Tesla v Nissan in Parliamentary ute tax brawl

The world's most valuable carmaker, Tesla has argued the Government should ratchet up fines on dirty cars from legacy automakers, arguing the old-guard of carmakers is bluffing about concerns new rules could run some companies out of business.

Tesla argued that if older, established car companies weren't able to supply new, clean vehicles, it - and other carmakers - would step in to fill the gap.

Carmakers old and new have been to war in Parliament's transport select committee over new clean car rules: the clean car discount, which gives a discount on cleaner vehicles paid for by levying a charge on dirty ones; and the clean car standard, which encourages importers to bring clean cars into the country by forcing them to balance out imports of polluting vehicles by also importing clean ones.

Automakers that failed to balance the importing of "clean" and "dirty" vehicles, would have to pay penalties.

The clean car standard is the most controversial of the two policies, as large legacy automakers like Nissan have warned the emissions targets embedded in the plan were overly ambitious and out of step with the rest of the world.

Nissan said that "technology developed in new vehicles is designed to meet overseas standards," and not for New Zealand specifically, this meant New Zealand-specific emissions standards had to be compatible with the rest of the world.

Nissan requested that the Committee's report back to Parliament "acknowledge that since most new vehicles entering New Zealand are made for the Australian market it hampers our ability to aggressively reduce CO2 emissions, at least in the short to medium term".

"To reach the targets in the Bill in 2027, at least 50 per cent of new vehicles would need to be zero emissions. While we wish we could get that many by then, it is not possible," Nissan said.

Nissan said New Zealand could not "leapfrog" European emissions development - as Europe would be the market leader in reducing emissions. Instead, the company said it would be more plausible for New Zealand automakers to follow European standards by about two years

It said it was investing overseas in plants to manufacture batteries for electric vehicles, but there would still not be supply to meet the massive demand for EVs

In his oral submission, managing director Ben Hamilton told the committee the targets in the legislation were "unachievable".

"They [the targets] represent a much stronger and steeper rate of CO2 reduction than any faced or even achieved by any other major market and yet we are fundamentally reliant on these other markets around the world to produce vehicles for New Zealand," Hamilton said.

He said Nissan was hampered by global demand for EVs, which it was trying to fulfill, and global supply chain issues.

Hamilton said the rules "rely on New Zealand being able to source a huge amount of battery electric vehicles within a very short time frame - this is simply not going to be possible".

"Globally battery electric vehicles are in high demand today - and demand significantly outstrips supply, predominantly due to the lack of raw material".

He said that since the Government launched its clean car discount, which subsidises EVs, Nissan had struggled to supply New Zealand with supply to meet surging demand.

Minister of Transport Michael Wood said automakers are doing well to meet the proposed target. Photo / Mark Mitchell

"Since the launch of the clean car discount in July, we've been able to supply only 45 battery electric Leaf units to customers across a four month period to date - this is versus an order bank and demand well in excess of this number," Hamilton said.

He said the outlook for being able to meet that level of demand in future was "poor".

But Tesla was not so pessimistic, and argued in a written submission that the poor supply of EVS from legacy automakers was due to decisions those companies had made to neglect the EV market.

"Legacy automakers will tell this committee that they cannot supply adequate numbers of lower emissions vehicles to meet the Clean Vehicle Standard.

"This may be true but, in saying so, they are simply stating that they have chosen to not to invest in low emissions vehicles and they now want to hold back New Zealand's transition to sustainable transport as a result," Tesla said.

Tesla argued that the emissions reductions targets were achievable, and said attempts to water them down were down to legacy automakers protecting investment in fossil fuel vehicles.

"Legacy automakers - who have billions of capital locked into producing internal-combustion engine vehicles, which makes for a powerful financial disincentive to transition to EVs - have told governments all over the world that they won't be able to meet emissions reduction targets," Tesla said.

Transport Minister Michael Wood said there was already evidence the proposed 2025 target could be achieved.

"What's encouraging is at a national level, new vehicle importers basically reached the 2023 target for the Clean Car Import Standard in September, which is close to half of the progress needed to reach the 2025 target," Wood said.

This is despite the global supply chain issues, impacts of Covid restrictions and the Clean Car Discount only being available for a few months. The reality is Japan reached our 2025 target seven years ago, so there should be a pipeline of cleaner cars to draw on," he said.

The treatment of utes under the legislation has been a political flash point, given many utes will be slapped with large fees.

Nissan said that there is unlikely to be low emissions innovation in utes, because they are not a popular car overseas.

"While passenger and SUV vehicles are worldwide vehicle types, utes are not," Nissan said.

"Consequently, utes are last in line for emission reduction technologies while manufacturers concentrate on making low emission passenger, SUV and van vehicle types which are sold into worldwide markets," Nissan said.