RUCs to apply to all vehicles (incl EVs), replacing road user tax on petrol

Forums › Transport (cars, bikes and boats) › RUCs to apply to all vehicles (incl EVs), replacing road user tax on petrol

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309 posts

Ultimate Geek

#3138186 3-Oct-2023 11:14

BlakJak:

I think there's plenty of HEV owners out there who would argue that the maintenance obligations in that situation are not substantially more than those of a pure EV.

I think the whole argument for/against is pointless, as everyone's situation is different, but this bit about costs is REALLY incorrect. The servicing on a BEV is substantially less than an ICE or PHEV, that is just fact.

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cddt

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Ultimate Geek

#3138189 3-Oct-2023 11:20

GV27:

If you're driving your family around you're not likely to be doing Bathurst-length co-driving stints which would mean you can't stop for a half hour charge somewhere. I might have done that in my 20s but not anymore.

Unfortunately my kids don't coordinate their toilet requirements with the availability of EV chargers. The last two times we've tried to leave Auckland we have had to suddenly and with extreme urgency get off the motorway at Manurewa to pee on the first berm we could find.

SaltyNZ

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#3138191 3-Oct-2023 11:26

cddt:

GV27:

If you're driving your family around you're not likely to be doing Bathurst-length co-driving stints which would mean you can't stop for a half hour charge somewhere. I might have done that in my 20s but not anymore.

Unfortunately my kids don't coordinate their toilet requirements with the availability of EV chargers. The last two times we've tried to leave Auckland we have had to suddenly and with extreme urgency get off the motorway at Manurewa to pee on the first berm we could find.

Sounds like they're not coordinated with petrol stations either then, so it's a wash either way.

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MikeAqua

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#3138212 3-Oct-2023 12:34

smac:

I think the whole argument for/against is pointless, as everyone's situation is different, but this bit about costs is REALLY incorrect. The servicing on a BEV is substantially less than an ICE or PHEV, that is just fact.

The biggest costs of vehicle ownership are depreciation and (where applicable) finance. EVs cost more to buy so the number being financed or depreciated is higher.

IRD provides guidance on depreciation and operation costs (for reimbursement purposes) of vehicles. I think IRD can reasonably be seen as non-partisan when it comes to EVs vs ICEs. While they have a specific rate for animal-drawn vehicles (seriously, they actually do) IRD have not deemed it necessary to differentiate between ICE and EV for depreciation purposes. IRD also stipulate the same mileage rate for ICEs and EVs for the first 14,000km. I assume this is all based on professional servicing.

The conclusion then is that under 14,000km it makes no difference.

Mike

smac

309 posts

Ultimate Geek

#3138227 3-Oct-2023 13:04

MikeAqua:

The biggest costs of vehicle ownership are depreciation and (where applicable) finance. EVs cost more to buy so the number being financed or depreciated is higher.

IRD provides guidance on depreciation and operation costs (for reimbursement purposes) of vehicles. I think IRD can reasonably be seen as non-partisan when it comes to EVs vs ICEs. While they have a specific rate for animal-drawn vehicles (seriously, they actually do) IRD have not deemed it necessary to differentiate between ICE and EV for depreciation purposes. IRD also stipulate the same mileage rate for ICEs and EVs for the first 14,000km. I assume this is all based on professional servicing.

The conclusion then is that under 14,000km it makes no difference.

I think making assumptions on why IRD do or don't do anything is fraught with danger! 😆

I operate both a 2013 Leaf and an FG Falcon. Regular service items on the Leaf are.....nothing. In the longer term I guess add in brakes, tyres and suspension.

But for the Falcon we're talking a twice yearly oil and service at about $350 a shot, and cooling system every couple years, transmission at 40k. Some might consider that a negligible difference, but I guess I'm not loaded. When I bought the Leaf 3 years ago the cost of 'fuel' for my commute was 20% compared to the Falcon, now it will be even less as petrol has hiked far more than electricity.

So the fact IRD doesn't differentiate in it's reimbursement rates I think means they're lazy, or changing the rules is too hard, rather than them deeming the operating costs the same. But that's an assumption on my part 😋

Ge0rge

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#3138229 3-Oct-2023 13:15

Isn't there an oil change to be done on a Leaf?

SaltyNZ

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#3138230 3-Oct-2023 13:19

Ge0rge: Isn't there an oil change to be done on a Leaf?

I've seen some people in cold climates change out the transmission fluid in the fixed reduction gear case. But I never did it in 150,000km in our Leaf.

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PolicyGuy

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#3138231 3-Oct-2023 13:22

MikeAqua:

The biggest costs of vehicle ownership are depreciation and (where applicable) finance. EVs cost more to buy so the number being financed or depreciated is higher.

IRD provides guidance on depreciation and operation costs (for reimbursement purposes) of vehicles. I think IRD can reasonably be seen as non-partisan when it comes to EVs vs ICEs. While they have a specific rate for animal-drawn vehicles (seriously, they actually do) IRD have not deemed it necessary to differentiate between ICE and EV for depreciation purposes. IRD also stipulate the same mileage rate for ICEs and EVs for the first 14,000km. I assume this is all based on professional servicing.

The conclusion then is that under 14,000km it makes no difference.

The IRD reimbursement rates are elated to the annual distance driven, so they actually stipulate the same mileage rate for ICEs and EVs for the first 14,000km driven per year. I am not a Tax Accountant, but I would guess that the high rate for the first 14,000km p.a. is to allow for the recovery of the fixed costs of owning the vehicle - including depreciation, registration & insurance.
The reimbursement rates over 14,000km p.a. for BEVs are less than a third of those for fossil cars*, which will represent the lower running and servicing costs for a BEV.

