NZ Government Incentives Coming Soon For Buyers of Electric Vehicles!

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3885 posts

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# 2234138 9-May-2019 21:47

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Obraik:

We could add an emissions tax to the purchase of new ICE vehicles (not second hand) to counter what is lost from selling EVs.

Except that would make people hold onto their existing ICE cars for longer. Especially for use cases such as Utes, where no EV version yet exists. Then you would also need to apply it to used imports as well, due to how many of them arrive in NZ.

And it would be unlikely to get the type of people who currently buy new or near new little hatchbacks, to instead buy EVs. If your use case can be met by a an ICE hatchback, It is highly likely that an EV would also be a good fit for your use case.

ockel

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# 2234143 9-May-2019 21:52

GV27:

ockel:

GV27:

gzt: This was a good discussion on RNZ a few days prior:

https://www.radionz.co.nz/national/programmes/ninetonoon/audio/2018694075/what-happened-to-ev-incentives

..making similar points as all the above.

However - no one mentioned the current "Ute" tax break. Someone needs to figure out how to redirect that so people who would have bought a car if not for that break can decide to go electric instead. It's pretty clear many many people are purchasing Ute just because the tax treatment is given without question. Maybe it's unfixable in that sense and someone should make a 'goods rack' to put in the boot of any car for tax purposes lol. Short story fbt treatment for electric fleet should probably apply to all electric business purpose as well to reach petrol equiv.

There is no 'tax break' on utes; there's no specific IRD policy which says utes are exempt. In fact under the new FBT rules, you can elect for any vehicle to sit outside the FBT regime for any close company in NZ; from memory this is a maximum of two vehicles per company but it's been a while I last brushed up on FBT.

Can you provide a link to the new FBT rules? The IRD is still listing the FBT exemption for vehicles as:

"The exclusive design of the vehicle must be to carry goods, or goods and passengers equally. If the vehicle is designed mainly to carry passengers, it won’t meet this requirement."

Which still excludes cars as a vehicles that may be classified as FBT exempt.

That's one of four conditions that have to be met. It's not just 'all utes are exempt'.

This has been updated recently; the good stuff about the other options for FBT and exemptions are on p10.

https://www.classic.ird.govt.nz/resources/f/a/fab9c941-c8b0-47c7-b7ee-40f4c25035b5/IR409+Mar19.pdf

So nothing has really changed. And the advice that I received to provide a work vehicle with appropriate signage that might occasionally carry something in the tray still exempts me from FBT remains correct despite the fact a passenger vehicle with a decent boot would suffice.

Obraik

477 posts

Ultimate Geek

# 2234145 9-May-2019 21:59

Aredwood:
Obraik:

We could add an emissions tax to the purchase of new ICE vehicles (not second hand) to counter what is lost from selling EVs.

Except that would make people hold onto their existing ICE cars for longer. Especially for use cases such as Utes, where no EV version yet exists. Then you would also need to apply it to used imports as well, due to how many of them arrive in NZ.

And it would be unlikely to get the type of people who currently buy new or near new little hatchbacks, to instead buy EVs. If your use case can be met by a an ICE hatchback, It is highly likely that an EV would also be a good fit for your use case.

You're assuming people are against owning an EV. Most people buying a car don't really care what powers their car, as long as it gets them from a to b, which for most is from home to work and back. If some people hold on to their cars rather than buying new ICE vehicles then that's at least keeping new ICE vehicles from entering the fleet. Yeah, in my scenario imports would need to be included in the tax too.

frankv

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# 2234234 10-May-2019 08:44

wellygary:

Aredwood: Fully agree with regards to hydro. But the greens dont want to do that, because they are on the record as campaigning against large hydro generation projects. (lookup project Aqua during the Helen Clark Labour / greens government)

Campaigning against Hydro and Dams in general is at the core of the green party, Their predecessor the Values Party were formed on the back of the "Save Manapouri" movement.

In recent times they have opposed Mokihinui, Waimea, Ruataniwha and the list goes on.

This is misleading... the Greens party, and the Values party before them, campaigned FOR the environment. Whilst hydro-electric dams do provide renewable and clean (in the sense of non-polluting) energy, they do also have negative and often irreversible environmental consequences.

Ruataniwha, incidentally, is not a hydro-electric scheme, it is an irrigation scheme.

Dingbatt

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# 2234261 10-May-2019 09:11

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Obraik:
We could add an emissions tax to the purchase of new ICE vehicles (not second hand) to counter what is lost from selling EVs.

