The move has prompted outrage on social media and rural circles, with claims it is a tax targeting farmers and trade businesses reliant upon a vehicle that is unlikely to have an EV alternative in the near future.
Shaw acknowledged the move may appear outwardly as an unpopular tax, coming the same week as rural New Zealand frequently embarks on a ute buying binge at the country’s National Fieldays.
Buyers of EVs will be able to claim a maximum rebate of $8625 from July this year, and hybrid vehicles will be included in the rebate scheme from next year.
However, high-emitting utility vehicles will face a carbon charge of about $3000 a vehicle, with prospects this will only increase further when the Government’s clean car standards are introduced in 2023.
The move has Federated Farmers president Andrew Hoggard suggesting there should be an exemption for selected sectors until meaningful alternatives are available.
Shaw acknowledged the shift to EVs is a tough policy problem the Government had wrestled with before arriving at the decision.
“The issue we have with utes is that the vast majority of them are not bought by tradies or farmers, they are bought by urban users and lifestylers. If we tried to exclude utes, we would only lead to an increase in their sales, which is counter to what we are trying to achieve. It is transport in our cities that we are trying to deal with,” he said.
He maintained trade and farm utes will still remain eligible for fringe benefit tax exemption.
“People may say the unintended consequence of this is that people will hold onto their older ute for longer. But that is better than introducing another new high-emitting vehicle into the national fleet,” he said.
Shaw says the Government did consider exemptions for trade or farm applications.
“But that just was not practical,” he said.
“But what we have done is send a strong signal to manufacturers about what the policy is now. A problem in the past is NZ has been seen as a bit wishy-washy on its EV policy, now that has been made clear.”
NZ’s two top selling vehicles also happen to be utes, with the Ford Ranger claiming 7975 sales last year, followed by the Toyota Hilux at 5976. The Toyota RAV placed third at 5341.
Shaw and the Government have been criticised for stinging utes with a carbon charge before there are viable alternatives available for commercial use.
The Prime Minister claimed electric models would be available in 12-24 months, prompting Toyota NZ to caution there was no likelihood of an electric HiLux in that time, and that there were major global constraints around battery supply.
Expectations are there will be plug-in electric hybrid utes available by 2025, with full EVs coming some time after that.
Chinese manufacturer LDV has announced it will be the first to release an electric one-tonne ute, but no date has been given on that.
Social media has revealed images of a Rivian one-tonne ute and a SUV being unloaded at Auckland Airport this week.
