The June-to-July lurch is the biggest one-month swing that the MIA has recorded with its current reporting system, which stretches back to 1975. It was also the slowest month since the April 2020 lockdown.
‘Fighting over plates’
There was a buying bulge in June as punters raced to beat changes to the Clean Car Discount (CCD) scheme on July 1, when the maximum rebate for a low-emission vehicle fell from $8625 to $7015 and the maximum fee for a “dirty” car or ute rose from $5175 to $6900.
But Wiley said the broader issue was that the industry only got two months’ notice of the smaller carrot and bigger stick.
The Government had long-flagged that the scheme would change from July 1, but the details were only confirmed by then Transport Minister Michael Wood on May 2.
Wiley said this caused planning and logistical challenges in the run-up to June 30, and beyond.
“Dealers were fighting over plates,” the MIA head told the Herald.
Waka Kotahi was caught short and had to order more. Today, the agency still has a warning on its site that a high volume of rebate requests means rebates could take up to 20 days to process.
Short-notice policy shifts vs long lead times
“With policy changes at relatively short notice, the uncertainty factor is making the job more complex and difficult for NZ distributors and franchise dealers to accurately predict demand that far in advance,” Wiley said.
“Distributors - depending on the brand or manufacturer - are committing to volumes of product anywhere from a minimum of six months to a year or more in advance.”
That’s the time it takes to place and secure orders, get production volumes allocated and into the manufacturing queue at the source production country, go through the source country domestic export process, then through the entire shipping supply chain and importation processes into NZ, Wiley said.
Second-hand dealers - who had much less of a sales hangover in July - typically took around six weeks to get vehicles into the country, the MIA head said. “They have a lot more flexibility to pivot and adapt than the new-car industry.”
More change ahead? Maybe
“What is concerning is the extent of market disruption generated from Clean Car Discount policy changes. This will likely be causing unnecessary complexity and uncertainty for distributors, the dealership network and the entire supply chain associated with automotive throughout the country,” Wiley said.
And she says the upcoming October election means more planning uncertainty for dealers as they restock.
”Do they go EV, or do they go ICE [internal combustion engine]?”
National has said that while it supports low emissions, it considers the CCD the wrong mechanism.
National’s transport spokesman Simeon Brown said on July 5 - as he confirmed his party supports the phasing out of EVs’ Road User Charges (RUCs) exemption - that further EV policy would be released closer to the election.
RUC ruckus
Labour and National agree that EVs should lose their RUC exemption, which is due to expire on March 30 next year. After that date, the average EV driver will have to pay just under $1000 per year, according to AA calculations - the RUC rate for EVs will be $76 per 1000km - as the Crown tries to fill a roughly $2 billion hole in its books that will be created by the transition to EVs and the attendant loss of petrol tax.
That introduces uncertainty over the the degree to which paying RUCs will dampen buyers’ enthusiasm for electric vehicles, and whether the March 30 expiry date will in fact be pushed out by three months or six months or more.
EVs have previously had several stays of execution from paying RUCs, with the date of their exemption pushed out to encourage adoption.
This time, a delay is possible because of the considerable logistical challenges of tracking the mileage of about 75,000 EVson NZ roads, and the thorny issue of gauging RUC mileage for plug-in hybrids that are sometimes running on petrol and sometimes purely on battery power alone. The AA says there’s a risk PHEV owners could be charged twice - or nothing.
“Work is under way on improving the general functioning of the road user charge system for end users, including measures needed to smoothly transition owners of light EVs into the RUC system when the exemption for light EVs expires. This work will include measures to address any double billing of fuel excise duty and road user charges for plug-in hybrid EVs,” a spokesman for current - but soon-to-retire - Transport Minister David Parker said.
“As part of this work, Cabinet will also consider extending the current light EV exemption date.”
For dealers who have to order up to six months in advance, it means more stress and uncertainty.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
