Electric Car incentives

Simon Bridges announced:

Minister Simon Bridges today announced an ambitious and wide ranging package of measures to increase the uptake of electric vehicles in New Zealand.

“It’s clear that electric vehicles are the future. A move from petrol and diesel to low emission is a natural evolution, and it is our aim to encourage that switch sooner, rather than later,” Mr Bridges says.

“The benefits of increasing uptake of electric vehicles are far-reaching. They’re cheaper to run than petrol or diesel vehicles, they’re powered by our abundant renewable electricity supply, and they’ll reduce the amount of emissions that come from the country’s vehicle fleet.”

I think are part of the future. The speed of change though is something that will be predominantly decided by price and technology. Paying huge subsidies to purchase electric cars is very wasteful spending (which the Greens advocate).  So long as we have an ETS which imposes a price on CO2 emissions, then you don’t need Government subsidies.

On the specific measures:

  • Extending the Road User Charges exemption on light electric vehicles until they make up two percent of the light vehicle fleet
  • A new Road User Charges exemption for heavy electric vehicles until they make up two percent of the heavy vehicle fleet

I’m okay with these as they are temporary (and minor). I’m pleased they’ll stop once there are a significant number of electric vehicles.

  • Allowing electric vehicles in bus lanes and high-occupancy vehicle lanes on the State Highway network and local roads

Quite a smart way to give people an incentive to go electric as it doesn’t cost taxpayers or ratepayers anything.  Might lead to some though!

On average, charging an electric vehicle at home is equivalent to buying petrol at 30 cents a litre, compared to petrol which is around $2 a litre.”

So if you drive 15,000 kms a year then you use around 1,500 litres of fuel which for petrol is around $3,000 and the electric cost is around $450. That has to be weighed up against the purchase price differential.

The Greens want an $8,000 tax break for electric cars:

“The Green Party would exempt electric vehicles from fringe benefit tax, a move that would cut at least $8,000 off a $40,000 electric vehicle.

This would have a massive cost. With no FBT on electric cars, hundred of thousands of people would have their packages redone so they get a car as part of it.

Every sole trader will get their to buy a car for them, claim the car off tax and not have to pay FBT on personal use of the car.

The Greens policy would cost several hundred million dollars a year I’d say.

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