Jacinda Ardern on carve-out for farmers in EV rebate scheme: 'Strong consideration' but rejected

Climate Change Minister James Shaw and Transport Minister Michael Wood reveal details of a rebate scheme for buyers of new and used electric and hybrid vehicles. Video / Dean Purcell

Prime Minister Jacinda Ardern says the Government considered exemptions for farmers and tradies for its feebate scheme - but ultimately decided against them because they would be "hard to operationalise".

The scheme, announced on Monday, is designed to increase the number of electric and plug-in hybrid vehicles in the country, and aims to reduce greenhouse gas emissions in line with advice from the Climate Change Commission.

Under the scheme drivers who buy new cars from July 1 will be able to get taxpayer-funded rebates of almost $8700 for a new electric or plug-in hybrid car, and about $3500 for used cars.

These would be funded by fees based on emissions levels applied to new petrol cars up to $5875, and up to $2875 for imported used cars.

The fees will be applied from January next year and could add almost $3000 to the cost of the top two imports – the Ford Ranger and the Toyota Hilux.

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Farmers and tradespeople have questioned whether there will be electric or hybrid alternatives for utility vehicles, and Federated Farmers has asked for an exemption for farmers.

Speaking to media while at Fieldays today, Ardern said a "carve-out" for farmers and tradespeople was considered.

Prime Minister Jacinda Ardern is standing by the feebate scheme, saying not all utility vehicles are bought by tradespeople and farmers. Photo / Mark Mitchell

"We gave them really strong consideration, and were very genuine in there because we recognise that there wasn't an alternative in the market right now.

"We recognised that there is a lag in the technology right now, but after discussing it, debating it, working it through, it was going to be very difficult to operationalise."

The scheme has also reignited debate about whether SUVs and utes were work vehicles or fashion choices for city dwellers, which Ardern alluded to, saying many users of those vehicles were not tradespeople or farmers.

She hoped EV or hybrid utility vehicles would be available within two years.

"The timeframes we're hoping will be relatively short. We've got from about today around a 12- to 24-month period before manufacturers are indicating that we're likely to see hybrids or EVs in the market.

"In the meantime, none of this applies to existing vehicles in country, those in the second-hand market, those already here. It's only for new, and new imports.

"So there are options to avoid the fees regime."

Toyota New Zealand has questioned whether EV utes could come to market within the next two years, while the Motor Industry Association has said hybrid utes might become more widely available by 2025.

Ardern stood by her timeline.

"There are alternate manufacturers, of course, that they wouldn't choose to name who are looking at electric options within the next 12- to 24-month period.

"My point was that there are alternatives that will not attract fees that are being promoted as in the pipeline by manufacturers."