It’s no April Fools’ joke … from Next Monday, 1 April, light electric vehicle (EV) and plug-in hybrid electric vehicle (PHEV) owners will need to join other motor vehicle owners and start paying for their use of the roads by purchasing RUC.

With the Coalition Government having scrapped the clean car discount (CCD) at the end of 2023, purchases of these vehicles this year have slumped to a fraction of their former glory under the discount scheme. With the introduction of RUCs, the EV and PHEV dream may be truly over for many.

None of this means anything to truck owners and operators – unless you run EVs or PHEVs in your light vehicle fleet. Not many run heavy electric vehicles, and those who do are exempt from RUC until 31 December 2025. But it still bears some discussion.

What all this has proved, to my mind, is that for most buyers the purchase of EVs and PHEVs has never been altruistic. While the previous government’s intention for promoting their uptake might have been about reducing tailpipe emissions and New Zealand’s contribution to greenhouse gas emissions, for buyers, that was secondary – a feel-good by-product. For them, the main reason for purchase was dollars and cents. The vehicles may be more expensive to buy – though that’s changed substantially over the past couple of years – but their running costs are a fraction of an equivalent vehicle fitted with an internal combustion engine. And that’s a fair enough reason.

As commented in previous editorials, I think removing the CCD could’ve been handled differently, reimagined instead of condemned. Nonetheless, it’s gone. This week, the Income Tax (Clean Transport FBT Exclusions) Amendment Bill by Green Party MP Julie Anne Genter was drawn to be considered by Parliament. The bill would create an incentive by exempting electric vehicles from fringe benefit tax for five years. Regardless of whether this is the correct route, it’s the only alternative yet mooted, and that’s better than nothing. It’ll be interesting to see how that develops.

So, what about the RUC situation? It’s always been known that the RUC exemption was temporary and would fall away – consumers couldn’t claim ignorance and anyone now ditching their EV because of it only reinforces my earlier point.

Cabinet should be congratulated for listening to concerns about RUCs for PHEVs and reducing it by a further 20%, to half of the full RUC rate. We’re told by Minister of Transport Simeon Brown, though, that this is a “temporary measure to lessen distortions while we get to work on transitioning the entire vehicle fleet to the road user charges system and away from fuel excise”. And that’ll be an adjustment for even more vehicle owners … though I do think it’s a fairer overall system for road users. But I’d be interested to see how it stacks up in revenue generation compared with a fuel tax.

At the end of the day, though, it must make ‘cents’ to buyers and revenue collectors alike. Yes, everyone has to pay their way. But if EVs are ever to be anything more than a convenient way to save on personal transport (that is to say, widespread uptake to the benefit of the air we breathe), there has to be a bit of give … an incentive or two that would allow buyers to boast about how much their vehicle doesn’t cost, and how they’re making the world greener, too.

Take care out there,

Gavin Myers
Editor