Clean Car Upgrade programme - new scrap-and-replace trial

Forums › Transport (cars, bikes and boats) › Clean Car Upgrade programme - new scrap-and-replace trial

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#2915439 18-May-2022 09:42

Geektastic:

Surely the idea is to encourage people not to buy high emission vehicles? Once that happens (and it’s not hard - my Mercedes E400d has a 3 litre twin turbo straight six diesel and it attracts no penalty) it won’t be cost neutral.

The number of vehicles that receive a fee increases each year as the emission limit is lowered. So each year, more new ICE vehicles will be contributing to the fund. As the scheme gets further down the line then less vehicle categories qualify for the rebate (ie, efficient ICE vehicles are removed, hybrids, PHEVs, etc) and the rebate value starts to reduce.

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tdgeek

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#2915441 18-May-2022 09:44

Obraik:

I don't think a discussion on whether it's good or bad can really happen until the actual details are revealed. At the moment all we know is that it will apply to households with a combined income of less than $75K for vehicles $35k or less. Important things we don't know:

How much of that $35k is the government paying?
If there is any shortfall, will the government provide a loan to the buyer or will that fall on loan sharks?
What happens if someone then sells their "new" EV?
I like the concept of what they're proposing but it will depend on the details. If they can get low income families into an EV then this will do something to help both the family and the climate. A large chunk of a families budget goes to travel and vehicle maintenance costs - getting them into an EV could free up $100-$200 a week (depending on where fuel prices go...). It also helps the country move forward to being energy independent so we're not beholden to wars in Europe and the Middle East.

How much of that $35k is the government paying? 10k subsidy
If there is any shortfall, will the government provide a loan to the buyer or will that fall on loan sharks? The balance is leased, I assume as a lease to buy, bit in effect the buyer will pay it off

Ideally, the savings on fuel and repairs will help the lower income families, so even if repayments vs savings was neutral financially, they are in a newer car, and when its paid off, great savings

Obraik

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#2915442 18-May-2022 09:49

tdgeek:

How much of that $35k is the government paying? 10k subsidy
If there is any shortfall, will the government provide a loan to the buyer or will that fall on loan sharks? The balance is leased, I assume as a lease to buy, bit in effect the buyer will pay it off
Ideally, the savings on fuel and repairs will help the lower income families, so even if repayments vs savings was neutral financially, they are in a newer car, and when its paid off, great savings

Where have you seen that $10k value? All articles I've seen have not had that detail.

On top of the fuel saving, there is also the safety aspect of having a newer car. A safer car means less injury/death which helps ACC too and of course, helps the occupants.

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tdgeek

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#2915451 18-May-2022 10:03

Obraik:

Where have you seen that $10k value? All articles I've seen have not had that detail.

On top of the fuel saving, there is also the safety aspect of having a newer car. A safer car means less injury/death which helps ACC too and of course, helps the occupants.

The Transport Minister said they were considering capping the car cost at $35,000 and offering a $10,000 subsidy to allow people to buy an EV or hybrid.

https://www.1news.co.nz/2022/05/16/29b-climate-change-boost-for-evs-waste-emissions-reduction/#:~:text=An%20initial%20trial%20of%20up,for%20scrapping%20their%20old%20car.

Agree, newer car has many benefits, ranging from what you stated, even the emotional satisfaction, and emotional security of avoiding/reducing breakdowns/costly repairs is huge these days for those at lower financial levels

cruxis

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Ultimate Geek

#2915476 18-May-2022 10:45

Well I know whay I might do. Hey nephew/niece/mate you under 75k. Sweet, How about you trade my old car in for me, then buy this EV of me, I will pay for everything. Heres 2k cash in it for you.

Being based on households income is stupid. 75k is way way to low. Why take into account income from the kids part time jobs. It should be on individual income. Just like income tax.

Obraik

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Uber Geek

#2915477 18-May-2022 10:47

cruxis:

Well I know whay I might do. Hey nephew/niece/mate you under 75k. Sweet, How about you trade my old car in for me, then buy this EV of me, I will pay for everything. Heres 2k cash in it for you.

Being based on households income is stupid. 75k is way way to low. Why take into account income from the kids part time jobs. It should be on individual income. Just like income tax.

Sure, anyone can commit fraud I guess.

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MikeAqua

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#2915491 18-May-2022 11:03

Obraik:

Sure, anyone can commit fraud I guess.

It's probably not fraud if the low income buyer buys the old vehicle prior to buying the subsidised new one and then immediately sells the new vehicle.

Sensibly, you'd have some rules around how long you have to have owned the vehicle and also requiring you to repay the $10k if you resell the vehicle within x months.

