Clean Car Discount changes July 2023

Forums › Transport (cars, bikes and boats) › Clean Car Discount changes July 2023

nova

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#304449 4-May-2023 19:06

Rebates and fees are changing from 1st July, making most new car purchasers at least $1500 worse off, and removing much of the rebate from hybrids (PHEVs will still get something but most other hybrids miss out).

Do people think they will buy now to avoid the price changes?

The only category that will be better off is used EVs, by $57, but all other categories lose out. Only cars below with CO2 emissions below 100 g/km will now get a rebate, so a used Prius S that currently gets a $1,429 rebate will soon get no rebate at all.

More details are here and it is only for a very tiny range around 150 g/km where the difference for new cars is less than $1500 (look at vertical distance between the two lines on the graphs). For used cars the biggest impact is on hybrids and smaller petrol and diesel cars.

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#3072420 4-May-2023 19:08

Existing discussion thread https://www.geekzone.co.nz/forums.asp?forumid=162&topicid=197896&page_no=575#3070096

nova

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#3072427 4-May-2023 19:29

RunningMan:

Existing discussion thread https://www.geekzone.co.nz/forums.asp?forumid=162&topicid=197896&page_no=575#3070096

Thanks, didn't see that. Mods can delete this thread if they want.

But in defence I will mention that that thread is a 500 page long thread around EV news, and the changes affect everyone, not just EV owners. Having super long discussion threads makes it hard to know what the thread is talking about.

Scott3

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#3072429 4-May-2023 19:37

In Hindsight I (as one of the more prolific posters on the topic), should have created a new thread for the extensive discussion on the Clean Car discount policy.

The discussion in the EV thread started as lightweight speculation, so I kept discussing their, even when the discussion became heavier, and included a lot of content specifically about non EV aspect's of the scheme (such as Hybrid mobility vehicles).

I would be fine for mod's to move the Clean car discussion posts here (but the effort involved might be excessive)

nova

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#3072475 4-May-2023 20:00

Thanks Scott3 - it is all good, I just didn't know about that, and was a little slow to post this anyway. Makes more sense just to delete this.

Mehrts

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#3072478 4-May-2023 20:42

I think it's appropriate to have a dedicated thread regarding the Clean Car scheme.

It affects a wide range of vehicles from zero & low emission ones which get the rebate, through to the higher emission ones which are charged the fees.

Personally I'm eagerly awaiting the delivery of a Model 3 which is estimated to be between June 14-30, so that's a very tight window to have the rebate applied for before July 1st in order to be paid the higher rebate amount. Fingers are crossed it all works out, but I'm also being realistic and expect to receive the lower amount.

Wheelbarrow01

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Chorus

#3072490 4-May-2023 22:43

I got a good chuckle from the Tesla aficionado whose comment on a recent Stuff article was totally tone deaf...

It reads, in part: "The fuel savings on my Tesla is 2 return flights to Fiji every year".

Cool! So someone could drive their Ranger a shade more than 8000kms before they exceed this guy's leisure flight emissions of approx 1.6 tonnes - every year.

I concede that maybe he was just using this example to demonstrate the dollar value of savings he expects, but if so he should have chosen a harmless comparison like "buys enough vegan food to nourish 7 Buddhist monks for a year". That would have come across as much less of an own goal.

Dingbatt

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#3072579 5-May-2023 08:38

Wheelbarrow01:

Cool! So someone could drive their Ranger a shade more than 8000kms before they exceed this guy's leisure flight emissions of approx 1.6 tonnes - every year.

Very Approximate (unless he’s going by private jet).

A B737/A320 trip to Nadi burns about 40kg of aviation fuel per passenger. This equates to 127kg of CO2 per sector for this particular passenger.

“We’ve arranged a society based on science and technology, in which nobody understands anything about science technology. Carl Sagan 1996

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alasta

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#3073085 6-May-2023 13:52

I think this is going to backfire politically. It sort of made sense in its previous form because the tax mainly applied to utes, the buyers of which are unlikely to vote Labour, and there is a lot of negative sentiment towards people buying utes just for the macho factor.

The new incarnation of the scheme is different because it is going to clobber people with a $2k-$3k tax for buying a sensible, mid sized family vehicle. I get that this is a tech forum and a lot of people here love their Teslas and whatever the Chinese equivalent is, but the majority of car buyers are going to be loyal to the mainstream marques for some time to come.

