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Obraik
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  #2231797 6-May-2019 17:01
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Delphinus: Personally I completely disagree. Most people in a position to spend 60k on a vehicle will be businesses (or self employed) so can claim the GST back anyway. Scrapping the FBT would incentivise businesses more, who are also more likely to replace the vehicle after 3-5 years as well (adding supply to second hand market).

 

I don't think limiting subsities/incentives to businesses for a new EV is the way to go. Individuals would love to buy an EV but not at the price premium they currently are over an ICE equivilent. $60k is just an example, the same argument applies to all price points. Eg, the new Leaf that is being released soon has a $60k price but from specs POV it's the equivilent of a $40k-$50k car - within in the budget of a lot of individual new car buyers.


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wellygary
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  #2231799 6-May-2019 17:07
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Obraik:

 

I'm not suggesting you're against EVs, but you do seem to be against the idea of subsidising them while nearly every other western country is going the opposite direction and having sucess doing it. 

 

 

Although To be fair, most countries subsidize EVs to help their the development of their local EV manufacturers,   (Norway is probably the standout country EV incentiviser that doesn't have a major local manufacturer, but its got $1 Trillon in oil and gas money to stand behind it)

 

FWIW: Tesla have tripped the first halving n subsidy, and will pass the second in June, its subsidy will likely end at the end of 2019) GM are about 3-4 months behind...

 

But the big issue is what is the best bang for buck in reducing CO2, and to be honest in the short term  for NZ it is probably planting trees, (and promoting PT) so that's why Shane Jones got Billions, while James Shaw is still out begging in the cold for EV incentives...

 

 


tdgeek
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  #2231835 6-May-2019 17:43
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wellygary:

 

 

 

But the big issue is what is the best bang for buck in reducing CO2

 

 

 

 

Thats my stance. We cannot afford too many bucks. Its hard to give money away when we have many shortfalls. If we helped the business sector who roll new cars over quicker than consumers, that makes sense. We can allow 100% depreciation as that wont cost the Govt coffers. We already do that, but over a few years. Lets incentivise businesses who can buy the 70k car and get that expensed right now, good for cashflow. And very little cost to the taxpayer. That used market would be here in 3 to 4 years for that car




jjnz1
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  #2231878 6-May-2019 19:01
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tdgeek:

wellygary:


 


But the big issue is what is the best bang for buck in reducing CO2


 



Thats my stance. We cannot afford too many bucks. Its hard to give money away when we have many shortfalls. If we helped the business sector who roll new cars over quicker than consumers, that makes sense. We can allow 100% depreciation as that wont cost the Govt coffers. We already do that, but over a few years. Lets incentivise businesses who can buy the 70k car and get that expensed right now, good for cashflow. And very little cost to the taxpayer. That used market would be here in 3 to 4 years for that car



Seems another reasonable alternative. I would like to see FBT exemptions to help with the uptake then too.

I do not quite see the difference between your proposed model aimed at businesses - 100% depreciation, claim GST VS my proposed model 100% tax credit, claim GST. Both work out the same?

Ie if I use my business to buy a Tesla @ $65k, claim GST $8.5k, then offset annual profit by $15.8k vs government allowing consumer to do the same thing:

Tesla model 3 $65k
GST credit $8.5k
Tax credit $15,800 (calculated @ 28%)

I am a little confused trying to understand your interesting POV.

jjnz1
1293 posts

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  #2231879 6-May-2019 19:01
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Deleted (as a double up somehow)

Obraik
1617 posts

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  #2231880 6-May-2019 19:06
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wellygary:

 

Although To be fair, most countries subsidize EVs to help their the development of their local EV manufacturers,   (Norway is probably the standout country EV incentiviser that doesn't have a major local manufacturer, but its got $1 Trillon in oil and gas money to stand behind it)

 

FWIW: Tesla have tripped the first halving n subsidy, and will pass the second in June, its subsidy will likely end at the end of 2019) GM are about 3-4 months behind...

 

But the big issue is what is the best bang for buck in reducing CO2, and to be honest in the short term  for NZ it is probably planting trees, (and promoting PT) so that's why Shane Jones got Billions, while James Shaw is still out begging in the cold for EV incentives...

