Exhaust fumes from rush hour traffic dirty the air in Havana, Cuba. Photo: Getty Images

Car company Toyota has asked the new transport minister to set in place financial incentives for electrified vehicles

Toyota New Zealand’s chief executive has issued a strongly-worded call for a “feebate scheme” to bring electric vehicles within the reach of business and household budgets.

“If we are not careful, New Zealand will become the Cuba of the South Pacific, a dumping ground of Europe’s dirty diesels and high carbon-emitting petrol-fuelled cars,” Neeraj Lala warned.

He said New Zealand’s Paris Agreement target would not be met without incentives for electrified cars and a feebate scheme provided much needed financial incentive at no cost to taxpayers. This would need to include both new and used imported vehicles

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A feebate scheme, as proposed in the last Parliament, would incentivise private and fleet buyers of low-emitting vehicles. It would add a levy to high-emitting vehicles and use that revenue to reduce the price of low-emitting vehicles costing less than $80,000.

Transport Minister Michael Wood said he’d had a good discussion on the issue with Toyota. “I’m open to keep talking and we’re keeping our options open,” he said. “Transport makes up 20 percent of our emissions – we know we have to increase the uptake of electric cars and hybrids.

“That’s why we’re planning to build more charging infrastructure around the country to give Kiwis the confidence to switch over.”

Lala took over as chief executive in July, at a time when he said the.company was transitioning from a traditional automaker, known for its cars, trucks and vans, to a mobility company focused on future technologies.

Today, he said the move by the United Kingdom to ban sales of new petrol and diesel-powered cars by 2030 served as both an encouragement to New Zealand policy-makers, and a danger sign that this country could be flooded with used internal combustion engine vehicles at the end of this decade.

“Companies such as Toyota would be willing to supply the public sector with low-emitting vehicles, but not at cost – it needs to be a win-win for both parties.”
– Neeraj Lala

New Zealand needed to work urgently on the right policy settings to encourage much higher take-up of electrified vehicles through meaningful financial incentives, he said. “We also need to make sure that we do not end up importing vast numbers of ICE passenger vehicles. Otherwise there is no hope of meeting the Paris Agreement’s 2050 net-zero carbon target.”

As the worldwide supply of hybrid and battery electric vehicles became stretched due to global demand, he said New Zealand would find it harder and harder to access stock without a financial incentive. “Essentially, we need to get our hybrid and EV numbers up to get higher stock allocations. The feebate scheme should be back on the table, urgently.”

This week Prime Minister Jacinda Ardern declared that New Zealand was in a climate emergency, and that the public service would be carbon neutral by 2025. But just a few days earlier, the police had announced they were replacing their petrol-powered Holden police cars and utes with 2000 new petrol-powered Skodas. They said the whole-of-life motoring costs for electric vehicles were not yet competitive.

Lala himself, on taking over as chief executive, disclosed that he drives a 2020 Toyota Supra – a two-seat sport coupe with a turbocharged 3.0-litre six-cylinder petrol engine.

Lala welcomed the leadership shown by Ardern’s climate emergency declaration, but said the Government needed to put financial resources behind its policy. “Companies such as Toyota would be willing to supply the public sector with low-emitting vehicles, but not at cost – it needs to be a win-win for both parties.”

With transport emissions accounting for nearly 20 percent of all carbon output, car companies had a large influence on how New Zealand will progress to a zero-carbon economy, Lala added. “The transition to a low emissions transport market comes with a price tag, but the cost of not enabling a greater uptake of low emissions vehicle could cost Aotearoa/New Zealand and the planet a lot more.”

Newsroom Pro managing editor Jonathan Milne covers business, politics and the economy.

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