With hybrid and electric vehicles coming of age, our government has decided the time has come for owners of these vehicles to start paying Road User Charges (RUCs). While this information has come as a mighty surprise for owners and industry players alike, many can appreciate the necessity of contributing towards the development and maintenance cost of Aotearoa’s road network.
These EV road user charges will take effect on April 1, 2024. But before they do, we’ll give you the rundown on everything you need to know, from what the RUC changes mean for you to why these changes are happening and what industry reacts to them. We’ll cover it all and then some.
The End of the Exemption Era
When electric and hybrid cars first appeared on New Zealand’s roads, their presence was a novelty. To spur their adoption, the government exempted them from road user charges (RUC), a move aimed at fostering a greener shift in transportation. This policy, initiated in 2009, was designed as a temporary measure until EVs and PHEVs formed a significant part of the country’s vehicular landscape.
Over the years, the perception of electrically powered vehicles has evolved dramatically. Once a futuristic concept, EVs and PHEVs have become a practical and increasingly popular choice for Kiwis. This shift is partially attributed to the direct experience and word-of-mouth endorsements within the close-knit fabric of New Zealand society. The ‘two degrees of separation’ for which New Zealand is known has played a pivotal role in familiarising the public with these vehicles.
Today, the landscape has significantly changed, with approximately 100,000 light EVs and PHEVs on the roads, about 2% of the nation’s vehicle fleet. These vehicles, now commonplace, contribute to road wear and tear just like their petrol and diesel counterparts. Recognising this, the government has decided to phase out the RUC exemption. This move reflects that EVs and PHEVs are no longer niche but integral parts of New Zealand’s vehicle fleet and the need for equitable contribution to the upkeep of the country’s roading infrastructure.
New Road User Charge Requirements
Starting in April 2024, owners of light EVs, including various hybrid models, will need to purchase and display a RUC license. The requirement to display the RUC label will be enforced from April, but vehicle owners have until the end of May 2024 to acquire their first license.
Types of Vehicles Affected:
- Battery Electric Vehicles (BEVs): Fully electric vehicles will incur the standard light vehicle RUC rate of $76.00 per 1000km.
- Plug-in Petrol Hybrid Vehicles: A mix of petrol and electric vehicles will have a reduced RUC rate of $38.00 per 1000km due to the fuel excise duty already paid for petrol.
- Plug-in Diesel Hybrid Vehicles: Similar to petrol hybrids, they use diesel and face the standard RUC rate.
- Standard Hybrid Vehicles: These will not require a separate RUC as they cannot plug in to charge. They already pay fuel excise duty.
- Very Light Electric Vehicles: Including electric motorcycles and mopeds, they will remain exempt from RUC.
Types of Vehicles Affecte
Process of Obtaining an RUC License
To buy an RUC licence, owners will need their vehicle’s plate number, the current odometer reading, and a payment method. The process is streamlined online, but licences can also be acquired in person at RUC agents. For more information on RUC for electric vehicles, visit Waka Kotahi.
Industry Response to New EV RUC Regulations
The introduction of RUC for EVs and plug-in hybrids has sparked considerable debate within New Zealand’s automotive sector. The MIA, representing a coalition of industry groups and car brands, has been particularly vocal in expressing concerns about the government’s changes to road user charges for these vehicles.
Aimee Wiley, the MIA’s chief executive, has criticized the new RUC rates in a recent Stuff interview, arguing that they are “not fair or equitable” and could deter potential EV buyers. Wiley’s concerns extend to the broader impact on New Zealand’s push towards greener transport options, emphasizing that the new rates could “significantly impact the uptake in demand for EVs,” potentially leading to a scenario where electric vehicle options diminish in the market.
MIA’s Proposed Adjustments
The MIA has proposed reducing the RUC for EVs from $76 to $60 per 1000km to address these concerns. These figures are based on the average performance of the country’s new vehicle fleet over the last two years. Wiley asserts, “We believe every motorist has a responsibility to contribute their fair share toward New Zealand roading costs. EVs are no exception to this.”
Broader Industry Concerns
The MIA’s stance reflects a shared sentiment among various industry groups, including the Motor Trade Association, Drive Electric, the Imported Motor Vehicle Industry Association, and the New Zealand Automobile Association. Wiley adds, “Linking the rate of the road user charges to the current light vehicle diesel RUC rate will have the unintended consequence, we believe, that EVs will be contributing more to the national land transport fund than the equivalent petrol cars.” .
Consumer Perception and Market Dynamics
The recent changes come on the heels of the Clean Car Discount scheme’s termination, which already saw a decrease in electric and plug-in hybrid vehicle sales in the early part of the year. Wiley cautions that these changes might shift consumer perception to viewing EVs as penalised options, which she labels a “penalty on a plug.”
Future Implications of Changes to RUCs for EVs and Hybrids
These changes to EV and hybrid road user charges represent a pivotal moment in New Zealand’s transition to a more sustainable transport sector. While the aim is to maintain equitable road use charges, there is a delicate balance to strike to ensure the continued growth in the adoption of environmentally friendly vehicles. The industry and consumers alike will closely monitor these changes’ impact on the NZ EV car market.
Keep your eyes peeled at Portage Cars for everything you need to know about the ever-changing EV industry.