I normally replace my car every five years, making it due for replacement early next year. I considered rushing through a purchase now but decided against it as I have just replaced the tyres on my existing car and I suspect the rush to buy cars before the change will mean that it's hard to negotiate a good deal. I will wait until after the election in the hope that National gets in and repeals it or, if not, then I'll probably have to downsize from a medium sized car to a small one to minimise the ute tax.

Handle9

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#3073091 6-May-2023 14:13

alasta: I'll probably have to downsize from a medium sized car to a small one to minimise the ute tax.

If that’s the case then the scheme is working perfectly.

The point of the scheme is to incentivise lower emissions and this is achieving that goal.

Scott3

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#3073251 6-May-2023 23:11

For sure the policy is tough politically.

In short, the clean car discount has turned into an unintended $300m net subsidy for New / Fresh import car buyers / industry. Likely due to the following reasons:

No allowance for Russia to invade Ukraine, causing a big surge in oil prices, and a massive run on EV's.
Underestimate of how much the rebate / fee would impact consumer behavior. Toyota hybrids & cheaper EV's are selling like hotcakes. People who would have typically brought a used car jumping into the used car market... Buy a Suzuki swift manual (not even the hybrid version) @ 5.1L/100km, and the government will chip in more than 10% of the price.
Underestimate how much the scheme would impact brand behaviour. Toyota NZ no longer even bothers to offer the non hybrid versions of cars like the Highlander, Camry & Corolla (excl GR).
Underestimate of the impact of the release of new EV models on EV sales. (especially Model Y, Atto3, and refreshed MG ZS EV)

So this change needs to essentially suck $300m (plus an allowance for the average greening of the fleet over the next year) out of the industry.

Net result of this policy change is come July 1, every new / fresh import car in the marketplace will become effectively between $400 and $3400 more expensive. (excl Used EV's, EV's that don't qualify for the rebate & hybrid / EV mobility vehicles)

Not really any way to sugar coat the above. The policy was too generous, and unwinding that is going to make basically everything more expensive. Worst part politically is that assuming the fleet continues to get cleaner, every year the government will need to do a re-balance, which again will make most cars more expensive, and cop negitive media attention.

With hindsight, the policy design was / is problematic politically. Essentially by design it is going to generate negitive press by which ever government is in power and does the rebalance. As @alasta points out, it is no longer just the diesel ute & v8 buyers pissed off. Now even a Suzuki sport swift cops a fee.

New:

EV (rebate eligable) + $1610
PHEV (rebate eligbale) + $1725
Suzuki Swift Hybrid + $3161
Corolla Hatch Hybrid: $3,418.28 (hardest hit car I found, at 101g CO2, it misses out by a single gram on a rebate in the new system)
Mitsubishi Outlander petrol + $2645
Any Diesel Ute +2645

Used:

Toyota aqua (89g/km CO2): +$436
Mazda Demio (118g/km verson): +$1017
Mitsubishi outlander (206g Co2 version): +$1035
Suzuki Swift (136g version): +$633
Suzuki Swift Hybrid: +$1,224

And dealers are pissed that they haven't been given enough time to change their orders. Going to be hard to sell swift sports now they cop a fee for emitting so much.

A suggestion I raised in the other thread to fix the issue of political problem of the big jump is to have automated weekly or monthly re-balances to keep the program revenue neutral. Hopefully the changes would be so small and frequent they would no longer be newsworthy.

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alasta: I'll probably have to downsize from a medium sized car to a small one to minimise the ute tax.

As per the other post, this is the point of the scheme, to incentive's people into more efficient cars.

That said I should note that some very big cars like the 184kW Toyota highlander hybrid make it into the new free band.

I ran the analysis in the other thread of a potential Mazda CX-5 AWD buyer. One of the harder hit models (+$2932.50) it is currently right at the top of the free band.

https://www.geekzone.co.nz/forums.asp?forumid=162&topicid=197896&page_no=580#3072046

In short: Rush out and buy an in stock one / Buy a lower emitting car / pony up the fee.

But I noted the desire to avoid the ute tax is psychological. Sure one could get in the wait-list for a Rav4 hybrid (in the new free zone), but that car is going to loose a $2500 rebate. So the net change vs now is only $500. $500 isn't massive in the scheme of a $50k car, so if a buyer changes behavior it is likely to be more due to the stigma (or distaste) of paying a fee, than the actual fee itself.

I support the clean car discount, but from a policy perspective wonder how any political party can justify the political heat from re-balancing it year on year. On introduction it was only ute (and similar emmiting vehcile) buyers who were upset, but now, somebody who is in the long queue for corolla hybrid needs to find another $3,400 in their budget as the goal posts have moved, and despite being one of the the cleanist non plug in car's on the road, is no longer clean enough to be eligible for a rebate.

