Officials are warning more needs to be done to get New Zealand on the EV map as demand for low-emissions vehicles outstrips supply. But the Transport Minister says word is spreading that we're open for business.
Transport officials have told the Government New Zealand’s profile as an EV market needs to be raised as waitlists for new cars balloon and a second-hand market takes time to heat up.
Demand for clean cars has boomed since the Government rebate scheme came into effect and there are now 341,297 low-emitting cars on the road - about 10 percent of the light vehicle fleet.
The majority of these are 'moderate' emissions vehicles which means each vehicle emits at least 57 - but no more than 146 grams - of CO2 per kilometre travelled.
The goal is to have 30 percent of the light fleet made up of zero-emissions vehicles by 2035. As at October 11 the Ministry of Transport recorded 40,000 zero emission vehicles - a little over 1 percent of the total fleet.
One and a half million more are needed in the next 13 years.
Imported Motor Vehicle Industry Association chief executive David Vinsen said stoking the demand before supply was always the plan.
“The clean car discount was quite deliberately designed to influence consumer demand so the consumer gets the penalty or the incentive... So the discount is designed to influence demand and the clean car standard is designed to accentuate the influence on supply.”
The clean car standards come into effect from January 1, 2023 and will strengthen significantly each year through to 2027.
Importers face penalties for bringing in higher-emitting vehicles than the standard is set at. The first standard is 145g/km - the top end of what is deemed a 'moderate' low-emissions vehicle.
By 2027 it’s down to 63.3g/km almost wiping out the 'moderate' vehicles class.
Officials told Wood achieving the 2035 target, as well as achieving the CO2 reduction targets, “requires New Zealand to successfully secure enough EVs in a fiercely competitive global market”.
“Without support, distributors may struggle to achieve these targets,” they wrote.
“To improve EV supply in New Zealand we recommend officials and ministers seek opportunities to raise the profile of the New Zealand market with relevant governments, organisations and automakers key to the manufacture and supply of EVs. A number of local distributors have indicated this would be helpful.”
"Without being smart about it, they're not making any more brand new, five-year-old EVs. What's there is what's there." - David Vinsen, VIA.
Officials noted New Zealand was particularly exposed to the supply constraints because of the relatively small, and right-hand drive market.
They said the range of brands and price points had expanded rapidly, but volume remained a pressing issue.
“Other than Tesla none of the distributors appear to be in a position to supply in volume (over 1000 units per year). This is causing significant wait times for all new passenger EV models, and a pattern where models sell out before they arrive.
“All brands supplying EVs into New Zealand state they cannot secure sufficient allocations to meet demand.”
Another factor was a looming crunch point in receiving second-hand EV vehicles from Japan, but signals were there for a strong second-hand hybrid market.
“We may be approaching the limit of the used import EVs Japan can supply due to its low domestic EV uptake.
“Used EVs currently represent half of imported EVs, but without additional supply this will drop ... quantities are expected to remain low while Japanese government policy and automakers focus on hybrids and long-term hydrogen projects.”
It’s these second-hand hybrids, rather than full EVs, that might end up supporting New Zealand in the short- to medium-term.
Vinsen said importers were working as hard as they could but supply constraints were always going to be a given.
He said Japan had about 120,000 EVs, and New Zealand had already purchased just over 30,000 on the second-hand market.
“And without being smart about it, they're not making any more brand new, five-year-old EVs. What's there is what's there.”
He noted the UK could be a strong second-hand market.
“As the exchange rate has changed with the UK pound having dropped in value that means that we might have more purchasing power to buy used EVs and hybrids from the UK.”
A good news story
Wood said there were challenges to work through but ultimately this was a good news story.
“In recent months, we've had between 35 and 40 percent of the new vehicles coming into New Zealand being zero emissions, largely EVs, and that's a direct result of the Clean Car discount, which has just really, really unlocked demand and we can see from those figures that so far suppliers have been able to get good supply into New Zealand.
“Sometimes, dealers are waiting for a particular ship to come in with a big consignment of vehicles and sometimes there are little wait lists for EVs coming in, that's not a problem and into New Zealand there have been particular supply chain challenges over the last couple of years.”
"I think we're pulling all of the levers that we can to try and make sure we get that supply." - Michael Wood, Transport Minister
He said the clean car standards coming into play soon were helping importers get stock into the country.
“The standard is helpful in terms of the shift to clean the vehicles because a) it's a commonly-used device in countries around the world and b) head offices who effectively divvy up how many vehicles each country get can clearly understand the commercial imperative for our importers to be able to bring in cleaner vehicles that don't attract charges.”
He pushed back against the idea more needed to be done at a ministerial level on advocating for New Zealand as an export market.
“I believe that we are putting ourselves out there really strongly. Our ambition is to be one of the world's leading markets for zero emissions vehicles. The stats that are coming through in New Zealand now put us near the top of the world.”
“Over recent months, we've been up around 30-40 percent, that's higher than Europe, that's higher than the UK, we are right at the top in terms of the importation of zero-emission vehicles as a percentage of our fleet.”
Wood recently attended the International Electric Vehicle Symposium and Exhibition hosted by the European Association for Electromobility in Norway.
A key address he delivered hinged on the fact New Zealand was now open for business with regard to EV uptake.
“The Prime Minister on many of her visits makes it a priority to talk about the work that New Zealand is doing in the space.
“I've put the message out to New Zealand importers across the board, that I will help support them directly when they're engaging with the suppliers and terms of getting stock here. So I think we're pulling all of the levers that we can try and make sure we get that supply.”
He also said work was underway with Australian officials and at a ministerial level to support the supply of right-hand drive vehicles to this part of the world.
He said the 2035 target was ambitious, but remained confident it could be achieved.
