New Zealand’s Electric Vehicle Market Stalls as Government Policies Shift
The electric vehicle (EV) market in New Zealand is experiencing a significant slowdown, reversing a period of rapid growth. A confluence of policy changes implemented by the current government is being widely blamed for the decline, raising questions about the country’s commitment to decarbonizing its transport sector.
For several years, New Zealand appeared poised to embrace EVs, attracting a growing number of drivers seeking a cleaner and more cost-effective transportation option. However, that momentum has stalled. Sales figures reveal a dramatic shift. In , the final year of the clean car discount, just over 26,000 battery electric vehicles (B-EVs) were sold, representing a 10 percent market share. This figure has plummeted in , with just over 9,000 B-EVs sold, equating to a market share of just over 4 percent – a slight increase from , but a substantial drop from the previous year.
The downturn is directly linked to a series of policy reversals by the government. The clean car discount, a rebate program designed to lower the upfront cost of EVs, was scrapped. Simultaneously, EVs were brought into the road-user charge (RUC) system, effectively ending a long-standing exemption that incentivized EV adoption. The government argued that this was a matter of fairness, ensuring all vehicle users contribute to road maintenance costs. More recently, the government weakened the Clean Vehicle Standard, reducing the pressure on importers to prioritize low-emission vehicles.
Ed Harvey, founder and CEO of Evnex, an EV smart charging company in Christchurch and a long-time EV user, argues that the government’s actions are not driven by genuine concerns about market demand, but rather by a deliberate “politicisation of EVs.” He believes the government is leveraging the issue for political gain, despite the potential economic benefits of a thriving EV sector. “They would say they didn’t think it was working – they would probably say, look, the market share is way down, that’s proving Kiwis don’t really want electric vehicles, but I think the government has… really leveraged the politicisation of EVs to their advantage,” Harvey stated.
Harvey, who converted a Honda Accord to electric power in while at university, highlights the damage these policy shifts are inflicting on the nascent EV industry in New Zealand. He points to the struggles of businesses specializing in EV infrastructure, battery recycling, and servicing, which experienced significant growth in and but are now facing an uncertain future. “It’s done huge damage to the industry… There were a lot of fledgling businesses… that were starting to grow quite well back in 2022/23. It’s done a huge amount of damage to those businesses, and they have lost a lot of confidence.”
The impact of the policy changes is also visible at the Port of Auckland, a major entry point for vehicles into the country. Chris Mills, general manager, marine, multi-cargo and cruise at the port, reported a significant decrease in the number of EVs arriving in . EV arrivals fell to 600 units, a roughly 30 percent decrease compared to the 800 EVs received in . A similar decline was observed in plug-in hybrid vehicles, while registrations of petrol-hybrid vehicles surged, reaching 2700 units in .
While the government maintains that the slowdown in EV sales aligns with global trends and reflects broader economic pressures on households, Harvey argues that the policy decisions have undermined a crucial opportunity to reduce emissions from the transport sector, a significant contributor to New Zealand’s overall carbon footprint. He emphasizes that EVs represent a viable solution for lowering emissions and saving consumers money in the long run.
The situation underscores the sensitivity of the EV market to government intervention. The rapid reversal of supportive policies has not only dampened consumer enthusiasm but also created uncertainty for businesses invested in the EV ecosystem. The long-term consequences of these decisions remain to be seen, but the current trajectory suggests a significant setback for New Zealand’s ambitions to transition to a cleaner transportation future.