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Perhaps one of the bast aspects of the clean car discount, is that it has provided a near complete distraction from the clean car standard.

The clean car standard is a pretty powerful bit of legislation. When it kicks in in a few weeks, if Nissan sells a Y62 patrol, and their fleet average is at / above 145g/km/Car CO2 (utes and some vans get a higher limit), they either need to sell roughly 0.7 Nissan leaf's to offset, pay a $4787 fee, or buy credits from a cleaner automaker. The cap drops quickly. 63.3g/km CO2 for passenger vehicles in 2027.

Fee based 2706kg tare on 335g co2/km for the Y62, I converted to 14.4L/100km to get this so there will be rounding error. $45* (145*0.0841*(2706-1441)) = $4787.393

But of course this scheme is a bit complicated to explain, and doesn't directly consumers so it as got minimal media attention vs the Clean Car Discount. Sure will have an impact brands willingness to attractively price & sell EV's, when each EV sale is worth thousands in credits, and the opposite for v8 SUV's and Mustangs.

Of course teh clean car standard does have issue's:
- Weight scaling, advantages heavier vehicles. Means a Kia EV6 is treated better than a Tesla model Y, despite the vehicles having similar attributes (model Y is much lighter than EV6) Not really fair & from a safety & efficiency perspective we should not be encouraging heavier vehicles.

- Significantly higher limit for Utes and some van's (on top of the weight scaling above): Means a Hilux will be favored over a fortuner (basically a hilux with a SUV boot, not a tray). Impact on pricing could swing a buyer who would have otherwise purchased a hilux to the higher emitting fortuner, a perverse outcome. Likewise, a minivan shopper who would otherwise have been purchased a 8 seat Kia Carnival, might be swung by the pricing impact of the clean car stranded to the higher emitting 10 seat Hiace ZR Minibus (9 seats + gets the higher limit). Again a perverse outcome from an emissions perspective.

I honestly thought that the Clean Car Discount was a smoke screen to get the Clean Car Standard passed, and it would subsequently be scrapped. But it turns out that the political parties have more balls than I thought, and they did both of them.

jonb

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#3073393 7-May-2023 13:41

The Clean Car Standard is definitely going under the radar so far but agree is a big change, affecting some brands a lot more than others. Ford is more 'top heavy' than Toyota, with the Ranger (and to lesser extent Everest) making the majority of sales. Smaller ones like Isuzu will be hit hard with only selling the high emitting D-max and MUX. Mitsibishi selling a lot of Hybrid Outlanders and ASXs compared to fewer Tritons and Pajero Sports will be better positioned.

Can see Toyota easily just stopping offering the Fortuner as it has never been a big seller but still pushing up the fleet averages.

nova

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#3073522 7-May-2023 21:39

The clean car standard will have a massive impact, and it is staggering that there is not more publicity around this. The CO2 target reduces from 145 g/km in 2023 to 66.3 g/km in 2027, with the price per gram increasing from $36 to $54 over that time. I'm quoting pay as you go pricing, fleet average pricing is more expensive. I don't understand why that is, as pay as you go credits appear to be trade-able, so you can achieve the same effect as fleet average at a lower cost.

Under the policy, a Mitsubishi ASX which emits 196 g/km would attract a fee of $2,016 in 2023. This increase to $7,290 in 2027. A Toyota Corolla Hybrid which emits 101 g/km would have a $1,476 rebate in 2023, but by 2027 this flips to a fee of $2,052. This is an effective increase of $5,276 for the Mitsubishi, and $3,528 for the Toyota (all using PAYG pricing).

It really is a very insidious policy, and every single new car that Toyota currently sells would be hit with a fee by 2027. So it seems inevitable that these charges would pass onto the consumer, the importers can't absorb the charges without creating price signals for the consumer.

It is very surprising that they are using both clean car policies. The combined impact is very significant, even for fuel efficient hybrids. There is also already an ETS levy on petrol / diesel, which most economists would argue is sufficient in itself to drive the desired behaviour. If you use an emissions trading scheme and progressively lower the cap, everything else should self-adjust to match, and consumers would naturally shift to lower emitting and therefore cheaper forms of transport.

Obraik

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#3073748 8-May-2023 10:59

That's the point, it's mean to be a significant impact and incentivise car makers to not ignore NZ when allocating cleaner vehicles. Prior to the CCD and CCS, NZ's only new EV options were really Tesla and a few from Hyundai, with other companies prioritising Europe. Two years later, we have a far larger choice of vehicles to choose from.

