The Government will be rushing through urgent changes to the Clean Car Standard in response to concerns vehicle prices could increase by thousands if action isn’t taken.
Transport Minister Chris Bishop today announced the Government will slash the charges importers face for new and used vehicles in the hope it prevents the estimated $264 million in net charges being passed on to consumers.
While Bishop maintains the changes will have a negligible impact on emission levels, Labour and the Greens have accused the Government of collapsing the electric vehicle market and putting more polluting cars on the road.
The Clean Vehicle Standard, also known as the Clean Car Standard, was introduced in 2023 and imposes annual CO₂ targets for vehicle importers, who must balance higher-emitting models with enough low-emission vehicles to meet their overall target.
Importers faced charges if they fell short but earned credits if they exceeded it.
The standard was introduced by the previous Labour Government before being amended by the current Government in 2024.
Bishop, speaking alongside Prime Minister Christopher Luxon, acknowledged the standard had lifted fuel efficiency but said there was a shortage of cleaner used vehicles and demand for electric vehicles had dropped.
“Most importers are now unable to meet the passenger-vehicle targets. In fact, right now, 86% of importers are facing a net charge rather than net savings from credits,” he said.
“The scheme is so out-of-whack with reality that even some hybrid vehicles will attract charges rather than credits.”
The proposed changes included cutting the top rate for new vehicles from $67.50 to $15 per gram of CO₂ and the top rate for used vehicles from $33.75 to $7.50 for 2026 and 2027.
The Government would also ensure any credits wouldn’t expire before December 2028. A review would also be launched with recommendations given to Cabinet by June 2026.
“In total, it is estimated that the changes will avoid $264m in net charges that could have been passed on to consumers through higher vehicle prices,” Bishop said.
“[Importers] have been really clear with us in Government that unless you act, the scheme will fall apart on the 1st of January 2026 to the extent that prices will rise almost certainly because of the aggressive nature of the targets that they are simply unable to meet.”
The changes would be introduced into law by the end of the week through amendments to the Land Transport Amendment Bill, which has just come back from select committee.
Bishop defended the Government’s 2024 changes, claiming they were made on the “best available information”.
“We are now acting in accordance with what we think the public deserve.”
Bishop said scrapping the standard hadn’t been ruled out but he noted all countries in the OECD apart from Russia had “some form of vehicle efficiency standard or clean vehicle standards”.
Shortly after the announcement, Act Party transport spokesman Cameron Luxton supported the move, while also calling for the law’s complete removal.
“It adds cost without benefit, it strips people of choice, it treats Kiwis as if Wellington knows better than they do,” he said.
“Cutting the charges is a good step, but Act will keep pushing for a full clean-out.”
Green Party transport spokeswoman Julie Anne Genter claimed the Government had caved to the motor industry in its changes.
“National promised to retain the Clean Car Standard, but their changes will render it utterly futile. Meanwhile, their promise to build 10,000 EV chargers by 2030 is far from fruition, with just 57 built this year. New Zealanders cannot take Christopher Luxon at his word.
“The Government’s scrapping of the Clean Car Discount and now their weakening of the [Clean Car] standard will only result in more polluting vehicles on our roads and higher fuel bills.”
The discount, distinct from the standard, offered rebates for people buying electric and hybrid vehicles through fees paid by those purchasing newly imported combustion engine vehicles. It was scrapped by the current Government soon after taking over from Labour.
Labour leader Chris Hipkins said today’s changes proved the Government was attempting to clean up a mess it created.
“It was ironic to see Chris Bishop and the Prime Minister complaining that there aren’t enough electric vehicles and hybrid vehicles on the used car market. That’s because they collapsed the importation of electric vehicles when they cancelled the clean car discount.”
Hipkins wouldn’t be drawn on what Labour would do with the standard and former discount, saying the party’s policy would be announced next year.
Adam Pearse is the Deputy Political Editor and part of the NZ Herald’s Press Gallery team based at Parliament in Wellington. He has worked for NZME since 2018, reporting for the Northern Advocate in Whangārei and the Herald in Auckland.