Why not put said tax on the fuel instead? If you are trying to curb emissions then this drives demand for more efficient vehicles, and as newer vehicles tend to be more efficient and safer, these will feed into the used chain.
The loss of revenue argument is a nonsense. Anything the government does in this sphere affects revenue. It will be a conscious decision to commit taxpayer funds to it.

Areas of Geek interest: Home Theatre, HTPC, Android Tablets & Phones, iProducts.

tdgeek

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# 2234283 10-May-2019 09:20

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Dingbatt:
Obraik:
We could add an emissions tax to the purchase of new ICE vehicles (not second hand) to counter what is lost from selling EVs.

Why not put said tax on the fuel instead? If you are trying to curb emissions then this drives demand for more efficient vehicles, and as newer vehicles tend to be more efficient and safer, these will feed into the used chain.
The loss of revenue argument is a nonsense. Anything the government does in this sphere affects revenue. It will be a conscious decision to commit taxpayer funds to it.

Only if you give cash away. Businesses, who will also feed used cars back to the market a lot quicker, can have instant 100% depreciation given and instant GST refunds, to give them a cashflow benefit. That doesn't cost the Govt funds, it just feeds it back to the business quicker. Add to that fuel savings, that is incentive enough IMHO. A minimal effect on Govt funding, a quicker feedback of used EV's to the consumer used market.

wellygary

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# 2234295 10-May-2019 09:24

Dingbatt:
Obraik:
We could add an emissions tax to the purchase of new ICE vehicles (not second hand) to counter what is lost from selling EVs.

Why not put said tax on the fuel instead? If you are trying to curb emissions then this drives demand for more efficient vehicles, and as newer vehicles tend to be more efficient and safer, these will feed into the used chain.
The loss of revenue argument is a nonsense. Anything the government does in this sphere affects revenue. It will be a conscious decision to commit taxpayer funds to it.

The ETS already applies to liquid fuels , the ETS price for Carbon is currently $25/tonne, (around 6c/litre)

FWIW: The regulatory impact assessment in the Zero Carbon bill ( released Wednesday) estimates that to get to Zero CO2, the ETS price needs to get to over $1000/tonne, - so that's an extra $2.40 per litre

NzBeagle

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# 2234297 10-May-2019 09:25

tdgeek:

Dingbatt:
Obraik:
We could add an emissions tax to the purchase of new ICE vehicles (not second hand) to counter what is lost from selling EVs.

Why not put said tax on the fuel instead? If you are trying to curb emissions then this drives demand for more efficient vehicles, and as newer vehicles tend to be more efficient and safer, these will feed into the used chain.
The loss of revenue argument is a nonsense. Anything the government does in this sphere affects revenue. It will be a conscious decision to commit taxpayer funds to it.

Only if you give cash away. Businesses, who will also feed used cars back to the market a lot quicker, can have instant 100% depreciation given and instant GST refunds, to give them a cashflow benefit. That doesn't cost the Govt funds, it just feeds it back to the business quicker. Add to that fuel savings, that is incentive enough IMHO. A minimal effect on Govt funding, a quicker feedback of used EV's to the consumer used market.

The number of businesses I see branding up EVs at the moment, I think they're mobilising for their own targets, which will drive demand. Example that the Kona has a wait-list at the moment is proof of that. EECA is an effective incentive for the drive in demand for Electric Vehicles. An increasing number of branded electric vans and cars on the road.

tdgeek

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# 2234303 10-May-2019 09:29

NzBeagle:

The number of businesses I see branding up EVs at the moment, I think they're mobilising for their own targets, which will drive demand. Example that the Kona has a wait-list at the moment is proof of that. EECA is an effective incentive for the drive in demand for Electric Vehicles. An increasing number of branded electric vans and cars on the road.

Good to know, and not surprising. Cost savings will drive that investment. If they are already mobilising, then probably no need to incentivise that. In 3 years time, those vehicles will hit the used car market at a much more consumer affordable price, and 3 years later, the new business replacements will go back to the consumer market

NzBeagle

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# 2234312 10-May-2019 09:39

tdgeek:

Good to know, and not surprising. Cost savings will drive that investment. If they are already mobilising, then probably no need to incentivise that. In 3 years time, those vehicles will hit the used car market at a much more consumer affordable price, and 3 years later, the new business replacements will go back to the consumer market

Cost Savings
Environmental Benefits
Carbon Targets
Green Washing

Obraik

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# 2234338 10-May-2019 10:03

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Dingbatt:
Obraik:
We could add an emissions tax to the purchase of new ICE vehicles (not second hand) to counter what is lost from selling EVs.