Direct your feedback to the car makers. If you want a Ute, tell Ford to accelerate bringing the F150 Lightning drivetrain to the Ranger. If you want a Corolla, tell Toyota to stop sitting on their hands and actually do something with their wealth. Hold the car companies responsible.

Looking to buy a Tesla? Use my referral link and we both get credits

Scott3

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#3073763 8-May-2023 12:17

And yet again I have dragged another thread off topic

jonb:

The Clean Car Standard is definitely going under the radar so far but agree is a big change, affecting some brands a lot more than others. Ford is more 'top heavy' than Toyota, with the Ranger (and to lesser extent Everest) making the majority of sales. Smaller ones like Isuzu will be hit hard with only selling the high emitting D-max and MUX. Mitsibishi selling a lot of Hybrid Outlanders and ASXs compared to fewer Tritons and Pajero Sports will be better positioned.

Can see Toyota easily just stopping offering the Fortuner as it has never been a big seller but still pushing up the fleet averages.

Mitsubishi NZ doesn't offer a hybrid version of the ASX. It comes in two engine versions, one at 196g/km CO2, and the other at 207g/km CO2.

It will be one of the harder-hit models. $2645 - $3,277.5 In clean car Discount fees for the buyer, plus the importer needing to offset of pay for the emissions being above the clean car standard cap.

Suspect the (first generation) ASX will be pretty promptly dropped by Mitsubishi NZ. The model is pritty unremarkable and dates back to 2011. Is just too high emitting to compete against cars like various Toyota hybrid's, and the Mazda CX-3 (157 g/km CO2), in an environment where thousands of high emissions fees need to be paid. That bigger engine version is rated to emit basically the same as a Ranger XLT Double Cab wellside auto (211g/km CO2).

2nd generation ASX has been in production since 2019 (for the euro market) is a rebadged Renault Captur. Available in Petrol (mid power engine 131g/km, Hybrid (106g/km CO2 and PHEV versions (33g/km)

As the system currently stands Mitsubishi will do OK, thanks to their large volume of PHEV's. PHEV's are treated pritty well under both the clean car discount (57% of the rebate of a pure EV under the new setting's), and the clean car scheme (WLTP ratings must assume the vast majority of running is on petrol as they seem to have emission ratings around the 30 - 40g/km range.

On utes, these get special treatment (along with some larger van's) under the clean car standard. Their fleet average is 218.3g/km (vs 145 for passenger vehicles). So the Mitsubishi will be thousands better off to sell a Triton, than the slightly lower emitting Pajero sport.

And Mitsubishi is expected to be the first of the large volume brands with a plug in ute. A PHEV is expected to Launch globally in the middle of this year, with AUST deliveries in 2024, per the below article.

2023 Mitsubishi Triton Spy Photos 6

https://www.whichcar.com.au/news/mitsubishi-triton-phev-wont-be-a-showpony-ev-says-boss

Ford also has a PHEV ute in the work's, but its rumored to make 270kW, so is likely to command a very high price, so I expect that the mitibishi one will sell well.

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Yeah, could well see models like the Fortuner dropped. As you say it is a lower volume seller (who would have thought that Toyota would release a proper Low range, off road 4x4, priced way cheaper than the Pardo, and it would only sell in low volumes). And under the clean car standard, Toyota is better off if they push those buyers into hilux utes instead (perverse outcome as the hilux emits a little more). Sad news for anybody who likes cheaper, off road capable SUV's.

[edit] - Brands with little decent Hybrid / Plug in offerings in the pipeline will have a bit on over the next few years, especially ones that are not ute heavy.

Mazda, Suzuki etc.

Brands that are Ute heavy (Ford, Isuzu), will have a bit of a reprieve. Currently, all the players are in a similar spot, so people who want to buy a ute simply have to pay up the fees (unless they are ok with the RWD LDV eT60). And utes get special treatment under the clean car standard. However in stay late 2024, if Mitsubishi & Ford have their PHEV's released, this could cause major issues for other brands. PHEV Triton will get $4,025 Clean car discount, while say an auto 4x4 hilux pays $5,635.00. (plus the diesel importer need to pay for clean car standard credits.

---- Will be interesting to see if the big brands shift their pricing when the clean car standard kicks in, to account for the costs of compliance.

boosacnoodle

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#3073768 8-May-2023 12:32

The impact of all of these changes is they have the effect of making EV's look more attractive on a simple price comparison basis compared with before. Nothing more, nothing less. If your petrol vehicle - no matter how "efficient" - is more expensive now that's not an accident (that's by design).

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