Side question: To whom and when is the rebate on an imported clean vehicle paid - is it to whomever first registers the vehicle in NZ?

Mike

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Scott3

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#2915513 18-May-2022 11:56

Key thing to note is this sceme is not limited to EV's

"Families who trade in their vehicle will receive support for the purchase of EVs, PHEVs and hybrids."

Given the cira $35k cap (and the reluctance of households earning less than $75k to spend that much on a car), I think it is a fair bet the bet that the vast majority of the car's purchased will be non plug in hybrids (used imports from japan)..

I.e.

Scrap a 2000 Elgrand 3.5L 4x4 (361 grams/km), and get a 2014 estima hybrid 4wd (150g co2 /km)

https://www.trademe.co.nz/a/motors/cars/toyota/estima/listing/3513699653

Or Scrap a 2000 Misti Diamante (cira 13L/100km)+, and get a 2014 Camry hybrid (5.2L/100km).

https://www.trademe.co.nz/a/motors/cars/toyota/camry/listing/3580805122

And of course Aqua, Prius & Feilder hybrid's by the ship load.

In terms of Pure EV's, given current pricing and availability, I think this is going to be limited to a handful of 24kWh & 30kWh leaf's, going into households who either don't travel out of town, or where they have multiple cars (my setup).

Assume when they say "Family", they mean "Household". Little logic in restricting this to family units.

tdgeek:

Dingbatt:

Central Control?

You tell me

It failed last time, overseas auctioneers increased the prices by the rebate. In this new scheme the same will happen, so again, we will transfer 569M from the taxpayers to overseas used car businesses. For new EV's it worked well. Some dropped the price to fit the 80k cap, then the buyer got the rebate, the market worked well then, but it wont for used cars. Not until Japan for one example is awash with used EVs that have reached the age where its not viable to keep them, and we get them. Many for sale, many buyers, a more equitable supply and demand situation

One thing to note is that Japan is awash with used (non plug in hybrids). The aqua has been the top seller for many recent years.

But in terms of EV's, you have hit on a key point. EV's aren't that popular in japan. Combination of reasons for this, but the following are factors:

Recent Nuclear Disaster, and associated power supply issue's (massive rolling blackouts)
Limitations with home charging - I think off street parking is less common in japan, and houses have fairly low capacity power feeds.
Fairly expensive power
Fairly dirty power grid - lots of Natural gas, Coal & Oil.
Widespread availability of efficient hybrids and mini car's
Policies with encourage the buying of new car's, rather than keeping old car's a long time, encouraging cheaper vehicles be purchased.

NZTA tracks EV sales in Japan.

https://www.transport.govt.nz/statistics-and-insights/fleet-statistics/sheet/monthly-ev-statistics

In terms of used import pure EV's, NZ imported:

2017: 2231

2018: 3603

2019: 3499

2020: 2466

These stats are for all markets, but the vast majority of our used EV imports come from Japan. (UK would be the next biggest, But is is only really economical to import nicer, fairly new stuff that is not available in NZ at the moment - I.e. Ford / Mustang Mach-E, and the volume is low)

From the above numbers it is clear that we are currently importing a decent percentage of Japan's used EV's. This is not a source that we can scale by a large amount. Should note that we are far from the only country that buy's used cars from japan.

We could take a bugger chunk, but this requires outbidding other prospective buyers at the auctions, making the cars more expensive. I think the introduction of the clean car rebate in NZ directly kicked up the auction value of used EV's in japan by a couple of thousand.

If we want to encourage more EV's in the NZ fleet, the focus does need to be on new cars, as that is a resource that can scale.

cruxis

481 posts

Ultimate Geek

#2915521 18-May-2022 12:10

MikeAqua:

Obraik:

Sure, anyone can commit fraud I guess.

It's probably not fraud if the low income buyer buys the old vehicle prior to buying the subsidised new one and then immediately sells the new vehicle.

Sensibly, you'd have some rules around how long you have to have owned the vehicle and also requiring you to repay the $10k if you resell the vehicle within x months.

Side question: To whom and when is the rebate on an imported clean vehicle paid - is it to whomever first registers the vehicle in NZ?

Yes, The First Registered Person. Not Owner. Also I needed to upload a copy of the Sale and Purchase agreement to claim as well. Onky took 5 days to get the money in the bank.

surfisup1000

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Uber Geek

#2915526 18-May-2022 12:22

Low income families will be queuing to get their 10k rebate on a 70,000 dollar car.

This emissions policy is a dogs breakfast. It has taken many years and millions of dollars to prepare. Yet, there is very little detail. Despite spending so much money, most of the recommendations are recommendations to investigate further.

I think electric cars are the way of the future, but, introducing them before the technology is ready for mass rollout is foolhardy and irresponsible.

