Changes To Clean Car Discount From 1 July 2023

The Motor Industry Association (MIA) welcomes some of Minister Wood’s announced changes to the Clean Car Discount (CCD) this morning, however we have significant concerns on several of the changes that will adversely impact the new vehicle sector.

The new vehicle sector welcomes the CCD eligibility criteria remaining the same, namely the $80,000 cap, which addresses inflationary pressures for new vehicle prices. The MIA is disappointed that our request for the creation of a specific light commercial vehicle cap at $85,000 seemed a step too far. The consequence is that light commercial vehicles are now unfortunately disproportionately impacted by 1 July CCD fee changes.

Our most significant concern is the timing for the CCD change. Such a short notice period for industry to prepare for 1 July CCD changes, will cause difficulties for the new vehicle sector for two key reasons. The first relates to makes and models that have long wait lists and where customers have paid deposits in advance for those vehicles and have an expectation about the overall purchase price for those vehicles. The second relates to forward supply orders that have already been committed to by new vehicle importers and distributors. A longer notice period for these changes would have enabled industry to have adjusted some of those orders in the light of upcoming changes to CCD rebates and fees.

The MIA anticipated a reduction in rebates, an increase in fees and adjustment to the bands for eligibility for rebates. Unfortunately reducing the point at which a rebate begins (reducing from 146 grams to 100 grams CO2 per km) now excludes almost all hybrid vehicles from qualifying for a CCD rebate from 1 July 2023. This means that the only vehicles to qualify for a CCD rebate post 1 July are likely to be Battery Electric Vehicles and Plug-in Hybrid Vehicles.

The MIA is concerned about the potential impact to sales of non plug-in hybrid vehicles. If sales for these vehicles drop because they no longer attract a CCD rebate, this could negatively impact the downward trend of CO2 emission improvements from vehicles entering the New Zealand fleet.

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