Last month’s sales of electric vehicles plummeted to a three year low for the month of March, new data from the NZ Transport Agency shows.
In the wake of the Government’s scrapping of the Clean Car Discount policy, which subsidised low-emissions vehicles, sales have fallen. While EV sales did rise in March as compared to January and February, they remained well below previous levels.
Just 4.5 percent of new vehicles registered last month were fully electric, with another 1.8 percent being plug-in hybrids. That’s less than a third of the market share clean vehicles had in March 2023. On average across the past year, one in five new vehicles sold was electric.
When the numbers for January were released, showing the worst sales month for EVs since 2020, the chair of the advocacy group Drive Electric warned it was “exceptionally unlikely” that figures would return to 2023 levels by the end of the year.
“We will see low EV sales for a while. Whatever you think of the Clean Car Discount policy, it really worked. In 2018, two percent of new car sales were electric. Last year, we were 27 percent,” Kirsten Corson told Newsroom at the time.
“If you look internationally, all of the key markets that have EV growth, it’s because they’ve got incentives. China took their incentives away and then they put them back in place. If you look at Germany, they’ve removed their incentives and seen a 50 percent reduction in EV sales.”
The reduction in New Zealand is far greater than that – almost a 75 percent decline in the first three months of the year compared to the 2023 average. In order for sales to return to 2023 levels this year, EVs would have to make up one in four new vehicles sold for the next nine months, up from one in 18 in 2024 so far.
Transport Minister Simeon Brown said the reduction in EV sales was due to people bringing forward purchases to November and December, while the subsidy was still in effect.
“When I announced that the coalition Government would be scrapping the so-called Clean Car Discount, I expected that would result in some people bringing forward their purchases of EVs and PHEVs so they could receive a discount before it was discontinued. This is exactly what has happened,” he said.
“EV sales were expected to slow following the removal of the ute tax; however it is pleasing to see that sales are already picking up in March compared with January.”
A report commissioned from Concept Consulting in December by Drive Electric suggested that without the Clean Car scheme, there could be 100,000 to 300,000 fewer EVs on the road in 2030. One in five cars on the road at the end of the decade would be an EV if the Clean Car Discount stayed, dropping to one in 10 if it was scrapped.
Speaking to the latest figures, Corson said policy settings were now “increasingly favourable for petrol and diesel vehicles”.
April 1 saw the entry of electric vehicles into the Road User Charges schemes. Fully electric vehicles will pay nearly twice as much in road tax under the arrangement than a non-plug-in hybrid and 23 percent more than a petrol car.
“There is a need for measures to encourage EV demand, otherwise we risk losing models and volume to other [right hand drive] markets, which will make a recovery slow,” Corson said.
“EVs remain the future for automotive technology globally, but we risk being left behind if we don’t encourage uptake here. A petrol/diesel vehicle bought today will be on our roads for the next 15 to 20 years.”
First, it would seem that figures are improving somewhat, but the last sentence says it all “A petrol/diesel vehicle bought today will be on our roads for the next 15 to 20 years.” Believe it or not we are in a recession, spending overall has fallen, many are facing job uncertainty so a cheap “gas guzzler” (my 18yo Toyota Corolla still manages 7L/100km) is the preferred option – at around $5k to replace. Also EV sales in the UK have also plummeted. due not just to removal of subsidies but: cost (still much higher than a diesel/petrol alternative; the huge cost of insuring and repairing an electric car and the very poor resale value. Likely the same applies here. Add to that, nobody in NZ has convinced me that the used lithium battery and the plastic car body, in NZ, will go anywhere but landfill. I cannot see a shipping company accepting a container of “dead” batteries to ship to Nigeria – given the maritime losses to lithium fires, and the mantra (prayer?) “there will be other uses” is just wishful thinking.
John, the real issue is that we are running backwards in terms of reducing transport emissions with the removal of the CCD and the possible introduction of RUC for all vehicles, the latter ignoring efficient fuel use and paid solely on distance travelled.
The real benefits of the CCD were accelerated EV adoption and the creation of a vibrant used-EV market in NZ. That’s now gone and replaced by punitive RUC charges that are almost x2 that paid via petrol levies for an ICE sedan ($76 vs $40 per 1000km ).
Furthermore, the claim that used EV value is poor is incorrect. It’s a car – not an asset. My Model 3 was worth 80% of its buy price until the CCD was introduced and then it became about 50%. I’m OK with that – more EV options and higher volumes should drive the value down. You can’t complain both ways – you can’t say EVs have a high purchase cost and then criticize them when the buy price and resale value falls – pick one. We actually want normalized prices in relation to ICE vehicles.
Finally, please ditch the “EVs can’t be recycled” argument. It’s factually wrong and is a higher hurdle than ICE vehicles have to meet. Used EV batteries are worth a lot and the raw materials like lithium are never “used up” in the battery – the battery chemistry is simply degraded. EV parts last longer than ICE and more parts can be re-purposed than in any ICE vehicle e.g. for home energy storage. I agree with you that the only way any of this is avoided is to not make new cars in the first place, but it’s human nature to buy new things and I would prefer that more clean vehicles were available instead of big utes, which plenty of kiwis can still find $60-$80,000 to purchase to carry the dog & groceries. EVs are an imperfect part of the solution.
and more parts can be re-purposed than in any ICE vehicle e.g. for home energy storage.
Can you point me to the Electrical Code of Compliance that allows for this Laurence? Also, what insurance companies will cover the use of second hand EV parts in Standard Voltage electrical installations connected to the grid?
This government clearly knows who it’s election funders are!