Why not put said tax on the fuel instead? If you are trying to curb emissions then this drives demand for more efficient vehicles, and as newer vehicles tend to be more efficient and safer, these will feed into the used chain.
The loss of revenue argument is a nonsense. Anything the government does in this sphere affects revenue. It will be a conscious decision to commit taxpayer funds to it.

I think increasing the taxes on fuels should be a late game strategy, when there are plenty of affordable second hand EVs. If you tax the fuel you start making life more difficult for low income earners that are already struggling - they're in no position right now to buy a new EV instead so you're only punishing them. Putting the tax on new or new to NZ vehicles funds the program from a source that could choose to change their ways and avoid the tax.

tdgeek

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# 2234351 10-May-2019 10:19

Obraik:

I think increasing the taxes on fuels should be a late game strategy, when there are plenty of affordable second hand EVs. If you tax the fuel you start making life more difficult for low income earners that are already struggling - they're in no position right now to buy a new EV instead so you're only punishing them. Putting the tax on new or new to NZ vehicles funds the program from a source that could choose to change their ways and avoid the tax.

Thats a good idea, tax those that can choose ICE or EV. There will be some that want an EV but the use case cannot manage it, but you cant please everyone

As you imply, the premium on new EV reduces with the tax on new ICE, and makes imported ICE less viable to bring in. New ICE or 3yo EV? That might be quite close.

Yeah, good plan

Aredwood

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# 2234358 10-May-2019 10:26

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frankv:
wellygary:

Aredwood: Fully agree with regards to hydro. But the greens dont want to do that, because they are on the record as campaigning against large hydro generation projects. (lookup project Aqua during the Helen Clark Labour / greens government)

Campaigning against Hydro and Dams in general is at the core of the green party, Their predecessor the Values Party were formed on the back of the "Save Manapouri" movement.

In recent times they have opposed Mokihinui, Waimea, Ruataniwha and the list goes on.

This is misleading... the Greens party, and the Values party before them, campaigned FOR the environment. Whilst hydro-electric dams do provide renewable and clean (in the sense of non-polluting) energy, they do also have negative and often irreversible environmental consequences.

Ruataniwha, incidentally, is not a hydro-electric scheme, it is an irrigation scheme.

Burning coal and other fossil fuels also has negative and often irreversible
consequences as well. Virtually all of the negative effects of building a hydro dam are only one off effects related to its construction. While the avoided carbon emissions from no longer needing to burn fossil fuels are only rarely considered when deciding whether to build a hydro dam. Same thing in relation to the environmental impact of coal mining.

Artificially expensive electricity prices caused by failure to build more hydro, also have negative consequences. Especially for low income people.

And no large western country has successfully run a power grid using mostly solar and wind power. Germany has come the closest. But their grid is still only 25% or so renewable over a whole year. While NZ is 82% or so over a whole year.

There are some tiny island power networks that are solar based. But the economics only work for them because they previously used diesel for power.

If hydro dams are so bad. Why isn't the Green party demanding that the existing dams be demolished?

GV27

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# 2234395 10-May-2019 11:09

ockel:

So nothing has really changed. And the advice that I received to provide a work vehicle with appropriate signage that might occasionally carry something in the tray still exempts me from FBT remains correct despite the fact a passenger vehicle with a decent boot would suffice.

That's not really what the checklist says but OK.

frankv

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# 2234439 10-May-2019 12:44

Aredwood:
frankv:

This is misleading... the Greens party, and the Values party before them, campaigned FOR the environment. Whilst hydro-electric dams do provide renewable and clean (in the sense of non-polluting) energy, they do also have negative and often irreversible environmental consequences.

Ruataniwha, incidentally, is not a hydro-electric scheme, it is an irrigation scheme.

Burning coal and other fossil fuels also has negative and often irreversible consequences as well.

I agree, and I'm sure the Greens agree too.

Virtually all of the negative effects of building a hydro dam are only one off effects related to its construction.

Not true. As an example, one of the consequences of the Tongariro hydro scheme has been reduced flow in the Whanganui River. That in turn has raised the water temperature, and changed the whole ecology of the river.

Artificially expensive electricity prices caused by failure to build more hydro, also have negative consequences. Especially for low income people.

Artificially cheap electricity prices, which don't take into account the real costs of a dam, are also bad.

And no large western country has successfully run a power grid using mostly solar and wind power.

I'm not aware of any large country, western or otherwise, which has set this as a goal, let alone attempted it. So it's not surprising that none have achieved it.

If hydro dams are so bad. Why isn't the Green party demanding that the existing dams be demolished?

I don't know. Presumably because the damage has already been done.

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