Nudging car fleet changes

Although electric cars have merged from the novelty lane on to the main highway, their numbers in New Zealand are still small - about 15,000 compared to the nearly four million other light vehicles.

National in power set a goal of 64,000 new electric vehicles registered by 2021. The key incentive was an exemption to road user charges. This expires that same year, and eventually electric cars will have to at some stage contribute to the cost of roads.

Labour, the Greens and New Zealand First this week have promoted a new scheme whereby ''gas guzzlers'' imports would subsidise more fuel-efficient imports, including most newer small cars, electric cars and hybrids.

Fees would go on higher-emission vehicles from 2021 and that money used to subsidise those producing less carbon dioxide.

As with any change, there will be winners and losers and potential anomalies. That is the cost of almost every decision, regulation or tax.

But - despite several legitimate concerns - this is smart policy, encouraging light vehicle purchasers to alter their buying practices.

It is a variation of the ''nudge'' theory, recognised in marketing circles and human psychology. Rather than use education, enforcement and over-the-top rules, it adjusts the costs of new and imported used vehicles.

While how much impact that will have can only be estimated, the plan would lower one of the high hurdles to electric and hybrid ownership, the relatively steep purchase price.

The ubiquitous Nissan Leaf, for example, might be much cheaper to run than its small petrol equivalents, but at present more choice, more features and newer equivalent cars can be bought for less.

The proposed scheme (submissions are invited until August 20) will see the likes of the Suzuki Swift, Nissan Tilda and Toyota Corolla also fall in price, but the drop will not be as large as for electric cars.

Concern has come from farmers and tradies. They have little choice but to buy bigger utilities or vans, much more likely to have heavier emissions. Even if such users can avoid GST and count the vehicle as a business expense, additional costs, on the present proposals for most popular makes will be from about $2000 to $3000. The Nissan Navara, though, with low emissions, would not attract the tax.

Overall, the policy is designed to be cost neutral.

National has argued the poor will suffer. However, a social impact report compiled in conjunction with the proposals indicates the impact on low-income households would be of a ''similar fashion'' to richer households. Nonetheless, it is easy to see large poor families paying more. The changes in costs for vehicles first registered in New Zealand will flow through to older cars.

The impact on hybrids is one of the unknowns. They might grow rapidly in popularity, and some of these purchases might be at the expense of a switch to electric cars.

The policy also sensibly proposes a limit on car discounts to prices below $80,000. Anyone choosing to buy a car above that level should not need financial aid.

The Government also wants to introduce a carbon dioxide emissions target by 2025 of 105g of CO2 per kilometre. It is not as strict as Canada or Europe and is at Japan's 2014 level.

New Zealand is only one of three developed nations, with Australia and Russia, lacking fuel efficiency standards. It can easily be a dumping ground for older less fuel efficient vehicles.

The Government's proposals are moderate and should have a significant incremental effect. This, combined with the revolution in car research and manufacture gathering pace around the world, could accelerate healthy changes in this country's car fleet. It is also sufficiently restrained to likely survive any change in government.

Comments

Russia is not even close to developed nation. According to the World Bank its a nation "In Transition" or "developing". Please be precise with facts.

 

drivesouth1.png

drivesouth2.png