Car Talk - Big blow for hybrids.

By Jack Biddle.

Recent changes to the Clean Car Discount scheme

Early this year, Toyota New Zealand (TNZ) was awarded the most trusted automotive brand in the country for the eighteenth year in a row at the Readers Digests Annual Trusted Brands Awards ceremony. Along the way, their Signature Class-branded used cars also picked up the used car award for the fifth year in a row.

TNZ Chief Executive, Neeraj Lala, said at the time that trust was a unique and complex component of the Toyota brand. Well, that trust will certainly be put to the test with the Government’s recent announcement to change the way the Clean Car Discount (CCD) scheme is calculated as Toyota is one of the hardest hit.

The CCD changes which come into effect on 1 July include the following:

· Light passenger vehicle rebates will only apply to those emitting less than 100g carbon dioxide (CO2) per kilometre. Currently it is set at 146g/km which will exclude the majority of popular hybrids from qualifying for a rebate.

· The rebate for used Battery Electric Vehicles (BEVs) will rise slightly ($3,450 to $3,507).

· The maximum rebate for new BEVs will reduce from $8,625 to $7,015.

· The maximum fee for vehicles with very high emissions will rise from $5,175 to $6,900 for new vehicles and from $2,875 to $3,450 for used imports.

The reason for the changes is because the Government originally intended for the CCD scheme to be self-funding. In other words, they would receive in fees an equal amount of dollars back into the coffers to what they would pay out in rebates. However, they are claiming the scheme to be so successful due to the uptake of the rebates, it now requires a top up of an extra $100 million to ensure it is financially sustainable.

According to the National Party’s transport spokesperson Simeon Brown, whose party opposes the scheme, a total of $83 million has been handed out to Tesla owners alone by way of the rebate scheme since it began in July 2021.

Many opponents of the scheme are claiming it has had a reverse “Robin Hood” affect that effectively gives to the wealthy and penalises the hard-working average Kiwi individual or family.

With the handout given to the likes of the Tesla owners to date, it’s an argument the current Government are obviously prepared to accept in their efforts to build a low emission, climate resilient future.

Let’s not forget also that the fully electric vehicles like the Tesla are still currently getting a free ride on our roads because they pay no road user chargers.

So, in light of this recent announcement from the beehive, many TNZ customers are bound to receive a, “we have some good news and not so good news” call, from sales staff across the country.

The good news will be that their long-awaited brand-new hybrid car or diesel ute has finally landed in the country and being prepared for handover, while the not so good news will be the Governments Clean Car Discount rebate may no longer apply or be less than expected or there is an increase in fees to be paid.

TNZ has over many years been the champion of hybrid technology which allows for a reduction in tail pipe emissions by combining an internal combustion engine with an electric motor. They have promoted hybrid vehicles as being the perfect transition to fully electrified vehicles over time, and an affordable option while also eliminating range anxiety issues that many consumers still have with fully electric vehicles.

Hybrids are simply get-in-and-go vehicles that self-charge while being driven which is also a big factor in their popularity.

The announced changes to the CCD scheme have saddened Toyota New Zealand due to the potential for it to affect the affordability of low emission vehicle technology for customers. “Many of our customers have placed orders in good faith for both high and low emission vehicles with a clear idea of what the rebate or fee will be as part of their affordability decision,” says Mr Lala, CEO. “As a brand, we hold the relationship with our customers at the heart of what we do. Many have waited extended periods for their vehicles due to us not being able to supply them fast enough and will now be penalised by either reduction of rebate or increase in fee with very little notice. Unfortunately, the Clean Car Discount scheme is a relationship between the New Zealand Government and the consumer, but ultimately this decision impacts their relationship with our brand.”

The other concern by many is the bigger burden sectors such as agriculture, forestry and construction have to carry by the announcement the CCD fees will be increasing when there are no other suitable low emission options currently available.

As far as hybrids go, it seems they are like the sports star whom the selectors have decided is past their best. “Thanks for the contribution but it’s time to move on,” seems to be the message from the Government in regard to supporting hybrid technology moving forward.

For many, hybrid technology is still well worth consideration if consumers are looking at affordable options that help reduce tail pipe emissions and fuel costs regardless of whether they lose the CCD rebate.

TNZ will no doubt refocus on how to maintain that consumer trust which has been such a huge factor in its success in NZ and around the globe for many years. Same goes for all other new vehicle distributors who do not have a BEV currently in their showroom and have sold their vehicles including hybrids with the CCD rebate as an extra incentive to get consumers across the line.

So, is the current Government aiming too high and prepared to continue to shell out millions of dollars to many of those who hardly need a reasonably large handout to help purchase a fully electric car?

I think I know what Robin Hood would have to say.

Caption: The popular Toyota RAV4 Hybrid is one of many hybrids that will not receive the CCD.