New Zealand to end road tax exemption for EVs

New Zealand is ending an exemption from road tax for owners of BEVs and plug-in hybrids from 1 April.

From that date owners of light EVs will have to pay road user charges (RUC) of NZ $76 (US $47) per 1000 kilometres driven — the same as ICE vehicles.

“The previous national government exempted EVs from paying RUC to encourage their uptake. This exemption was always intended to end when EVs hit around 2pc of the light vehicle fleet and we are now at that point," says transport minister Simeon Brown.

The government will allow a two-month transition period to allow time for people to get registered in the RUC system without being penalised for unpaid RUCs.

EV owners will give an odometer reading when buying their RUC license. A vehicle’s odometer will be reviewed whenever a warrant of fitness is undertaken, and an invoice issued for the difference.

Owners of plug-in hybrid vehicles will pay a reduced rate of NZ$53/'000km ($ 33/'000km) so that they are not double taxed, as they are also required to pay fuel excise duty.

New Zealand also ended its rebate scheme for EV purchasers — known as the clean car discount (CCD) — at the end of December 2023, citing concerns about the scheme's cost.

The CCD programme began in July 2021 and offered rebates of up to NZ$7,015 for EVs, alongside penalties for more polluting vehicles.

EV sales spiked as consumers rushed to take advantage of the discount, reaching 50pc of all vehicle sales in December, according to consumer website evdb.nz.

But research by EV industry body Drive Electric finds that removing the CCD could lead to between 100,000 and 350,000 fewer EVs in New Zealand by 2030, hampering the nation's progress towards its adoption targets.

New Zealand has a target for 50pc of all light vehicle registrations to be EVs by 2029 and 100pc by 2035.

At the end of last year New Zealand's National Party, ACT New Zealand Party and New Zealand First Friday Party signed a coalition agreement to form a new government, with centre-right National Party leader Christopher Luxon becoming prime minister.