 

 

 

 

Norway, Canada and the UK are three countries I can think of that don't have local car manufacturers but have incentives. The USA has some state incentives ontop of what the federal government provides.


tdgeek
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  #2231887 6-May-2019 19:24
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jjnz1:
tdgeek:

 

wellygary:

 

 

 

 

 

 

 

But the big issue is what is the best bang for buck in reducing CO2

 

 

 

 

 

 

 

 

 

 

Thats my stance. We cannot afford too many bucks. Its hard to give money away when we have many shortfalls. If we helped the business sector who roll new cars over quicker than consumers, that makes sense. We can allow 100% depreciation as that wont cost the Govt coffers. We already do that, but over a few years. Lets incentivise businesses who can buy the 70k car and get that expensed right now, good for cashflow. And very little cost to the taxpayer. That used market would be here in 3 to 4 years for that car

 



Seems another reasonable alternative. I would like to see FBT exemptions to help with the uptake then too.

I do not quite see the difference between your proposed model aimed at businesses - 100% depreciation, claim GST VS my proposed model 100% tax credit, claim GST. Both work out the same?

Ie if I use my business to buy a Tesla @ $65k, claim GST $8.5k, then offset annual profit by $15.8k vs government allowing consumer to do the same thing:

Tesla model 3 $65k
GST credit $8.5k
Tax credit $15,800 (calculated @ 28%)

I am a little confused trying to understand your interesting POV.

 

My take is to reduce disruption to Govt revenue. 

 

You:

 

We lose GST and cash via tax credit subsidy. The lost GST is because you were going to buy an ICE now you buy an EV, NZ loses GST, cold, hard cash.The subsidy is a grant, more cold hard cash, that cannot be used to manage NZ. 

 

Me:

 

A business will but what is financially worthwhile, an EV already makes sense. Its cheaper to renefit and GSTun by its fuel, its cheaper r to repair, with only 20 moving parts. 100% depreciations means more cashflow today for the business. If I buy today, I DR Fixed Assets CR Bank. I then DR depreciation CR Fixed Assets, the car is now written off. My 65k is now 65k less GST which is standard for a business, less company tax rate of 28%. I'd even create a special case to allow 7 day refund of the Income tax benefit and GST to allow a greater cashflow incentive. This will be adjusted on the next GST and Tax return. There is no loss to NZ here, as the company already can allow 100% depreciation, but the runs over a few years. . I could even allow a tax free gain on Sale of an Fixed Asset (if its an EV) That is a loss to NZ but it also incentives earlier resale which will go to the public.

 

 

 

NZ cannot afford to give away cash, we already don't get enough for our needs, but I feel QUICK return of what a company already gets is greta for cashflow. Cashflow rules for many businesses. FBT? Yeah ok.

 

We can't give consumers these benefits unless we reduce expenditure on health, education and everything else, so we can help comfortable people buy an EV, who were already going to, in most cases




jjnz1
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  #2231898 6-May-2019 19:38
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Okay I get where you're coming from now but don't quite agree with some of your assumptions.

I do agree with your end result of effectively allowing a business to purchase a Tesla for example for $40k and allowing FBT exemptions. This means consumers who own a business or employees can get into EVs easier.

It still leaves out low income earners and stopping the purchase of old crappy unsafe vehicles at massive interest rates, that can't get a wof next time around. (but that is trying to solve another problem I guess)

It would be nice to apply your model to these people, so it is not just business owners and select employees that will benefit.

afe66
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  #2231908 6-May-2019 19:52
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Obraik:

wellygary:


Although To be fair, most countries subsidize EVs to help their the development of their local EV manufacturers,   (Norway is probably the standout country EV incentiviser that doesn't have a major local manufacturer, but its got $1 Trillon in oil and gas money to stand behind it)


FWIW: Tesla have tripped the first halving n subsidy, and will pass the second in June, its subsidy will likely end at the end of 2019) GM are about 3-4 months behind...


But the big issue is what is the best bang for buck in reducing CO2, and to be honest in the short term  for NZ it is probably planting trees, (and promoting PT) so that's why Shane Jones got Billions, while James Shaw is still out begging in the cold for EV incentives...


 



Norway, Canada and the UK are three countries I can think of that don't have local car manufacturers but have incentives. The USA has some state incentives ontop of what the federal government provides.



Nissan has been building Leafs at Sunderland plant in UK since 2013.

tdgeek
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  #2232002 6-May-2019 21:35
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jjnz1: Okay I get where you're coming from now but don't quite agree with some of your assumptions.

I do agree with your end result of effectively allowing a business to purchase a Tesla for example for $40k and allowing FBT exemptions. This means consumers who own a business or employees can get into EVs easier.

It still leaves out low income earners and stopping the purchase of old crappy unsafe vehicles at massive interest rates, that can't get a wof next time around. (but that is trying to solve another problem I guess)

It would be nice to apply your model to these people, so it is not just business owners and select employees that will benefit.

