Our 2023 election manifesto calls on political parties to push forward with more bold policies for the decarbonisation of transport. While EV registrations have picked up dramatically, they still only comprise less than 2 per cent of the fleet. There’s much more to be done.
Here’s our stance on EV policy in New Zealand, with the upcoming election in mind.
ABOUT DRIVE ELECTRIC
Drive Electric is New Zealand’s leading, apolitical, not-for-profit organisation focussed on accelerating the uptake of e-mobility in New Zealand. In existence since 2011, we have more than 70 members representing the electric mobility ecosystem. Members represent electricity generators and retailers; network businesses; auto distributors; fleet companies; charging providers; financial services; information technology companies; and other related businesses.
This paper sets out our members’ views on important issues for political parties to consider when developing policy relating to the electrification and decarbonisation of transport.
CONTEXT: E-MOBILITY WILL TRANSFORM HOW WE GET AROUND
Transport is on the cusp of the biggest transformation since the arrival of the motor vehicle. We have an opportunity in New Zealand to adopt new technologies and approaches in e-mobility to create a more productive, resilient, and sustainable country.
The world’s carmakers are committed to an electric future, with many of the majors signalling dates by which they will only produce electric vehicles. A number of the world’s largest car markets have also committed to ending the sale of new fossil fuel vehicles, including the European Union and the UK.
In 2021, a global Declaration on Accelerating the Transition to 100% Zero Emission Cars and Vans was launched, which targeted new cars and vans being zero emissions globally by 2040, and by no later than 2035 in leading markets. So far 40 countries, including New Zealand, and 14 automotive companies have signed the declaration.
E-mobility is providing new transport solutions for people and freight, beyond light vehicles, through e-bikes, e-scooters, buses, commercial vehicles, and ferries. Additionally, e-mobility will increasingly become a service, through carshare and rideshare options.
New Zealand can position itself to take advantage of this technology with smart policy. The change is coming, the real question is the extent to which we want to embrace it and begin to reap the benefits.
E-mobility in all its forms can provide New Zealand:
- Significant emissions reductions (transport is circa 17% of emissions depending on the year);
- Improved air quality and associated health benefits;
- Decreased household outgoings on energy;
- National energy resilience through independence from fossil fuels;
- Productivity improvements through better fleet utilisation and decreased congestion; and
- Reduced expenditure on fossil fuels (circa $9b per annum)
We have already begun. In 2022 plug-in vehicles comprised almost 11% of all light vehicle sales, significantly up year on year.1 This is a significant uplift, but much more needs to be done to support e-mobility in New Zealand if we are to achieve a net-zero economy by 2050.
DRIVE ELECTRIC PRIORITIES
When forming their climate, transport, and e-mobility policies we ask that political parties consider the following four priorities. We provide high-level overviews of each of these priorities and are open to engaging in detail around these with political parties.
1. LONG-TERM THINKING AND CERTAINTY
The Climate Change Response (Zero Carbon) Act was agreed with bipartisan support in 2019. It set net-zero targets; established the Climate Change Commission; and established the mechanisms for preparing emissions budgets and emissions reductions plans. The Drive Electric membership supports the institutional framework established by the Act, and believes that New Zealand will benefit from the certainty of maintaining this piece of legislation and its key provisions.
We also note that investment in infrastructure; adopting new transport technologies; and climate change are all long-term issues. As such, our membership encourages bipartisanship on climate change policy, where possible, as it creates certainty for business and citizens. We also strongly encourage the next Government to work with business in partnership on relevant policy.
Recommendations:
1.1 Embed the Climate Change Response (Zero Carbon) Act and continue its implementation through the development of Emissions Reduction Plan II.
1.2 Strive for bipartisanship agreement where possible in long-term policy areas such as infrastructure investment; e-mobility policy; and climate change resilience.
2. ACCELERATE PUBLIC AND PRIVATE CHARGING
Drive Electric has consistently called for a National Public and Private EV Charging Strategy. The Ministry of Transport is currently consulting on a draft. The Strategy must recognise that the government has an essential role in creating the conditions in which a consumer-focussed market can be created, and addressing market failures. Business has the role of delivering that competitive market and providing the services to consumers.
This strategy must also fundamentally recognise that the EV charging is dependent on the electricity sector, in terms of generation and distribution. New Zealand must have an energy strategy in place that creates the conditions by which there can be greater investment in renewable energy; and improved transmission and distribution. This must happen at pace.
The National EV Charging Strategy strategy must articulate the overarching objectives as well as the specific roles of business, government and local councils. It must consider, amongst other things:
- The connection between transport and electricity ecosystems (generation, networks, connection, cost, use)
- Supporting the uptake of smart at home charging
- Accelerating the roll-out of public charging
- Interoperability of public charging
- Standards (and oversight) and safety for private and public charging
- The role of local councils (including on street provision)
- Requirements for residential and commercial buildings, particularly new ones, to be equipped for charging
- Charging for trucks, buses, and other commercial vehicles
This strategy must also be established with an appropriate implementation mechanism that ensures government and industry can partner on the delivery of the strategy. There are a range of options for this mechanism (such as a dedicated office of zero emissions vehicles), which should be jointly considered between the government and relevant industry.
