OK so the NZ Government recently floated a couple of new policies related to electric vehicles. There are two seperate prongs to the policy strategy:
The Clean Car Standard
And the Clean Car Discount
So let's dig into the Clean Car Discount first, because this has got all the media. Dubbed a feebate scheme - this is basically about incentivising Kiwis to buy clean vehicles and dis-incentivising us to buy polluting vehicles. Sadly for Range Rover, their vehicle was picked on by many parts of the media as the pinnacle of the polluters, which was ironic given Jaguar Land Rover is owned by Tata, and they recently released the Jag iPace, a stunning new all-electric SUV and the first in its class to do so. But hey, here in NZ we love cutting the heads off poppies and many of them drive a Rangy.
Now before we dive deep into the feebate scheme, I have to tell you about the weirdest conversation I had at EV World, which I also quite enjoyed. I was chatting with Andrew Casely, a genuine top quality bloke and the CEO of EECA when someone from the Hyundai stand came over for a chat as well. First up we both started giving him cribbing about the car that was front and foremost on their stand - the Nexo, Hyundais new hydrogen SUV. It looked great, but still requires a distribution model, something that is lacking globally (and why I think hydrogen loses - we all have the ability to refuel at home with an EV, but I don’t think I’ll ever have a hydrogen stil in the backyard making hydrogen moonshine).
After that friendly ribbing we got onto the discussion regarding the feebate, and our motoring colleague raised some interesting points about the motoring industry as a whole. You see one of the challenges with domestic car brands trying to get their global parents to bring new EVs to our countries being NZ and Australia, is there isn’t a clear direction or Government regulation on EVs like there is in other countries. Like Norway. Like France. Like the UK. Like China. Hey even like the US and India. And without this, manufacturers (quite rightly) are saying that they have more opportunities to sell more EVs in other countries. So he was basically saying that the lack of Government regulation, being either feebate schemes like the Clean Car Discount, or an emission standard like the Clean Car Standard, was actually going to limit NZ car resellers ability to bring low emission cars to NZ. So, because Kiwis keep buying vehicles, by default (my words not his) we would continue to get lots of diesel and petrol vehicles being sold disproportionately to the rest of the world, polluting our atmosphere, while the rest of the world gets access to lots of shiny new low-emission vehicles. Now I don’t have a PHD, but that just sounded stupid.
What was mildly amusing however was that in his next breath he informed us of the tens of millions of dollars it was going to cost his company to comply with the new proposed Clean Car Standard. So on one side of the ledger, if we don’t impose a feebate or an emission standard, we will continue to get lots of petrol and diesel vehicles. In fact way more than other countries because we have no standards. I’ve met a few people with no standards, and they generally aren’t that pleasant or happy. We don’t want to be them.
If we do apply both standards and a feebate ironically the car companies will have to provide us with more low emission vehicles and lots of choice. Or they will go out of business. My heart bleeds. Here’s the simple math: if you want to sell gas guzzling V8s or diesel utes, then you have to balance that with low/zero emission vehicles or you can’t sell cars. It's as simple as that.
So that’s a summary of why an emission standard and a feebate make sense in the world today. The emission standard ensures we are on a level playing field with the rest of the world, and a feebate balances the cost out for consumers. Both combined ensure we get lots of choice, something we use to define freedom in western society.
So what about the details of the two strategies. Heres basically how it works for the Clean Car Discount:
There are two tiers, new and used.
From 2021 if you buy a new low emission vehicle (less than 150grams C02/km) which starts at Ford Focus/Holden Cruse size, it will have a discount applied that varies from $600 and goes all the way to $8,000 for something pure electric.
In the same year, if you buy a high emission vehicle the additional cost will range from $2,000 for a Kia Sportage to $2,750 for a brand new Ford Ranger. Over the following 8 years the rebates goes down (along with the qualifying C02e level), so the cars get cleaner and and the number of vehicles captured by the fees goes up. If they are sold at all.
