New Zealand’s Socialist Government Mulls EV Aid

New Zealand’s long run of increasing new-car sales could come to a screeching halt as the new socialist government mulls slapping a levy on gasoline-powered vehicle imports to subsidize electric cars.

The suggestion came after New Zealand’s Productivity Commission called for a shift from fossil fuels to clean electricity to help reach the government's goal of net zero emissions by 2050.

Climate Change Minister James Shaw tells Radio New Zealand one way to achieve this is to make EVs more affordable.

“So, what the report is talking about is a ‘freebate’ system, where essentially we charge a price on – we put a levy on – fossil-fuel vehicles and you use that revenue to subsidize electric vehicles,” he says.

Shaw says it is well-known EVs are less costly to operate and maintain because they have fewer moving parts, but their upfront cost is prohibitive.

He says he doesn’t know when such a change might be enacted, and it is just one of many options the government is considering.

A Westpac Bank report says there are 1,015 EVs registered in New Zealand, while similarly sized Norway has 70,000.

Steven Selwood, Infrastructure New Zealand’s chief executive, tells the broadcaster most New Zealanders depend on the mobility provided by relatively inexpensive secondhand Japanese imports.

“I'm never quite convinced that taxes are the best answer,” Selwood says. “On the other hand, the opportunity to really accelerate the adoption of EVs is positive.”

The opposition National Party says a levy on gasoline-vehicle imports would amount to a tax on the poor.

Party transport spokesman Jami-Lee Ross says people who only can afford the used Japanese imports effectively would be subsidizing the cost of EVs for the wealthier New Zealanders buying them.

ACT Party leader David Seymour agrees a levy would be going too far.

“EVs are already massively subsidized because they don't pay petrol (gasoline) tax and they also receive preferential treatment in high-occupancy-vehicle lanes,” Seymour tells Radio New Zealand.

Seymour says if these initiatives haven’t already got people driving electric cars, it may be wiser to wait for the technology to advance and EVs’ range to improve.

Range anxiety could be a problem. The 990-mile-long (1,594 km) country has only 142 public fast-charging stations.

Energy Minister Megan Woods has announced NZ$3.7 million ($2.7 million) in grants from a low-emission-vehicles fund that includes NZ$1.7 million ($1.2 million) for projects to help fill gaps in the country’s charging infrastructure.

The projects require the government money to be at least matched by private investment.

The fund is part of a government initiative that aims to double the number of EVs every year to reach 64,000 by the end of 2021.