 

Its about NZ and emissions geeing benefit, side benefits are less oil imports. How can you get low income earners buying a 65k car? They buy 5k to 10k cars. Its rare to see cars that fail WOF every 6 months. A 5k car is pretty reliable, not unsafe, and its economical to own, as commuted to a 65k 5 year loan. NZ cannot afford to give cash to consumers. The consumes that can afford one, don't need a subsidy, the rest cannot afford to pay them off


Delphinus
594 posts

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  #2232008 6-May-2019 21:44
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tdgeek:

jjnz1: Okay I get where you're coming from now but don't quite agree with some of your assumptions.

I do agree with your end result of effectively allowing a business to purchase a Tesla for example for $40k and allowing FBT exemptions. This means consumers who own a business or employees can get into EVs easier.

It still leaves out low income earners and stopping the purchase of old crappy unsafe vehicles at massive interest rates, that can't get a wof next time around. (but that is trying to solve another problem I guess)

It would be nice to apply your model to these people, so it is not just business owners and select employees that will benefit.

 

Its about NZ and emissions geeing benefit, side benefits are less oil imports. How can you get low income earners buying a 65k car? They buy 5k to 10k cars. Its rare to see cars that fail WOF every 6 months. A 5k car is pretty reliable, not unsafe, and its economical to own, as commuted to a 65k 5 year loan. NZ cannot afford to give cash to consumers. The consumes that can afford one, don't need a subsidy, the rest cannot afford to pay them off

 

Exactly. There is no point putting someone who can only afford a $5k car into a $60k car (or with a $60k loan, even at 0%). The insurance alone would be outside their budget. Those $5k buyers are always going to be buying second hand cars. And that's fine. More people that buy EV's today, the more [current, safe] ICE cars they flick off (to the $5-10k buyers) today, this year, next year. Then in 3-5 years the EV's trickle down into cheaper second hand options.

GV27
4307 posts

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  #2232061 7-May-2019 07:37
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Delphinus: Exactly. There is no point putting someone who can only afford a $5k car into a $60k car (or with a $60k loan, even at 0%). The insurance alone would be outside their budget. Those $5k buyers are always going to be buying second hand cars. And that's fine. More people that buy EV's today, the more [current, safe] ICE cars they flick off (to the $5-10k buyers) today, this year, next year. Then in 3-5 years the EV's trickle down into cheaper second hand options.

 

Given the 2016 - 2017 30kwh Leaf is still $25K - $30K as a grey-market import, I can't see them suddenly becoming affordable within a few years. Evidence from overseas would suggest that the Teslas tend to hold their value better than anyone expected. 


tdgeek
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  #2232089 7-May-2019 07:56
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GV27:

 

 

 

Given the 2016 - 2017 30kwh Leaf is still $25K - $30K as a grey-market import, I can't see them suddenly becoming affordable within a few years. Evidence from overseas would suggest that the Teslas tend to hold their value better than anyone expected. 

 



 

Yes, its a different beast totally to an ICE. A new ICE wears out, a new EV doesnt wear out, although you do need to account for a battery change long term. An EV is a walking fuel saver, I'd keep one for many years as the permanent commuter/around town money saver vehicle. Plus if its 60k new, 35k is relatively cheap already, yet its the price of a new ICE, so still out of reach for many


frednz

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  #2232116 7-May-2019 08:52
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At the moment, the Government seems to have stalled on its intention to introduce meaningful EV incentives. This is unfortunate because the very ones who should be pushing EV sales along, are actually stalling the market because of uncertainty about future Government policy on EV incentives.

 

So, I think it's urgent that the Government announces its policy on EV incentives and tells us one way or the other whether incentives are going to be introduced and the timeline for this.


tdgeek
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  #2232133 7-May-2019 09:09
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frednz:

 

At the moment, the Government seems to have stalled on its intention to introduce meaningful EV incentives. This is unfortunate because the very ones who should be pushing EV sales along, are actually stalling the market because of uncertainty about future Government policy on EV incentives.

 

So, I think it's urgent that the Government announces its policy on EV incentives and tells us one way or the other whether incentives are going to be introduced and the timeline for this.

 

 

I agree. The Government needs to be transparent so businesses make plans.

 

There must not however, be any cash subsidies, businesses do not need cash to decide to buy, they need cost saving benefits, which EV has, and any cashflow benefits from early recovery of depreciation and GST will add more weigh to this.

 

 


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