Whanganui car dealers disappointed by changes to Government’s Clean Car Discount

Ignition Motor Group expects to be in the same boat as other Whanganui car dealers when the changes to the Clean Car Discount come into effect. Photo / Bevan Conley

Whanganui car dealers are disappointed in the changes to the Government’s Clean Car Discount scheme, believing it will make a tough market even tougher.

They also say they would have preferred the Government to let them know about the changes before announcing them last week, to allow the industry time to prepare.

The scheme was introduced in 2021, putting a fee on purchasers of high-emission vehicles like utes to give a price rebate to those buying low-emission vehicles, hybrids and electric vehicles (EVs).

Transport Minister Michael Wood said the scheme led to a level of EV uptake not expected until 2027, with 20 per cent of all new cars bought in Aotearoa in 2022 being electric.

Changes to the scheme will be introduced on July 1 after it was found to be unsustainable, with the number of rebates taken not being paid for by the fees.

Under the new criteria, the maximum rebates have been lowered as have the emissions caps for vehicles eligible for rebates and fees, while the cost of fees has been increased.

David Jones Motors principal dealer Gareth Jones said he was disappointed by the changes as they would make an already challenging market even more difficult.

“We’ve got vehicles arriving which customers have bought which were getting a $5750 rebate [but] are now going to get a $4000 rebate instead,” he said.

Under the changes, the rebates on EVs will be lowered from $8625 to $7015.

The emissions cap for non-EVs to be eligible for a rebate has been lowered from 146 grams of CO2 per kilometre (CO2/km) to 100g of CO2/km, with the maximum rebate of a non-EV being $4025.

This change, Jones said, would affect some of the company’s highest sellers like the Suzuki Swift, which had an increase in sales after the current scheme resulted in a drop in sales for utes.

Under the current scheme, a base model Swift can receive a rebate of up to $2590, while the more expensive hybrid model receives a $3160 rebate.

Gareth Jones, dealer principal of David Jones Motors. Photo / Bevan Conley

However, with the new emissions cap, neither Swift will receive any rebate -so Jones expected people to order those cars now while they were still eligible.

“For the next two months, I expect most of our brands, but especially Suzuki, to be doing very well.”

He expected the rebate increase for imported EVs to cause a slight growth in interest but many people were still priced out of the EV market.

“A lot of people, with the cost of living, can’t stretch out to get a fully electric car at the moment anyway and the vehicles which are probably more affordable for them, around the $20,000 mark, the range is impractical for them,” he said.

Ignition Motor Group sales manager Thor Bjornsson said he was disappointed by the change, particularly how it was announced with no warning to the industry.

“We didn’t even know it was happening, they made the announcement and then Kia sent out an email saying it was all on the news,” Bjornsson said.

A warning from the Government weeks or months in advance would have been helpful because people had had cars on order for months and now had to be told the rebate they were expecting would not be available or they would have to pay a fee, Bjornsson said.

Ignition Motor Group sales manager Thor Bjornsson. Photo / Bevan Conley

The original scheme did not affect Ignition’s sales much as other dealers, he said, as the dealership did not rely heavily on the sales of trade vehicles like utes.

Instead, they mostly sold smaller SUVs which were previously neutral in the scheme but would now likely have a fee attached.

As well as the emissions cap for a rebate being lowered, the threshold making cars eligible for a fee has been lowered from 192g of CO2/km to 150g.

“The majority of our cars were either neutral or you got a rebate on them when we sold them; now it’s shifting to neutral or you get a fee - we’re more in the same boat as everyone else now,” Bjornsson said.

Five or seven-seat SUVs sold by Ignition under the current scheme would have buyers pay nothing or a $1000 fee but, with the new thresholds, buyers would pay $3000 or $4000.

The rebate reductions for hybrids and EVs were likely to affect sales of those vehicles.

“Cars that previously got $3000 or $4000 in rebates now get nothing,” Bjornsson said.

“The electric customers, those who are buying fully electric cars, they used to get $8600 - now they’re getting $6000.”

As a result, the changes meant Ignition was likely to be negatively affected overall, he said.