Why would IRD treat BEVs and fossil/ICE cars the same for depreciation?
Perhaps because BEVs - particularly new BEVs - haven't been around long enough and in sufficient numbers to allow IRD to make a judgement on whether they warrant different treatment.
Possibly it's a deliberate policy to advantage BEVs: if BEVs in reality depreciate more slowly than fossil cars then allowing them to be depreciated for tax purposes faster than that generates a benefit to the owning company.
And maybe IRD just hasn't got around to looking at it, as they might consider it pretty irrelevant when new BEVs are so far a tiny proportion of the market.

* BEV 10c/km, Hybrid 18c/km, ICE 31c/km

MikeAqua

7616 posts

Uber Geek

#3138288 3-Oct-2023 14:11

PolicyGuy:

The IRD reimbursement rates are elated to the annual distance driven, so they actually stipulate the same mileage rate for ICEs and EVs for the first 14,000km driven per year. I am not a Tax Accountant, but I would guess that the high rate for the first 14,000km p.a. is to allow for the recovery of the fixed costs of owning the vehicle - including depreciation, registration & insurance.
The reimbursement rates over 14,000km p.a. for BEVs are less than a third of those for fossil cars*, which will represent the lower running and servicing costs for a BEV.

Why would IRD treat BEVs and fossil/ICE cars the same for depreciation?
Perhaps because BEVs - particularly new BEVs - haven't been around long enough and in sufficient numbers to allow IRD to make a judgement on whether they warrant different treatment.
Possibly it's a deliberate policy to advantage BEVs: if BEVs in reality depreciate more slowly than fossil cars then allowing them to be depreciated for tax purposes faster than that generates a benefit to the owning company.
And maybe IRD just hasn't got around to looking at it, as they might consider it pretty irrelevant when new BEVs are so far a tiny proportion of the market.

* BEV 10c/km, Hybrid 18c/km, ICE 31c/km

I suspect they have looked into it. Last time I checked they weren't differentiating at all. Unless they just made up some numbers. I mean they are govt, so that is possible.

Mike

evilengineer

441 posts

Ultimate Geek

#3138292 3-Oct-2023 14:29

And what about the congestion charging National are talking about as a replacement for the regional fuel tax?

Is that part of their RUC for all proposal or something separate?

Does that mean variable pricing and a GPS tracker in every car or the widespread deployment of number plate recognition cameras to log cars or what?

Either way, plenty of privacy implications and a great way to get people riled up. Not to mention a massive IT project that will take years to deliver and probably be another disaster waiting to happen.

I reckon they'll end up just including EVs in the current RUC scheme (you know, bashing Tesla drivers being popular with the base etc.) and then it will all grind to a halt.

As sixteen pages of thread demonstrates, there's plenty of devil in the detail type stuff to work through. And that's just RUCs, never mind RUCS + congestion charging.

It'll all just end up in the too hard basket.

mattwnz

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#3138359 3-Oct-2023 16:20

evilengineer:

And what about the congestion charging National are talking about as a replacement for the regional fuel tax?

Is that part of their RUC for all proposal or something separate?

Does that mean variable pricing and a GPS tracker in every car or the widespread deployment of number plate recognition cameras to log cars or what?

Either way, plenty of privacy implications and a great way to get people riled up. Not to mention a massive IT project that will take years to deliver and probably be another disaster waiting to happen.

I reckon they'll end up just including EVs in the current RUC scheme (you know, bashing Tesla drivers being popular with the base etc.) and then it will all grind to a halt.

As sixteen pages of thread demonstrates, there's plenty of devil in the detail type stuff to work through. And that's just RUCs, never mind RUCS + congestion charging.

It'll all just end up in the too hard basket.

IMO EVs have to start paying to use the roads ASAP and overtime more and more cars will be standalone EVs, so makes sense to use the current RUC system. I really can't understand why they haven't been up to now, especially as the purchase price had been subsidised. The issue is plugin hybrids that could operate 90% on electricity. Also you have normal hybrids that can use far less fuel, and therefore pay less in tax. Although that has always been the case, as smaller vehicles with small engines have always used far more petrol than large cars, so pay less in tax, even though they are using the same roads.

mattwnz

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#3138362 3-Oct-2023 16:31

Azzura:

Another option is to maintain the current RUC system and expand its application to include EVs and other vehicles. However, it may be worthwhile to remove the carbon tax on fuels and instead implement an emissions charge that is integrated into the RUC structure based on the specific type of vehicle engine.

This is why I really don't understand Nationals reasoning for getting rid of the subsides and levies, as it helps with NZs emissions obligations.

tdgeek

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#3138400 3-Oct-2023 18:57

mattwnz:

This is why I really don't understand Nationals reasoning for getting rid of the subsides and levies, as it helps with NZs emissions obligations.

I could be wrong but wasnt that the plan anyway? Date wise and National/Labour wise? EV's are down in price, fossil fuels are up in price (not that they could foresee that) but you cant have the subsidy forever

mattwnz

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#3138461 3-Oct-2023 21:00

Yes, but the date seems to have kept being kicked down the road, and there was the suggestion that it could occur again.

SaltyNZ

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#3138540 4-Oct-2023 06:38

tdgeek:

I could be wrong but wasnt that the plan anyway? Date wise and National/Labour wise? EV's are down in price, fossil fuels are up in price (not that they could foresee that) but you cant have the subsidy forever

Yes, it was always going to go away at some point, but we aren't at that point yet. You've still got people - even in this thread - going on about how EVs are useless because they don't have enough range or whatever, and they are still more expensive than ICE. It's borderline even with the rebate.

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