The overall goal is to reduce C02 emissions by pushing the price of vehicles that are bad for us up, and by giving us a discount on those that are better for us. Whoah, did I just say that petrol or diesel vehicles are bad for us? No way! If you don’t agree with that little statement I’d be happy to play a little game with you. We’ll both jump in our cars inside our garages and let them run for an hour with the windows down. We’ll see who’s the sickest at the end. Just jokes. But that’s exactly how we should view our vehicles. If it would poison you to play that very stupid little game (no, do not try that at home boys and girls), then guess what, that vehicle is bad for you. And it's bad for everything that breathes oxygen. As humans we breath in around 11,000 litres of air a day. 11,000 litres. So what harm do you think more than 1 billion of these polluting machines in the world today can do to us? Well apart from transportation, none of it is good.
To some people the issue of pollution from vehicles may be new news. After all, with our trade winds and our cities feeling pretty good surely people aren’t dying from air pollution in Aotearoa or Australia? Well wrong. A health report completed in 2012 (and referenced on the Ministry of Transports website) found that in that year 256 people died prematurely costing the economy close to $1bn. 267 people died in that year on our roads and we know more about that than the people that died from vehicle emissions. When the health report was produced in 2012 we had 4.25m vehicles in NZ. Now in 2019 we have 5.3m. And only 15,000 of those are electric. The World Health Organisation estimates the cost to the economy from premature death caused by fossil fuel pollution to be about 1% of GDP. Yep its bad. So bad in fact the Government doesn’t have a choice but to get involved.
Wether self confessed petrol heads like it or not the world is making a transition to cleaner, quieter, and safer vehicles. This shift is just like when it no longer became cool to drink and drive, and when we worked out that cigarettes are actually bad for you. Emissions from fossil fuelled vehicles are bad for us, and while the older generation won’t make the shift as easily, if you drive your diesel ute through town in 10 years you’re going to get looked at like you yourself probably look at a smoker standing on the pavement sharing their poisonous gas with you.
Now let's get to the fun part. I won’t bore you with the direction I vote in, but I’ll just say that I’m not a raging greenie, even though I like the direction this is pushing us in. In NZ, unlike a big trend globally, and even though they won’t admit it, our two major parties are pretty centrist i.e. not too far right or left, or for you Americans potentially reading this, not extreme republicans or democrats. So as a result our politics is pretty boring, relatively sensible, and we don’t get too outraged (unless we’re underpaid teachers or nurses - yes I do believe you should be paid well in a meritocratic way). But following hot on the heels of some Australian politicians trying to drum up votes by assuming their constituents are mentally challenged, a couple of our politicians suggested that EVs and low emission vehicles will steal tradies jobs. Why? Because a tradie (thats Kiwi and Aussie slang for builders, plumbers, electricians etc), can’t get their gear in a Nissan Leaf. So let's pick apart that little alarmist comment, because ironically there are some elements of truth in it today.
Will EVs steal tradies jobs? Well yes but not in the way you might think. If you’re a diesel mechanic, your future is a little cloudy over the next decade. The same if you are a petrol mechanic. Because EVs don’t need the same maintenance levels. But if you are an electrician well that statement is just plain wrong - you are going to be busy as hell putting in EV charging infrastructure. On the subject of vehicle choice, the statement today is correct, there are virtually no choices in EVs that can tow (apart from astronomically expensive ones), and there are no electric utes. Yet. But they are coming and coming fast. But guess what? They won’t come here if we don’t have a Clean Car Standard and a Clean Car Discount because the manufacturers will point them at countries that do.
So overall the feebate and the emission standard are a smart thing if you want to get cleaner, modern technology on our roads. If you would prefer that we keep poisoning ourselves and our children, because I’m not going to sugar coat it, we are, then stick with the status quo. But let me know your rationale. There isn’t one reason you could give me that makes up for people dying horrible deaths because of this outdated technology. We have evolved when it comes to transport, lets not go back.
So who else has worked this out? Turns out quite a few countries actually
As a result they are getting new low emission vehicles driven into their market. OK so a lot of car manufacturers are whining about it, but they are also complying. Because if they don’t they can’t sell cars.