Kerre Woodham: Are electric vehicles on the rise again?

Summary

On 4 November 2026, Kerre Woodham published a commentary noting that New Zealand's electric vehicle market is heating up again after a trough following the removal of subsidies. In July 2021, the first month of the Labour government's EV subsidy scheme, new registrations of pure electric and hybrid light vehicles jumped from 521 in June to 1,944, nearly quadrupling; some brand models saw sales increases of over 200 percent. At the peak of the subsidy scheme, the pure electric vehicle market share rose from less than 4 percent in January 2022 to just over 20 percent in December 2022.

However, after the National-led coalition government removed the Clean Car Discount at the end of December 2023, new EV sales plummeted from a 20 percent market share to less than 10 percent. Recently, driven by high petrol prices, EV registrations surged 174.1 percent year-on-year last month. Advocacy group Rewiring New Zealand is calling on Prime Minister Luxon or Labour leader Hipkins to introduce an EV salary sacrifice scheme similar to those in the UK and Australia, allowing employees to lease new or used vehicles from pre-tax pay, with lease, insurance and maintenance costs deducted from pre-tax income, thereby reducing taxable income.

Rewiring Aotearoa says workers could save an average of NZ$36 per week compared with a standard car loan, and that after a three-to-five-year lease term the vehicles would enter the used car market, increasing second-hand supply. Supporters estimate the policy would cost the government about NZ$5,000 per vehicle in income tax relief. The article also noted that when asked how to ease cost-of-living pressures, Hipkins only proposed limiting public transport fares.

Commentary

New Zealand's electric vehicle market is warming up again after the subsidy retreat, with registrations surging 174.1 percent year-on-year last month, driven primarily by high petrol prices. Rewiring New Zealand proposes a salary sacrifice lease scheme modelled on the UK and Australia, allowing employees to pay for EV leases and related costs from pre-tax income, saving an estimated NZ$36 per week, though it would cost the government about NZ$5,000 per vehicle in tax relief. For small and medium business owners, if implemented, the policy would directly lower employee vehicle costs, particularly benefiting sales and service roles that require frequent travel, but self-employed individuals and micro-businesses without formal payroll systems could be excluded and would need to rely on existing tax deduction rules.

From an industry perspective, New Zealand's EV market previously relied heavily on subsidies, with pure electric share reaching 20 percent in December 2022 before plummeting to below 10 percent after the subsidy was removed, showing high price sensitivity. The current organic growth driven by high petrol prices is more sustainable, but inadequate charging infrastructure and fluctuating used-car residuals remain major obstacles to fleet electrification for SMEs. Notably, similar policies in Australia have spurred corporate fleet renewal; if New Zealand follows suit, it could stimulate electrification of light commercial vehicles, but electric options for utes and tool-of-trade vehicles remain limited, and SMEs need to assess whole-of-life costs rather than focusing solely on purchase subsidies.

Keywords: electric vehicles, New Zealand, subsidy policy, market share, registrations, salary benefits, Clean Car Discount, cost of living, Rewiring New Zealand, Kerre Woodham

Photo by TheDigitalArtist on Pixabay

Source: Newstalk ZB