Scott3

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#2915527 18-May-2022 12:25

For comparison the USA Car Allowance Rebate System (Cars) - "cash for clunkers" parameters were as followed:

For Clunker:

Driveable vehicle (I assume this would mean road legal - i.e. WOF and Rego in NZ)
Less than 25 years old
Fuel efficiency worse than 18MPG (13.1L/100km)

For replacement car:

New
22MPG or better (10.7L/100km). USD4,500 coupon.
For light trucks (in the USA, many van's, and SUV's like the subaru outback meet the critra to be considered a light truck), 18MPG or more, US$3,500 coupon if 2 MPG better than the clunker, of US$4,500 better if 5MPG better than clunker.

tdgeek:

Obraik:

Where have you seen that $10k value? All articles I've seen have not had that detail.

On top of the fuel saving, there is also the safety aspect of having a newer car. A safer car means less injury/death which helps ACC too and of course, helps the occupants.

The Transport Minister said they were considering capping the car cost at $35,000 and offering a $10,000 subsidy to allow people to buy an EV or hybrid.

https://www.1news.co.nz/2022/05/16/29b-climate-change-boost-for-evs-waste-emissions-reduction/#:~:text=An%20initial%20trial%20of%20up,for%20scrapping%20their%20old%20car.

Agree, newer car has many benefits, ranging from what you stated, even the emotional satisfaction, and emotional security of avoiding/reducing breakdowns/costly repairs is huge these days for those at lower financial levels

Good find on the $10k value. Frankly that is a lot. Can get an entire 2015 Aqua for that. Below one is listed for $9475 +ORC, less approx $1670 clean car rebate.

https://www.trademe.co.nz/a/motors/cars/toyota/aqua/listing/3585510080

Each of my two cars (Hybrid SUV, and 24kWh Nissan Leaf) were $12,500.....

Should note that many of the cheap hybrids Ex-japan (i.e. low spec aqua), do have fairly weak safety and security spec. Features like side airbags are rare. But at least they all have ABS, and Electronic Stability control. Some lack immobilizers, means they can be started with a screwdriver.

Means somebody eligible scrapping something like a mitsubishi diamante, the zero cost upgrade to an Aqua is going to have massive benefits as you say. The Aqua is going to be much cheaper to maintain (less spark plugs, smaller tires), and use 1/3rd the fuel, and be much more reliable to boot.

Big question remaining is what the Min fuel consumption to qualify for scrapping is.

Scott3

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#2915547 18-May-2022 12:58

If the trial (2500 cars) runs for a year, then the bulk of the half billion dollars isn't going to start to be spent until the second half of 2023.

Kinda torn by this.

On one hand swapping out cars burning 10L/100km+ for Toyota hybrids burning roughly half that is an environmental win, and a win for the households in question.

On the other hand, it's only 12 years out from the UK's ban on sale of all cars with combustion engine cars, and we are actively subsidizing combustion engine car purchases...

I am a bit dubious about general taxation money being spent on subsidizing private motoring for a start (given the goal to reduce km't traveled by 20%) - that seems to directly clash.

But if we must have motoring subsidies, at least make them for zero emissions car's.

Personally think a massive government order for 10k + each of the following would be the play:

A Pure EV economy small hatchback (Something like a VW e-up)
A 5 seater cheaper family style car (Something like the MG5 EV, or BYD E6)
A 7 / 8 /9 seater EV van or MPV (Something like Citroen e-SpaceTourer/ Peugeot e-Traveller/ Vauxhall Vivaro-e Life)

Then combine with some kind of social Lease or finance program.

And of course we need to tackle the low hanging fruit of Government fleet vehicles too. And close the loophole where one can import a 20+ year old Hiace or landcruiser, and dodge modern emission standards and the clean car fee.

richms

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#2915550 18-May-2022 13:02

Is there anything in this to stop me from right now going out and buying a heavy fuel using cheap piece of crap that I dont care about and then cashing it in when this is up and running? Seems a great way to get a vehicle to use for a while and be paid for it too.

Richard rich.ms

gzt

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#2915552 18-May-2022 13:04

Brand new Toyota Yaris Hybrid could be the big winner in this. Very low maint and very low fuel consumption.

gzt

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#2915555 18-May-2022 13:20

The part about swapping for public transport and ebikes is interesting. At one time I would have happily swapped my car for an ebike. I cycled most days and used the car only for overtime to manage long hours fatigue. An ebike would have fixed that. The e
bike options were all somewhat custom and a little too expensive in those days

A missing feature might be a few trips with casual e-car use like citycar etc. I suspect a lot more people would dump vehicles with experience of those services, in turn allowing expansion.

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