Public charging
Currently the number one priority for members is the roll-out of public charging infrastructure.
There are a number of private companies investing in public charging infrastructure here in New Zealand, but deployment is being hampered by a number of cost and process issues, particularly related to network connections. There are short term and long term options that need to be considered to create the conditions whereby private investment in charging infrastructure can occur to create a successful market. Drive Electric is working to identify potential solutions.
There continues to be a case for co-investment by government in public EV charging infrastructure to:
- Accelerate the roll-out of infrastructure to frontload emissions reductions (in breadth and depth)
- Ensure equity of access and overcome market failure (e.g. in remote areas)
As such, the membership is supportive of EECA’s Low Emissions Transport Fund, but this should be adjusted so that it is more flexible and mandated to support the rapid roll-out of public charging infrastructure.
Private charging
Private charging is also critical, as estimates suggest that 80% of charging could be done at home. We support an appropriately designed mandate for connected smart chargers in residential homes, alongside some form of well designed incentive. This is critical to ensure demand for electricity can be efficiently managed and that there isn’t overinvestment in electricity generation and infrastructure. Additionally, there is an opportunity to mandate the installation of private charging infrastructure in new residential and commercial buildings, of a certain size, by amending the Building Code.
Recommendations:
2.1 Develop and implement a National Public and Private EV Charging Strategy that creates the conditions for rapidly scaling charging infrastructure (private and public), and roles of government and private sector are made clear.
2.2 Establish an implementation mechanism that enables business and government to partner on the delivery of the strategy.
2.3 Ensure the Low Emissions Vehicle Fund is aligned to the objectives of the National Public and Private EV Charging Strategy in terms of scale and the projects it can support.
2.4 Mandate the use of connected smart charging in residential homes and encourage the uptake of this technology.
2.5 Scope the installation of charging infrastructure in new residential and commercial buildings.
3. ENCOURAGE RAPID EV UPTAKE FOR CONSUMERS AND FLEETS
Purchase price parity on electric vehicles will come, and this will likely occur well before 2030. However, there is a strong rationale to incentivise the uptake of EVs in the short-medium term to:
- Frontload emissions reductions from transport (recognising vehicles are on the roads for 15-20 years)
- Create a domestic secondhand market of EVs (particularly as there are not large stocks of RHD secondhand EVs globally.)
The Drive Electric membership supports the Clean Car Discount3, because it is a policy that has demonstrated to significantly lift EV uptake. It is also reducing emissions. Since June 2021, the average emissions of newly registered vehicles in New Zealand have dropped 21%. Over their lifetimes, vehicles already bought in under this Clean Car Discount will save 2 million tons of emissions.
We acknowledge that the Clean Car Programme should be reviewed regularly to ensure it remains fit-for-purpose. We note the scheme plays an important role in equity over the medium term, by contributing to a secondhand EV market in New Zealand. In particular, the current settings around the Clean Car Discount do not support the uptake of light commercial vehicles.
More could also be done to communicate the benefits of EVs to consumers, including that Total Cost of Ownership for most electric vehicles and uses has reached parity.
In addition, other tools could be used to specifically encourage fleets to quickly migrate to EVs, either through accelerating depreciation or removing FBT. Fleet companies purchase at least 24 per cent5 of vehicles in New Zealand, and these vehicles spend between 1 and 5 years in fleets. This is the quickest way to get more New Zealand-new, secondhand EVs onto the market. Growing a secondhand market is an essential way to achieve more equitable access to e-mobility.
Recommendations:
3.1 Maintain the Clean Car Discount and Clean Car Standard.
3.2 Explore options to use FBT or Depreciation levers to accelerate the uptake of EVs in commercial fleets.
4. SET ELECTRIC TRANSPORT TARGETS AND ACTIONS BEYOND ELECTRIC CARS
The current Emissions Reduction Plan has a target to reach 30% EVs (light fleet) on our roads by 2035. The membership supports this target, and many members suggest that it could be more ambitious still.
We also remain supportive of setting an end date by which no more new ICE vehicles can be imported into New Zealand, which should take into consideration similar moves by other RHD markets and automakers.
Additionally, there should be specific targets set around other forms of e-mobility (e-bikes, mopeds etc) and encouraging shared mobility (mobility as a service), with appropriate plans to support uptake.
There is also a real opportunity to drive the uptake of e-bikes and e-scooters/mopeds through incentives or tax adjustments, including having this as part of the Clean Car Discount. These forms of transport are cheaper for consumers and provide co-benefits (e.g. reducing congestion, health). The proposed adjustments to FBT are a useful tool, but would only apply to those with employers willing to participate in such a scheme.
We also suggest there are opportunities to address how to extend the range of shared forms of e-mobility as services (cars, bikes, scooters), which will reduce the number of vehicles on the roads. These programmes can also be geared to improve equity.
Recommendations:
4.1 Set targets and plans for the uptake of all forms of e-mobility, including commercial
4.2 Consider how incentives can be used to promote e-bikes, e-scooters and other non-car forms of e-mobility.
4.3 Explore how government settings can encourage mobility as a service particularly as a tool for supporting equitable access to e-mobility and transport.
