Revisiting the Clean Car Discount: the dollars and the outcome
A few years ago we wrote about the math problems with the Clean Car Discount graphic. The scheme has since run its course and ended on 31 December 2023, and NZTA has published the final figures. This is a good moment to step back and summarise what the programme actually was and what it cost, now that the accounts are closed.
Two parts, not one
People often used "Clean Car" as a single label, but the Clean Car Programme has two parts that do different jobs.
The Clean Car Standard works on the supply side. It sets a CO2 target on the vehicles that importers bring into the country, and it is still in place. The Clean Car Discount worked on the demand side. It put rebates on low-emission vehicles and fees on high-emission ones, and it is the part that has now ended.
How the discount worked
The discount ran in two stages. From 1 July 2021 to 31 March 2022 it paid rebates on eligible electric and plug-in hybrid vehicles only. From 1 April 2022 to 31 December 2023 it became a full feebate tied to a vehicle's CO2 rating, so a low-emission vehicle earned a rebate and a high-emission vehicle was charged a fee.
At the top end a new electric vehicle could attract a rebate of $8,625 including GST. Plug-in hybrids sat lower, and used imports lower again. On the other side, a high-emission vehicle such as a large diesel ute could be charged a fee of several thousand dollars. Inland Revenue administered the payments, and applications closed for good at the end of 2023.
The dollars
Here is the part that is easy to lose track of. The figures below come from NZTA's final financial report for the scheme, covering 1 July 2021 to 30 June 2024 on an accrual basis.
| Item | Amount (NZD) |
|---|---|
| Rebates paid | $617.2 million |
| Administration costs | $11.9 million |
| Project costs | $5.4 million |
| Total expenditure | $634.5 million |
| Fee revenue used to pay rebates | $297.4 million |
| Crown grant allocated | $337.1 million |
| Crown grant balance still repayable | $64.3 million |
By volume, about 192,100 rebates were paid and about 128,300 vehicles were charged a fee.
The point worth sitting with is that the fees did not cover the rebates. Fees put in $297.4 million, while rebates paid out $617.2 million. The gap was covered by a Crown grant of $337.1 million, made up of an original $301.4 million plus an extra $100 million added in Budget 2023, and $64.3 million of that grant is still repayable. So the scheme was not self-funding in the way it was first pitched.
What it means now
Whatever your view on the policy, the discount put a large number of electric and plug-in hybrid vehicles onto New Zealand roads in a short window. Those vehicles are now part of the fleet, and like every vehicle they will eventually reach the end of the road.
That is where our side of the industry pays attention. An electric or plug-in hybrid that comes in for wrecking is not handled like an old petrol car. The high-voltage battery has to be isolated and dealt with carefully, and there is real value in recovering and recycling the right parts. The bulge of EVs and plug-in hybrids bought under the discount will feed into that stream over the coming years. On the other side of the ledger, the utes and larger vehicles that were hit with fees are still common on Canterbury roads and still come to us at the end of their working life. For more on how we think about this, see our earlier post on vehicle scrappage programs in New Zealand.
Sources: NZTA Clean Car Discount financial reports, Inland Revenue and the Ministry of Transport.
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