light EVs are currently exempt from road user charges until June 30 2021, with heavy EVs exempt until December 31 2025 - saving owners $600 a year on average.

"Our ambitious and comprehensive plan will encourage the purchase of EVs, create a thriving second-hand EV market, support sustainable transport infrastructure, and lower carbon emissions," said Collins, who revealed she was in the process of having an EV charger installed at home, and would soon buy.

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The "electric vehicles plan" aims to have a third of the government light vehicle fleet electric by 2023.

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Collins, who launched the policy at Takapuna electric vehicle dealer Auckland City Electric Vehicles, said monthly registrations of EVs reached about 500 vehicles a month under National, and hadn't grown in the past three years.

About a third of new EV purchases are for company fleets, and the fringe benefit tax exemption and ability to use bus and high occupancy lanes would incentivise companies to buy more electric vehicles, National said, and be appealing to people who have to frequently travel across the city.

The Labour-led Government received advice about exempting EVs from fringe benefit tax, but Treasury noted such an exemption wouldn't encourage EV purchases by individuals or companies that mainly buy vehicles for business use.

The Government was also set to introduce a "feebate" policy which would have subsidised the cost of cleaner vehicles by making polluting vehicles - like SUVs - cost more.

Green Party MP and Associate Transport Minister Julie Anne Genter launched a discussion document on the feebate scheme in July last year, but New Zealand First blocked it, despite the Greens having accepted that farm vehicles would be exempt from the fees if there was no reasonable electric alternative.

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National had labelled the policy a "car tax".

Greenpeace said National's policy was a step in the right direction "but really underwhelming in the context of the climate crisis".

Climate and energy campaigner Amanda Larsson said there needed to be a commitment to ban imports of new petrol and diesel vehicles by 2030 and more incentives for people to make their next car electric.

"Just as we saw with Labour's energy policy announcement yesterday, National are slowly tip-toeing forward when they should be taking the big, bold strides that we need to address the climate crisis."

Transport policy

National has already announced a significant transport package - in July Collins promised that, if elected, her government would fix Auckland's congestion crisis and transform infrastructure in the Upper North Island, by spending $31 billion over 10 years.

More than half of the $31b, some $17b, would be spent on projects in the upper North Island, including Auckland, Hamilton, Tauranga and Whangārei.

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Major transport projects already promised by National include:

• A four-lane expressway from Whangārei to Tauranga (including tunnels under the Brynderwyn and Kaimai mountain ranges) to be completed in 2040.

• An additional Auckland Harbour crossing in the form of a tunnel for road, rail and public transport (work to be started in 2028).

• A bus rapid transit from Onehunga to Auckland's CBD.

• A rail link loop connecting Auckland Airport to Puhinui and Onehunga.

• Upgrading Auckland's ferry services.

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• Building the Northwest Rapid Transit Bus Corridor.

In the Wellington region, the transport package includes fast-tracking a second Mt Victoria Tunnel and building a second Terrace Tunnel, and a new highway linking Seaview to State Highway 1 and rapid buses or trackless trains to the airport.

The money to pay for the $31b worth of projects will come from more borrowing, future budgets and the Covid-19 recovery fund, National says.

A National government would allow the NZ Transport Agency to borrow more money than it currently does.